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2015 (12) TMI 376 - ITAT MUMBAIDisallowance of excess cost claimed - CIT(A) held that the assessee is not required to follow the method of valuation prescribed u/r 9B of I.T. Rule, 1962 thus deleted the addition - Held that:- Cost to be allowed during the year depends upon the closing stock of the previous year, purchases during the year and the valuation of the closing stock would be dictated by sub Rule 2 & 3. From the assessment order, it appears that the Assessing Officer has misconstrued the provisions of Rule 9B and has not applied sub Rule 2,3 properly. In fact ignored sub Rule 4 completely and did not allow the closing stock of the previous year of unsold films which is to be allowed as deduction irrespective of sale or not. Thus, instead of loss of ₹ 18,22,482/- claimed by the assessee in the return, loss of ₹ 62,94,368/- have to be allowed as per Rule 9B. We find that as per the cost of acquisition, closing stock adjustment in past year’s closing stock may lead to allowing higher losses in the instant assessment year. The method followed by the assessee is endorsed and the addition made by the Assessing Officer was rightly deleted by the CIT(A) in the assessment year i.e 2007- 08. This factual legal finding needs no interference from our side. We uphold the same. - Decided against revenue
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