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2016 (10) TMI 313 - ITAT KOLKATADisallowance u/s 14A - Held that:- The facts stated remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the ld AO had resorted to make disallowance u/s 14A of the Act on a notional basis by assuming that the borrowed funds were utilized for making investments. But from the aforesaid facts, we find that it is clearly established that the investments were purely made only out of surplus funds lying in the current account at the instance of the bankers. The disallowance of interest on notional basis is contemplated only in Rule 8D(2)(ii) which is admittedly not applicable for the year under appeal. Hence there cannot be disallowance of any interest u/s 14A of the Act. The basic premise of the ld AO that the borrowed funds were utilized for making investments and correspondingly disallowance u/s 14A of the Act is to be made, stands defeated in view of the aforesaid finding. Hence we find no infirmity in the order of the ld CIT-A in this regard. Addition made on account of valuation of closing stock of work in progress - Held that:- We find that the ld CITA had given categorical findings with regard to the treatment given by the assessee in the valuation of closing stock of work in progress as on 31.3.2007. The ld DR was not able to controvert any of the findings given by the ld CITA before us. Under these circumstances, we do not find it necessary to interfere with the order of the ld CITA in this regard. Accordingly, the ground raised by the revenue is dismissed.
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