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2012 (8) TMI 89 - AT - Income TaxAddition on account of suppression in valuation of closing stock - Held that:- As Tax Audit Report clearly demonstrate that the assessee was valuing the closing stock by FIFO method which was accepted in assessment order for assessment year 2007-08 by the AO no merit in the action of AO for valuing closing stock as per average rate of purchases - restore this ground to the file of AO for detailed calculation of stock as per FIFO method. Disallowance of warehouse charges - invoking provisions of Section 80IB(13)and Section 40A(2) - Held that:- No merit in the action of the AO for making disallowance on the plea that sister concern of the assessee is availing exemption u/s 80IB - that neither AO has brought any material on record to say that fair market value of warehousing charges paid was lower nor the assessee has placed on record the operative rate of cotton charges prevailing in the market - restore this ground to the file of AO for reconsider the issue with reference to the provisions of Section 40A(2B) Disallowance u/s 40A(2)(b) - Held that:- AO has given detailed calculation of payment made to the sister concern on account of purchases made with reference to the market rate prevailing on the date of purchase and nothing was brought on record to dislodge the finding of AO - confirm the disallowance made on account of purchase made from sister concern under provisions of Section 40(a)(ii)(b) - against assessee. Reworking of assessee’s claim of depreciation - Held that:- As this ground was not before the AO therefore in the interest of justice this ground is restored back to the file of AO to recalculate depreciation allowable.
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