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2016 (4) TMI 994 - AT - Income TaxDisallowance of manufacturing loss - Held that:- The facts of the case discussed in the decision of co-ordinate bench in the case of Shukra Jewellery Ltd. vs. ACIT (2009 (4) TMI 949 - ITAT MUMBAI) are also similar to the facts of the case we are dealing in. We, therefore, respectfully following the decision of the co-ordinate bench referred above and also on the basis of our discussion made above, including wastage norms set by the Handbook of Procedures (Vol.I) 1st September 2004 – 31st March, 2009 issued by Ministry of Commerce and Industry, Department of Commerce, Government of India and also following consistent principle of manufacturing process by the assessee duly supported by audited financial statements and complete quantitative records, we are of the view that no disallowance is called for in manufacturing loss. - Decided in favour of assessee Addition for suppression of closing stock - Stock valuation method adopted by the assessee - Held that:- Looking to the fact that assessee has been maintaining method of accounting consistently and no change has been made in the opening stock by the Assessing Officer, weighted average cost has been calculated as per accounting standard issued by ICAI and even if the comparative working of valuation of stock on FIFO basis and weighted cost on average basis as given by the Assessing Officer during assessment proceedings then also the result will be in negative and nothing can be inferred that the appellant had derived any undue advantage. In these circumstances, we are of the view that stock valuation method adopted by the assessee in the year under appeal has been consistently followed since last many years, no defect in the books have been pointed out by the Assessing Officer nor books of account have been rejected and the valuation of closing stock by applying his own formula of weighted average cost without applying it to the opening stock of the assessee and, therefore, in our view this addition for suppression of closing stock is uncalled for and needs to be deleted. - Decided in favour of assessee Disallowance on account of office expenses - Held that:- CIT(A) has rightly deleted the addition because such kind of ad hoc disallowance are normally uncalled for in the case of assessees who are regularly maintaining books of account which are audited u/s 44AB of the Act and all the documents relating to expenses incurred are verified by the auditors and also looking to the magnitude of the turnover of the assessee which in this year is ₹ 17.36 crores, expenses incurred on account of office expenses, office maintenance, miscellaneous expenditure, printing & stationery expenditure aggregating to ₹ 4,59,911/-, cannot be said as unreasonable. Therefore, ld. CIT(A) has rightly deleted the ad hoc addition - Decided in favour of assessee
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