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The Ld. CIT(A) has erred in deleting disallowance of Rs. 3,92,60,000/- u/s 14A of the Income Tax Act, 1961.

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Section 14A, 36, 115JB of Income Tax Act, 1961—Business Disallowance— There is no dispute that assessee is at liberty to value its stock at cost or market value, whichever is lower as per consistent method of accounting, and such reduction if any , in value of the shares held as stock-in-trade will be allowed but, if such a provision is made outside the trading account ( only while computation of income) then same may not be allowable, thus, it is not clear whether the provision for diminution in value of stock-in-trade has been made out of the trading account or within the trading account , therefore, it is appropriate to restore the issue to the file of AO for verifying the facts from the books of accounts and other records of the assessee and decide the issue in dispute afresh in accordance with law. - ADDI. CIT V/s PNB GILTS LTD. - [2020] 183 ITD 111 (ITAT-DELHI)