Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (9) TMI 289 - AT - Income TaxBest judgement assessment - rejection of books of account - rice mill - alleged lower yield on comparison with yield of other rice mills - undervaluation of closing stock of by product - Held that:- Simply because the yield has been marginally less in case of the assessee, the books of account could not have been rejected. The Assessing Officer has not brought any material on record to show that actual yield was higher in case of the assessee. Therefore, addition in this respect is directed to be deleted. As far as addition in respect of valuation of closing stock of husk is concerned, in our opinion, the correct value of stock has to be adopted even if books are not rejected. Since we have not upheld the rejection of books of account still addition on account of correct value of closing stock can be maintained and accordingly we confirm the order of the ld. CIT(A) in this regard. Addition u/s 40A(2) - goods sold to sister concern at lower value - Held that:- It is settled law that Section 40A(2) can not be applied for making addition for the difference in value of sales at which the goods are actually sold and the value which in the opinion of the Assessing Officer is correct value. Further, Supreme Court in case of CIT V. Glaxo Smithkline Asia (P) Ltd (2010 (10) TMI 21 - SUPREME COURT OF INDIA ) has itself agreed that certain amendments are required to be made in Section 40A(2) if Transfer Pricing Regulations were required to be applied to domestic transactions between related parties. In view of aforesaid, provisions of section 40A(2) cannot be attracted for making addition on account of difference in sale value effected by the assessee in comparison to the fair market value - Decided in favor of assessee. Undervaluation of closing stock - Held that:- Stock has to be valued at cost or market value whichever is lower and the sale value cannot be applied for valuation of closing stock - Decided in favor of assessee
|