Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1743 - AT - Income TaxAddition u/s 145A - adjustment of closing stock of the assessee by duty and taxes etc. in the form of CENVAT - Held that:- While it is the case of the AO that the element of excise duty / CENVAT etc. would represent part of the closing stock of the assessee in terms of Section 145A, it is the case of the assessee, on the other hand, that Section 145A has no application to the facts of the case. It is further case of the assessee that it follows exclusive method of accounting for valuation of inventory and therefore, entire exercise would be tax neutral. We notice that Section 145A falls under the Chapter XIV – procedure for assessment. It essentially deals with method of accounting and is in the nature of machinery provision. Section 145A inter alia provides that inventory of goods shall be valued in accordance with method of accounting regularly employed by the assessee. CIT(A) has examined the issue on facts and binding judicial precedents and concluded the issue in favour of the assessee. In the absence of any impact on the profitability of the assessee per se due to exclusive method of accounting followed, we do not see any error in the conclusion drawn by the CIT(A). Disallowance of interest under s.14A - Held that:- We find merit in the plea of the assessee that Rule 8D(2)(ii) shall have no application in the given facts where the interest income earned outweigh the interest expenditure. In consonance with the decision of the Hon’ble Gujarat High Court in PRINCIPAL COMMISSIONER OF INCOME TAX-3 VERSUS NIRMA CREDIT AND CAPITAL PVT. LTD [2017 (9) TMI 485 - GUJARAT HIGH COURT], we decline to interfere with the conclusion drawn by the CIT(A) on the issue in favour of the assessee. MAT - adjustments in the book profit computed under s.115JB of the Act following the disallowance under s.14A - Held that:- We direct the AO to delete the adjustments made on account of estimated disallowance determined under s.14A of the Act while computing ‘book profit’ under u/s.115JB of the Act.
|