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2012 (8) TMI 558 - AT - Income TaxAddition to the closing stock on an adhoc basis - low gross profit margin - non-maintenance of stock register - Held that:- It is observed that AO simply made addition to the closing stock valuation without rejecting the books of account and non verification of valuation adopted by assessee for the closing stock. Also, there was no increase in the royalty expenditure and also turnover. Therefore, there is no basis for making an addition. Salary expenses - part time employees - dis-allowance of 50% - CIT(A) restricted addition to 15% - non-maintenance of salary register etc - Held that:- CIT (A) after considering the explanation of assessee that part-time employees were engaged to supervise sales at various exhibitions and since they are continuously changing, they are not on pay roll but assessee produced the vouchers to support the expenditure paid to them, restricted the addition to 15%. No infirmity in the order Payment made to BMC for property tax - dis-allowance on ground of inability to substantiate the amount - Held that:- Requirement of proof of payment to the BMC authorities to allow in the year of payment was required while computing the income from house property but not allowing the expenditure under section 37(1) as business expenditure. Moreover, assessee has already furnished the evidence regarding the dispute with the owner and payment by way of deposit to the Court. No need for any dis-allowance. Dis-allowance u/s 40(a)(ia) - royalty payments made to Authors - AO disallowed amount on the reason that assessee did not file details of the authors to whom royalty was paid and basis on which royalty was paid - non-deduction of TDS - Held that:- Provisions of Section 194J cannot be made applicable to the payment made to the authors. Without establishing that the amounts are covered by any TDS provisions, there is no need for invoking the provisions of section 40(a)(ia). Deletion of dis-allowance confirmed - Decided against Revenue
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