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2013 (8) TMI 830 - AT - Income TaxWriting off of stock - CIT deleted addition - Held that:- provision for slow moving/obsolete inventory, which is created each year in the profits & loss account and balance sheet prepared in accordance with the Companies Act, 1956, has been specifically added back while computing taxable income under the IT Act, while filing the return of income of the respective year i.e. the assessee has not claimed deduction on the 'Provision' created in its accounts, in its income tax computation in the earlier years - assessee had sold the slow moving stock and disclosed the sale proceeds, in its sales account. The provision was written back as no longer required in the accounts and as the provision was not claimed as an expense in its income tax computation in the year in which it was created, the same need not be added back once again. The action of the AO is a double addition. A figure which was never claimed or allowed as a deduction in the earlier year was added back - CIT DR has mistook the write back of provision of inventory, as sale proceeds of slow moving/obsolete inventory of raw materials and thus the confusion. The write back of provision is not sale proceeds of slow moving/obsolete inventory. The sale proceeds have been accounted for as income under the head turnover "Gross turnover" in the profits & loss account. It is not a case where sale proceeds of these obsolete stocks are not accounted for at all - no infirmity in the order of the first appellate authority - Decided against Revenue.
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