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2013 (6) TMI 431 - AT - Income TaxProvision of obsolete stock disallowed - Held that:- The assessee is continuously following the policy of valuation of closing stock on the basis of net realizable value which is in accordance with accounting principle. The fact becomes clear by the tax audit report wherein it at 12(b) the auditors have written that there is no deviation from the method of valuation prescribed under section 145A of the Act. From the Notes to Accounts and Tax Audit report it can be said that valuation of inventories was being done at lower of cost or net realizable value and was in accordance with provisions of section 145A of the Act. The assessee instead of taking the net realizable value for valuation of closing stock took the cost price of obsolete item and created a provision for difference in cost price and market value and debited the same to P&L Account, the effect of which is same. Therefore keeping in view the judicial pronouncements relied upon by the assessee on CIT Versus BECTON DICKINSON INDIA PVT LTD. [2012 (12) TMI 210 - DELHI HIGH COURT] appeal of assessee allowed.
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