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2015 (11) TMI 1280 - AT - Income TaxTrading addition - rejection of books U/s 145(3) - CIT(A) reducing the trading addition - Held that:- The assessee has shown G.P. rate @ 13.2% on total sale of ₹ 6.86 crores as against the G.P. rate @ 13% on sale of ₹ 6.82 crores in immediate preceding year. The assessee has maintained day to day stock register of gold and silver ornaments but not maintained the stock register for diamond jewellery, this constitutes 5.6% of total turnover. The assessee had not made any purchase from URD but made purchase from customer who are bringing their old ornaments for sale at assessee’s shop and normally the jewellery is either being converted/remade or new jewellery is being purchased by them. The assessee has only finished goods, therefore, the assessee is not required to maintain stock register of unfinished stock. The assessee had followed LIFO method of closing stock since number of years and no addition had been made by the ld Assessing Officer in past on this ground and same has been followed by the assessee consistently. The Coordinate Bench had already considered the identical facts and circumstances of the case in assessee’s own case in A.Y. 2006-07 and 2007-08 and dismissed the revenue’s appeal. - Decided against revenue. disallowance of interest - CIT(A) deleted the addition - Held that:- The partners of the firm had sufficient interest free funds including profit earned during the year. Therefore, no notional interest disallowance can be made by the Assessing Officer in absence direct nexus between the interest bearing fund and interest free advances. Thus, we confirm the order of the ld CIT(A). - Decided against revenue. Addition on excessive interest payment to the persons covered by Section 40(A)(2)(b) - CIT(A) deleted the addition - Held that:- Disallowance under the provisions of Section 40A(2)b) cannot be made out of interest payment to family members without establishing excessiveness or unreasonableness of the rate of interest. The assessee paid interest to the close person covered U/s 40(A)(2)(b) of the Act @ 18% confirmed - Decided against revenue.
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