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2016 (5) TMI 240 - AT - Income TaxAddition on undervaluation of stock - Held that:- Undisputedly the assessee has been following the weighted average rates method in valuing the stock and same was accepted by the Revenue in earlier years. Therefore, there is no justification in rejecting the method of valuation made by the Assessing Officer. Moreover, the Assessing Officer has not furnished the reasonable explanation of the reasons for rejecting mode of valuation adopted by the assessee. We have carefully examined the order of the CIT(A) and find that the CIT(A) has adjudicated the issue in a right perceptive in deleting the addition - Decided in favour of assessee Addition on account of unexplained investment in acquisition of excess stock of marble - Held that:- Since assessee has not challenged this order of the CIT(A), it attains the finality. So far as the addition of ₹ 53,78,792/- is concerned, the CIT(A) has restricted the addition to the profit earned on the sale of stock outside the books of account at 11%, resulting into addition of ₹ 5,91,667/-. Since we do not find any infirmity in the order of Ld. CIT(A) as the addition is only to be made with respect to profit earned on stock of sale outside the books of accounts. Accordingly, we confirm the order of the CIT(A) in this regard.- Decided against revenue Addition u/s 56 - purchase of shares by the assessee from Bharat Bearings Ltd. and Shankar Telecom Ltd. for ₹ 1 per share against the face value of shares of ₹ 10/- for each share - CIT(A) deleted the addition - Held that:- We find that undisputedly the transaction took place in the month of April, 2010 whereas the provisions of Section 56 (2)(viia) was made applicable w.e.f. 01.06.2010.Therefore, the provisions cannot be attracted to the present transaction. The applicability of the other provision of Section 69 and 69A was also examined by the CIT(A). Since CIT(A) has properly adjudicated the issue in the light of relevant provisions of the Act, we find no infirmity therein. Accordingly, we confirm his order.- Decided against revenue Disallowance u/s 14A - Held that:- CIT(A) has calculated the disallowance as per Rule 8D and Section 14A. Since no specific defect in the calculation of disallowances were pointed out by the Ld. DR, we find no infirmity in the order of the CIT(A) - Decided against revenue
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