TMI Blog1994 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has shown 68% trading loss in the tractor spares division. It was explained before the Assessing Officer that Escort tractors agency was discontinued and the old stock of Escort tractors spares parts lying with the assessee was sold at very low prices resulting in huge loss. As the assessee was not maintaining quantitative details, it could not be verified as to how much old stock was lying with the assessee and how old it was. The assessee failed to produce the books of accounts in support of its claim. The audit report furnished was also found to be qualified. Bank reconciliation was not done. Stocks was not found taken. Audit of accounts was done after four years from the end of the previous year. On consideration of these facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request for accepting them back but the Escort Ltd. did not accept them, but assured that they would help the assessee in disposal of those spare parts through other dealers. The Escort Ltd. accordingly made a reference to some of their dealers and as a consequence one dealer offered to purchase the same for lump sum amount of Rs. 8,000 in Feb., 1983. The CIT(A) was not satisfied with the explanation given and he confirmed the disallowance made with the following observations— "In these circumstances, I am inclined to agree with the Assessing Officer that the audit report furnished is qualified. The stocks have been taken only as certified by the management. Moreover, it has been seen that the previous year for this assessment year star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertained to the current year and it has rightly been claimed in the present assessment year. The learned counsel has, therefore, pleaded that lower authorities have not properly appreciated the facts and disallowed the loss claim without justification. 4. The learned Departmental Representative relied upon the order of the lower authorities. He also pointed out that opening stock of tractor spares was at Rs. 81,075 in the asst. yr. 1984-85 whereas the assessee had shown the opening stock of tractor spares at Rs. 1,58,309 in the asst. yr. 1985-86. As per the learned counsel of the assessee, the opening stock of unsaleable tractor spare parts which was of Rs. 81,075 in the beginning of the preceding year again swelled to Rs. 1,58,309 in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort tractor spare parts were made. The Escorts Ltd. however promised help to sell those parts to other dealers. When Escorts Ltd. contacted its dealers for sale of such surplus spare parts, one dealer M/s Jainco Tractors, Delhi offered a lump sum amount of Rs. 8,000 for the said dead stock of spare parts in letter dt. 10th Feb., 1983. It so appears the assessee did not make a deal with this dealer for surplus stock. 6. During the current year, the assessee declared closing stock at Rs. 90,201 after writing off the dead stock of Rs. 1,98,699. The details of the closing stock has been given as under: Opening stock (1.4.84) Rs. 1,58,309,76 Add : Purchases during year Rs. 3,89,158.15 Total Rs. 5, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not maintained day-to-day quantitative records of spare parts. As per the counsel for the assessee, the spare parts were valued at cost at the close of the year. However, the assessee in its written submission before the first appellate authority had submitted that the closing stock of the current year at Rs. 90,201 has been taken at the close of the year on the basis of physical verification and valued at cost or market value whichever lower. The assessee has thus given conflicting version of the method of valuation of closing stock. The market value of the dead stock should not be more than Rs. 10,000 looking to the offer made by Jainco Tractors and its cost price should also not exceed Rs. 40,000 looking to the total closing stock of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has made a submission that the Ahmedabad Bench of the Tribunal has taken a consistent view that proviso to s. 43B has retrospective effect and as such its provisions are not attracted in cases where the sales-tax liability is paid within the time allowed for filing of return under s. 139(1). In support, he relied upon the decision of Tribunal, Ahmedabad Bench in the case of Chandulal Venichand vs. ITO (1991) 40 TTJ (Ahd) 358 : (1991) 38 ITD 138 (Ahd). He also submitted that the decision of the Tribunal in the case of Chandulal Venichand has since been approved by the Hon'ble Gujarat High Court in their judgment CIT vs. Chandu Lal Venichand (1994) 118 CTR (Guj) 257 : (1994) 209 ITR 7 (Guj) : (1994) 73 Taxman 349 (Guj). He, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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