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2014 (10) TMI 871 - AT - Income TaxRejection of books of accounts - Held that:- In the Remand Report the contentions of the assessee that the AO was not justified in rejecting the books of accounts was accepted by the AO. The AO also accepted the contention that he has not been able to point out any discrepancy in the books of accounts and stock record produced by the assessee before him. Thus, in our view, the First Appellate Authority had no other option but to reject the action of AO in rejecting the books of accounts. - Decided against revenue Valuation of finished goods - Held that:- The AO in para (ii)(a) of his remand report specifically mentioned that he has examined copy of the ledger account on packing material, stock record etc. The AO was not able to point out any discrepancy in the claim of the assessee that the cost of finished goods does not include the cost of packing material. In the absence of any adverse finding by the AO, in the remand report, the First Appellate Authority was right in accepting this claim of the assessee.- Decided against revenue Scrap @ 48.93% allowed by CIT(A) - Held that:- In the remand report the AO has, on the issue of generation of scrap, accepted the fact that the assessee has produced complete details of the scrap generated and scrap sold. The AO also obtained necessary confirmations from the parties to whom the scrap was sold. The AO also accepted the fact that the percentage of scrap fixed by the excise authorities was only, for the purpose of giving incentives to the assessee and has no effect on the actual facts of the case.The assessee had submitted various letters to the excise authorities for revision of the norms of scrap fixed by them. In view of the above observations by the AO in the remand report, we find no infirmity in the order of the First Appellate Authority - Decided against revenue Addition made on account of business promotion expenses - CIT(A) deleted the addition - Held that:- AO had made an adhoc disallowance without specifying any details. The assessee had produced complete details of these expenses during the course of remand proceedings. In view of the above, we do not find any infirmity in the order of the First Appellate Authority.- Decided against revenue Addition made on account of incentive and commission expenses - CIT(A) deleted the addition - Held that:- The appellant has been paying this commission every year. During the year it has paid commission. The disallowance in view of the above details and the nature of the services rendered by the recipient was not justified.- Decided against revenue
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