ITAT allows appeal for statistical purposes, emphasizing re-examination by CIT(A) based on submissions and evidence.

The ITAT allowed the appeal for statistical purposes in both issues, emphasizing the need for a thorough re-examination by the CIT(A) based on the submissions and evidence provided by the appellant. The disallowance of membership fee to Jain International Trade Organization was remitted for re-examination to determine its nature and purpose, while the addition of value of closing stock was remitted for lack of quantitative details supporting the scrap valuation discrepancy.

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Issues:
1. Disallowance of membership fee as non-business expenditure
2. Addition of value of closing stock

Issue 1 - Disallowance of Membership Fee:
The appellant, a company engaged in manufacturing, paid Rs 11 lakhs to Jain International Trade Organization (JITO) for trade and industry development. The AO disallowed this amount as non-business expenditure, considering it a charity. CIT(A) upheld the disallowance, stating JITO was for Jain community's philanthropic activities. The appellant appealed, arguing JITO is a trade organization. The ITAT remitted the matter to CIT(A) for re-examination, emphasizing JITO's nature and the fees' purpose. The ITAT allowed the appellant's ground for statistical purposes.

Issue 2 - Addition of Value of Closing Stock:
The AO added Rs 5,79,669 to the appellant's income due to a discrepancy in scrap valuation between the stock statement and balance sheet. CIT(A) upheld the addition, noting the lack of quantitative details supporting the scrap generation. The appellant contended that the difference was due to valuation, and the scrap was sold in the subsequent year. The ITAT found no finding on the scrap sale by CIT(A) and remitted the issue for re-examination, directing the appellant to provide necessary details. The ITAT allowed the appellant's ground for statistical purposes.

In conclusion, the ITAT allowed the appeal for statistical purposes in both issues, emphasizing the need for a thorough re-examination by the CIT(A) based on the submissions and evidence provided by the appellant.

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