Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 476 - AT - Income TaxDeletion made on account of provision for diminution in the value of closing stock – Held that:- The AO had made the addition in view of the fact that assessee had claimed an amount in the P&L A/c as provisions for diminution in valuing of stock whereas the fact remains that assessee has been following its policy of valuing stock at cost price or net realizable value whichever is lower which is apparent from the accounting policy being followed by the assessee – the net realizable value of stock is always determined after reducing the value of damaged/un-useable stock from the gross value of stock - The assessee instead of taking the net realizable value of stock in the trading account took gross value of stock in trading account and claimed the decrease in value in its P&L A/c - Had it had claimed the net realizable value of closing stock in trading account, the debit of provision for diminution in value of stock in P&L Account under schedule 15 would not have appeared - The valuation of stock has been done on the basis of general accounting policy as regularly followed by the assessee - CIT(A) has rightly deleted the addition – Decided against Revenue.
|