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2017 (6) TMI 869 - AT - Income TaxValuation of closing stock - non-moving items in closing stock - Held that:- A perusal of the assessment orders placed on record shows that in the preceding assessment years and in the succeeding assessment years the Assessing Officer has not raised any objection in excluding the value of raw material which is more than 6 months old. Although, the assessee has been consistently following the same method of valuation of closing stock i.e. excluding the value of raw material which is more than 6 months old while determining the value of closing stock, the Commissioner of Income Tax (Appeals) has correctly restricted the addition to ₹ 3,64,990/- by following the ratio laid down in the case of Alfa Laval India Ltd. Vs. DCIT(2003 (9) TMI 43 - BOMBAY High Court) wherein approved the method of valuation of closing stock of obsolete item at 10% of the cost. Dissallowance of amount contributed by the assessee towards unapproved gratuity fund - Held that:- Vide rectification order dated 09-11-2015 passed u/s. 154 of the Act, the Commissioner of Income Tax (Appeals) rejected the claim of the assessee with respect to contribution towards unapproved gratuity fund. Thus, in view of the subsequent order passed u/s. 154 of the Act, ground have become infructuous. Disallowance of legal and professional charges - Held that:- The expenditure has been incurred by the assessee for the efficient conduct of its present business with more awareness of the competitors, new markets and the source of procurement of product in which the assessee is already dealing. The expenditure was not incurred for opening any new line of business hence, the expenditure incurred is not capital in nature. Disallowance of contribution made towards payments of premium of group gratuity fund with Life Insurance Corporation of India - Held that:- As in the case of Commissioner of Income Tax Vs. Jaipur Thar Gramin Bank (2016 (11) TMI 794 - RAJASTHAN HIGH COURT ) has held that once the assessee fulfills the condition laid down for approval after having created a trust with Life Insurance of India and the assessee has been regularly contributing towards the said fund, the claim of the assessee cannot be rejected on the ground that the Commissioner of Income Tax (Appeals) has not approved the fund. The assessee should not suffer for inaction of the revenue authorities. Thus, as now the Commissioner of Income Tax has approved the fund, the contribution made by the assessee towards group gratuity fund is allowable u/s. 36(1)(v) of the Act
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