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2020 (7) TMI 618 - AT - Income TaxUndervaluation of closing stock - method of valuation of the marble block - basis of valuing stock as defective stock on lumpsum basis or on estimated basis - AR submitted that during the year only stock of marble block is considered defective and valued at net realizable value - CIT(A) has returned a finding that there is no evidence to show 50% of stock of marble block is defective and also there is no justification for valuing such stock at 55% of its value - HELD THAT:- AO has returned a finding that even in the stock register, the assessee has not mentioned any stock as defective and no differentiation or marking was given in the stock register. AO has carried out the necessary verification of stock register and such a finding of the AO has not been rebutted before us and thus attains finality. Further, how the assessee has arrived at net realizable value @ 55% of cost is not clear. AR has referred to range of value at which marble blocks were sold during the year and in the subsequent financial year 2015-16, however, what is the percentage of realization or at what profit/loss margins, the blocks were sold has not been specified - assessee has failed to justify the quantum of defective stock of marble blocks and its realizable value, thereby the addition made by the AO is hereby confirmed. In the result, the ground of appeal is dismissed. Disallowance u/s 14A read with Rule 8D - HELD THAT:- As noted that investment in shares of SBBJ has been made in the earlier years as is evident from the computation done by the AO wherein there is no change in the value of investment at the beginning of the year and at the close of the year. In AY 2013-14, the ld CIT(A) has given a finding that interest free funds were more than investment made by the assessee and disallowance of interest was deleted which was subsequently upheld by the Coordinate Bench. However, disallowance on account of administrative expenses was sustained at ₹ 13,414. Therefore, following the earlier year, the disallowance of administrative expenses of ₹ 2,974 as made by the AO is upheld for the impugned assessment year. In the result, the ground of appeal is dismissed.
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