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2017 (3) TMI 956 - AT - Income TaxRejection of books of accounts - trading addition - Held that:- Effectively, the price at which the goods have been sold during the year has been accepted by the Revenue and the same cannot, therefore, be a basis for upholding the rejection of books of accounts. Secondly, regarding the under valuation of the sub-standard stock, the assessee has submitted that the same has been valued at a realizable value at which such stock has been sold in the subsequent F.Y. 2011-12 as demonstrated through actual sales invoices and the results of the subsequent financial year have been accepted by the Revenue. Further, it is noted that the assessee is in the same line of business over the years and is following the same method of accounting in respect of valuation of its stock as well as accounting for purchase and sales and its books of accounts have all along been accepted by the Revenue for the previous and the subsequent years. In light of above, we do not see a justifiable reason for rejection of books of accounts as maintained by the assessee. Hence, the action of the Ld. Assessing Officer in rejecting the books of accounts cannot be sustained. In light of above, the trading addition of ₹ 13,09,166/- as upheld by the Ld. CIT(A) on account of rejection of books of accounts is hereby deleted. In the result, ground no.1 of the assessee is allowed. Addition u/s 40(a)(ia) - Held that:- We hereby delete the disallowance under section 40(a)(ia) as no amount remained payable as on 31st March. In the result, the ground no. 2 of assessee is allowed. Interest free advances to two family members with whom the assessee did not have any business connection - Held that:- We have gone through the order of Ld. CIT(A) who has held that the assessee has given interest free advances to two family members with whom the assessee did not have any business connection. The assessee has not been able to controvert the said findings of the ld CIT(A). In light of above, the test of commercial expediency having not been satisfied, we confirm the order of Ld. CIT(A). In the result, ground taken by the assessee is dismissed.
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