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TMI Blog2014 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... hether or not the assessment order is erroneous and prejudicial to the interest of the Revenue – Revision is justified. Disallowance made u/s 14A of the Act – Held that:- The assessee did earn exempt income but did not offer any disallowance u/s 14A - Even if the assessee made investment in securities out of own funds, the disallowance on account of “other expenses” was called for u/s 14A - The Assessing Officer did not consider the application of section 14A – As held in Godrej & Boyce Ltd. Mfg. Co. v. DCIT 2010 (8) TMI 77 - BOMBAY HIGH COURT] disallowance is required to be made on some 'reasonable basis’ under the circumstances which are prevailing – Revision in justified. TDS and income reconciliation not done - The Assessing Officer, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Income-tax u/s 263 of the Act, in relation to the assessment year 2005-2006. 2. This appeal is time barred by one day. An affidavit has been filed on behalf of the assessee stating the reasons for the delay in filing the instant appeal by one day. We are satisfied with the genuineness of the reasons in the belated presentation of the present appeal. Accordingly, the delay is condoned and appeal is taken up for hearing for disposal on merits. 3. Briefly stated the facts of the case are that the original assessment in this case was completed u/s 143(3). Thereafter the CIT issued notice u/s 263 on following seven issues:- (i) Short term capital loss of Rs 5,525 wrongly set off against business income. (ii) Section 14A d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of the total income, the assessment order would be called as erroneous and prejudicial to the interest of the revenue notwithstanding the fact that in the subsequent years the effect of the mistake is neutralized. It is each year as a separate unit which has to be considered for the purposes of section 263 for examining as to whether or not the assessment order is erroneous and prejudicial to the interest of the Revenue. As the assessment order on this score , in itself, is erroneous and prejudicial to the interest of the revenue, in our considered opinion, the learned CIT was justified in directing the Assessing Officer to revise the assessment order on this point. 7. Second issue is about not making of any disallowance u/s 14A. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder u/s 143(3) was passed in this case on 31.12.2008. Be that as it may, the Hon'ble jurisdictional High Court in Godrej & Boyce Ltd. Mfg. Co. v. DCIT [(2010) 328 ITR 81 (Bom)] has held that disallowance is required to be made on some 'reasonable basis' under the circumstances which are prevailing before us. We, therefore, do not find any infirmity in the impugned order on this issue requiring interference. 10. Next issue on which the learned CIT revised the assessment order is about TDS and income reconciliation not done. The learned AR submitted that pursuant to restoration of matter by the learned CIT to the A.O., the Assessing Officer vide his order u/s 143(3) read with section 263 did not make any addition on this account. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 145A as per which the valuation of inventory is required to be done in 'inclusive' manner. As against that, the assessee valued its inventory of raw material on 'exclusive' basis by not including the amount of Cenvat at Rs 33.24 lakh. The Hon'ble jurisdictional High Court in CIT Vs. Mahalaxmi Glass Works Pvt. Ltd. [(2009) 318 ITR 116 (Bom.)] has held where in the closing stock unutilized Modvat credit is adjusted, similar adjustment should be made to the opening stock also. Similar view has been canvassed by the Hon'ble Bombay High Court in CIT Vs. Mahavir Alluminium [(2008) 297 ITR 77 (Del.)]. No where it has been held that despite the mandate of section 145A, the stock should be valued as per 'exclusive' method. Even the Mumbai b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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