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2018 (10) TMI 931 - AT - Income TaxDisallowance u/s 14A - Held that:- Disallowance under section 14A cannot be made where the dominant object of the investment is controlling interest. However the Hon‟ble Supreme Court in case of Maxxopp investments Ltd Vs. Commissioner of income tax (2018 (3) TMI 805 - SUPREME COURT OF INDIA) has held that the dominant purpose in making investment in shares is not relevant for the purpose of disallowance to be made under section 14 A of the act. We reverse the finding of CIT appeal and restore the order of the assessing officer so far as disallowance under section 14 A of the act is concerned. However the learned assessing officer is further directed to give the credit of the disallowance already offered by the assessee of ₹ 3 05815/– under section 14 A of the Act which is already offered by the assessee. If the above amount has already been added by the assessee in its computation of total income or during the course of assessment proceedings and is already taxed, the learned assessing officer is required to reduce the disallowance of ₹ 665592/– by the sum of ₹ 305815/–. Accordingly, ground No. 1 of the appeal of the revenue is partly allowed. Changed the method of valuation of the closing stock of shares from "at cost" to “at cost or market value, whichever is less” - Held that:- The valuation of the closing stock at cost or market value whichever is less is the most prudent method as it does not recognize the revenue which has not been earned by the assessee. Further it was not shown by the revenue that how the change in the method of the valuation of the closing stock is not bona fides. The decision in UCO BANK [1991 (7) TMI 5 - CALCUTTA HIGH COURT] relied upon by the ld AO supports the case of the assessee as assessee was following valuation method of "At cost" which is changed to "At cost or market value whichever is less‟ is more prudent. No infirmity in the order of the learned Commissioner of income tax appeals. Accordingly, ground of the appeal of the revenue is dismissed
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