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2013 (11) TMI 214 - ITAT MUMBAIValuation of closing stock - A.O. enhanced value on account of accessories - Held that:- it cannot be held that the quantity of stock shown to the bankers was actually the correct quantity and what has been shown in the books of account as on 31st March 2002, are incorrect. Once, there is not much of a difference in quantity, the difference in the value of stock disclosed to the bank and as appearing in the books of account will not make a difference as the stock disclosed to the banker is only for the purpose of hypothecation or for credit/overdraft facilities. In cases where stock are disclosed to the bank, one has to see the quantity of stock disclosed and tally it with the quantity shown in the books of account. Value wise difference is not that material as assessee may show higher value. At least there should not be difference in quantity. Even though the proper reconciliation could not be filed before the Assessing Officer, the learned Commissioner (Appeals) and the Assessing Officer were required to examine, once these were furnished at the appellate stage and there is not a whisper by the learned Commissioner (Appeals) why such an additional evidence of reconciliation of statement is not accepted. Once these additional evidences have not been rejected, it has to be presumed that the same has been admitted by the learned Commissioner (Appeals) and is part of the record - Decided against assessee. Disallowance of damaged goods - Held that:- assessee has made a very categorical submission that the aforesaid amounts have been reversed in the assessment years 2003-04 and 2001-02 and have been offered for tax. If that is so, the disallowance of claim for damaged goods cannot be taxed in this year - Therefore, matter is restored back to A.O. - Decided in favour of assessee. Disallowance of purchase expenditure - Held that:- Each and every purchases has been accounted for by the assessee in its books of account which has now been confirmed by the MIL through bills number - assessee’s records have been disbelieved without any reasons, secondly all these documents were available before CIT(A) and AO in remand proceedings and lastly, the same are now verifiable from the face of the record - Decided in favour of assessee. Undisclosed sales - Distribution of part of free samples - Held that:- assessee has given details of container samples given to various statutory authorities which were 950 pieces and samples for pre-production and pre-shipment for 830 pieces, we are of the considered opinion that it would be reasonable to give over all benefit of 1,800 sample pieces from the total free samples of 2,978 pieces. Balance cannot be allowed for the simple reason that the same have not been substantiated by way of any documentary evidence at all - assessee was unable to substantiate as to what was the rate per piece sold in the local market. Had it been so, then the rate per piece as worked out by the assessee could have been applied. Thus, out of the total pieces of 2,978, the Assessing Officer is directed to give benefit of 1,800 pieces and balance pieces should be treated as undisclosed sales after applying the rate of Rs. 505.21 - Decided partly in favour of assessee. Disallowance u/s 43B - Commission paid to directors - Held that:- payment of commission to the directors was made by account payee cheque on 11th October 2002 i.e., much prior to the date of filing the return of income which was on 31st October 2002. Under section 43B, any sum paid to an employee as bonus or commission, the same is to be allowed while computing the income under section 28 of that previous year in which such sum is actually paid. Once the cheque has been paid to the directors, the date of payment will relate back to the date of cheque only as it is not the case of the Department that these cheques have not been encashed - Following decision of Commissioner Of Income-Tax, Bombay South, Bombay Versus Ogale Glass Works Limited [1954 (4) TMI 3 - SUPREME Court] - Decided in favour of assessee. Disallowance of staff training expenses - Held that:- assessee is unable to bring on record as to whether the higher studies undertaken by the director at Harvard Business School, was in any way, for the purpose of business of the assessee and whether there is any direct nexus with the studies undertaken by the director with that of the business of the company. While claiming such an expenditure, the onus is on the assessee to substantiate that such a training of higher education by one of the directors was for the benefit or promotion of the assessee’s business - Decided against assessee. Deduction u/s 80HHC - Held that:- For the purpose of export of garments, export quota is required by the exporters who are registered with Apparel Export Promotion Counsel. If any exporter is unable to export as per the quota, the excess can be sold to other exporters. Such a receipt is neither covered in either of the clauses mentioned in clause (iiia) to (iiie) of section 28 nor it is any kind of receipts mentioned in clause (baa) of Explanation to section 80HHC. Thus, in our opinion, in such a situation when there is no bar in clause (baa) of explanation to sec.80HHC, then it has to be treated as part of the profit of business and cannot be reduced for the purpose of deduction under section 80HHC - Decided in favour of the assessee.
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