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TMI Blog2016 (5) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no change in the income under both the methods by furnishing necessary workings. Accordingly, we are of the view that the assessee should be given one more opportunity to demonstrate this fact. If the assessee fails to furnish the workings discussed above, in our view, the AO should consider the alternative contention of the assessee, viz., to adjust the opening stock with the correct amount that was actually adjusted in the closing stock of immediately preceding year. We have already noticed that the there was contradiction in the stand of DRP. If the service tax is considered to the tax incurred in bringing the goods to the present location and condition, then the same is required to be adjusted both in the opening stock and closing stock. Otherwise, the same should not be adjusted in both the items. Addition u/s 40(a)(ia) - short deduction of TDS - HELD THAT:- We find that this issue has been examined by the Mumbai Bench of the Tribunal [ 2011 (7) TMI 956 - ITAT MUMBAI ], wherein, it was held that the provisions of section 40(a)(ia) can be invoked only in the event of non-deduction of tax at source but not lessor deduction of tax at source. Identical view was taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Rules. 4. We have heard the learned representatives of both the parties and have also gone through the records on this issue. It may be observed that in the case of Godrej Boyce Manufacturing Co. Ltd. (supra) the Hon'ble Bombay High Court has held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable but can be applied only if the assessee's method is not satisfactory. It has been further held that Rule 8D is not retrospective and applies from A.Y. 2008-09. For the years for which Rule 8D is not applicable and in the event of that the AO is not satisfied with the explanation/working given by the assessee, disallowance under section 14A has to be made on a reasonable basis. Almost similar view has been expressed by Hon'ble Delhi High Court in the case of 'Maxopp Investment Ltd. Others' vs. CIT (247 ITR 162). 5. It may be further observed that it is not a case where no exempt income was received by the assessee despite making investments for earning exempt income. It is also not the case of the Revenue that the exempt income earned by the assessee was very less or not in proportion to the investments made by the assessee for this purpose. Under such circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis:- 9. Vide ground No.2(a), the assessee has agitated the addition of ₹ 14,728,838/- to the value of the closing stock under section 145A of the Act on account of CENVAT credit and service tax credit. The assessee alternatively, vide ground No.2(b), has contended that if the above amount is to be added to the closing stock, the AO ought to have added ₹ 11,801,670/- to the opening stock on account of addition made to closing stock for assessment year 2005-06 as per assessment order dated 15.12.06. 10. We find that the assessee had agitated such additions in the preceding assessment years. The Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)], in its order in relation to assessment year 2005-06, has observed that it had been a recurring issue from the assessment year 2002- 03 onwards. The Ld. CIT(A), in view of the decision on this issue taken in the earlier assessment years and following the principle of judicial consistency, had deleted the additions made by the AO in respect of CENVAT credits etc. The Revenue though agitated the order of the Ld. CIT(A) before the ITAT on certain other issues, but did not agitate the action of the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bring the goods to the place of its location and condition on the date of valuation, then the DRP should not have upheld the adjustment of ₹ 46,86,174/- pertaining to the Service tax portion to the value of closing stock. Thus, it is seen that there is apparent contradiction in the approach of the DRP. 15. The main contention of the assessee is that there is no tax implication even if the inclusive method prescribed in sec. 145A of the Act is followed. However, the assessee has not furnished workings to show that the net profit remained the same under both inclusive method and exclusive method . Since the assessee has followed the guidance note issued by the ICAI, it would be in a position to demonstrate the above said fact before the AO, i.e., the assessee could establish that there was no change in the income under both the methods by furnishing necessary workings. Accordingly, we are of the view that the assessee should be given one more opportunity to demonstrate this fact. 16. If the assessee fails to furnish the workings discussed above, in our view, the AO should consider the alternative contention of the assessee, viz., to adjust the opening stock with the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR. 5.1. We have considered the rival submissions and perused the material available on record. We find that so far as, the issue of short deduction of TDS is concerned, the ld. DRP has discussed this issue at page-13, para-8.1 onwards of the order. The assessee deducted tax at source at lower rate than required under the provisions of the Act. The ld. Assessing Officer did not accept the explanation of the assessee, thus, he allowed the claimed deduction of expenses to the extent of TDS made and disallowed the expenses corresponding to default in making the TDS. We find that this issue has been examined by the Mumbai Bench of the Tribunal in (2012) 17 taxman.com 158 (Mum.), wherein, it was held that the provisions of section 40(a)(ia) can be invoked only in the event of non-deduction of tax at source but not lessor deduction of tax at source. Identical view was taken by Hon ble Kolkata High Court in the case of S.K. Tekeriwal (supra) order dated 03/12/2012. In the absence of any contrary decision brought to our notice, we allow this ground of the assessee. 6. Next ground is with respect to making disallowance of ₹ 28,76,961/- u/s 43B in respect of motivator (₹ 21,74,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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