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TMI Blog2023 (4) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... after referred to as "the Act") dated 13.02.2017 framed by ld. DCIT, LTU-1, Chennai. 2. Facts in brief are that the assessee is a limited company engaged in manufacturing and marketing petrochemicals viz. Linear Alkyl Benzene, Epicholoorohydrin and Chemical intermediates - Caustic Soda and Chlorine, filed nil income return filed on 22.11.2012 for the relevant assessment year 2013-14. The case was selected for scrutiny followed by serving of notice u/s. 143(2) & 142(1) of the Act. Ld. AO, after considering submissions of the assessee completed the assessment proceedings making various additions and disallowance amounting to Rs. 6,05,22,819/-, computing the income of the assessee in the following manner: Returned Income Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to note that the CBDT has issued circular No.5/2014 dated 11.02.2014 provides for disallowance of the expenditure even whether tax payer in a particular year has not earned any exempt income. 3.1 The learned CIT(A) has erred and directed the AO to delete the addition made on account of closing stock and held that there was a typographical error in the ITR filed in A.Y.2013-14. 3.2 The learned CIT(A) failed to note there is clearly a difference of 5 MT in the opening and closing stock between the ITR and Form 3CD and it's not just a typographical error. 3.3 The learned CIT(A) failed to note that the assessee has not offered any explanation during the course of scrutiny proceedings for this discrepancy. 4. The learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. CIT(A). 7. We have heard rival contentions, perused records placed before us. 8. The revenue's ground no. 1 is general in nature which needs no adjudication. 9. Ground no. 2.1 to 2.4 of revenue's appeal relates to the disallowance u/s. 14A of the Act. During the course of hearing ld. Counsel for the assessee submitted that the assessee company has not earned any exempt income during the year and this fact was not controverted by ld. DR. We, therefore in view of the recent judgment of Hon'ble Delhi High Court in the case of PCIT vs Era Infrastructure (India) Pvt Ltd 141 Com 289 (2022), are inclined to hold that for the year under appeal, in absence of any exempt income disallowance u/s. 14A of the Act is uncalled for. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation of financial statement. The ld. CIT(A) deleted the said disallowance applying the ratio laid down by the Hon'ble Apex Court in the case of CIT vs Woodward Governor India Private limited (2009) 312 ITR 254. 12. We find that the alleged claim of foreign currency loss is notional in nature and the same has been calculated for the outstanding foreign currency payable/receivable by the assessee for the contract which have not expired at the close of the year. In the instant case, such contract which did not expire on 31.03.2013, the foreign currency loss has been calculated, considering the currency value on the last date of the financial year. However, in the subsequent period, when these contracts expire or the liability to be payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub clause (viia) to section 56(2) of the Act. It deals with the consideration received against sale of equity shares below the fair market value or without consideration and for receiving any sum below the fair market value, if it exceeds said consideration such excess amount is subjected to tax. Though, ld. AO has not invoked the said provisions while making the addition in the hands of the assessee, however, fact remains that there has been a change in the sale consideration, as what is received was less than what was agreed. The transaction having entered through an agreement, there must have been some correspondence between both the parties to agree to the rate of Rs. 16.93 per share. Before us, ld. Counsel for the assessee failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven during the financial year 2011-12 to MAPE Advisory Group, but since, the sale of equity shares finally concluded during the financial year 2012-13 relevant to assessment year 2013-14 claim is justified to calculate the long term capital gains on the sale transaction. 15. We therefore are of the view that expenditure towards professional fees paid for the said sale transaction has been rightly claimed during the year under appeal, because the genuineness of the expenditure is not in doubt and the facts as narrated by the assessee are found to be correct. We therefore, confirm the findings of the ld. CIT(A) allowing the claim of cost of Rs. 1,05,85,891/- incurred for effecting transaction of sale of equity shares. Thus, ground no. 5 rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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