TMI Blog2016 (5) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the disallowance u/s. 14A may be restricted to 2% of the dividend income earned by the assessee Addition made to the value of closing stock by invoking provisions of section 145A - Held that:- Assessee invited our attention to the paper book, wherein the assessee has prepared the profit and loss account both under exclusive method and inclusive method. Through this statement, the assessee has demonstrated that Net profit disclosed by the assessee remains the same under both methods. This statement shows that there would be no effect on the profit even if exclusive method is followed. We noticed that the Assessing Officer has not examined this statement put forth by the assessee.Accordingly, we are of the view that this issue requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble High Court of Bombay has held in the case of Godrej Boyce Manufacturing Company Ltd. (328 ITR 81) that the provisions of Rule 8D shall be applicable from A.Y. 2008-09 onwards only and the disallowance u/s. 14A shall be made for earlier year on a reasonable basis. Learned Counsel submitted that the assessee has made investment of ₹ 31.72 crores and it is having own funds of ₹ 211.76 crores. Further the assessee has used proceeds realised on sale of land as well as collection from debtors for making investment in mutual funds during the instant year. Learned Counsel submitted that most of the shares held by the assessee are brought forward from earlier year and during the year under consideration it has made investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. We notice that the assessee had followed exclusive method for accounting the taxes, whereas the Assessing Officer added the tax and duties to the value of closing stock, without making adjustment to the value of purchases and sales. The contentions of the assessee are that, making adjustment to only the value of closing stock without making corresponding adjustments with the value of opening stock, purchases and sales would give distorted result. We agree with the said contentions. The Ld A.R invited our attention to page 14 of the paper book, wherein the assessee has prepared the profit and loss account both under exclusive method and inclusive method. Through this statement, the assessee has demonstrated that Net profit disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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