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2012 (4) TMI 281 - HC - Income TaxNo change in the method of valuation of closing stock by the respondent-assessee during the assessment year 1993-94 as considered by ITAT – Held that: - Revenue has not been able to demonstrate and show that in the earlier Assessment Years, the respondent had valued the closing stock at cost and not on Net Realizable Value basis and has not shown what is stated and averred in the impugned order passed by the tribunal is factually incorrect. In view of above factual position, it is not possible to hold that the order of the Tribunal is perverse. Deleting the addition made by the Assessing Officer to the income of assessee on account of under valuation of closing stock – Held that: - Held in Supreme court case in Sanjeev Woolen Mills v. CIT Mumbai (2005 - TMI - 6166 - SUPREME Court) closing stock can be valued on cost price or at market price, if the market price is less than the cost. However, the said principle does not apply if the market value of the closing stock is more than the cost, as profits cannot be brought to tax on notional basis - in favour of the respondent-assessee and against the Revenue. Reimbursement payable by the manufactures – AO stated that the respondent assessee was receiving reimbursement of the loss on export from the sugar manufacturers and losses were reimbursed, therefore, the assessee should compute the closing stock on cost basis i.e. Net realizable Value plus reimbursement – Held that:- there was no statutory or contractual obligation under which the respondent-assesses could have claimed reimbursement of export losses from the mills/manufacturers from whom it had procured/purchased sugar for export - The obligation, if any, was moral but non statutory or non contractual - against the Revenue and in favour of the respondent-assessee Depreciation on lease hold rights - The contention of the appellant-Revenue is that the assessee is not entitled to depreciation in respect of lease hold rights in office/ flat, and car parking space etc. as the respondent/assessee was not the registered owner. - held that:- this issue has to be decided against the Revenue and in favour of the respondent-assessee in view of the decision of the Supreme Court in Mysore Minerals v. CIT (1999 -TMI - 5760 - SUPREME Court).
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