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2019 (4) TMI 2138 - ITAT BANGALOREProvision for non-moving/obsolescence stock disallowed - as argued provision for non-moving / obsolescence in stock was made as per the mandatory requirement under AS 2 (i.e. Valuation of inventories) prescribed by ICAI and Accountant Standard 1 prescribed by the Central Govt. u/s 145 of the Income-tax Act - HELD THAT:- The fact remains the ld. AR has not demonstrated the nature of the goods which became obsolescence and what is the cost and net realizable value. The decision relied upon by the AO is on the provision for warranty whereas in the present case the disallowance is for non-moving / obsolescence goods. The ld. AR contention that they are slow moving. The fact remains that the assessee could not substantiate and the CIT(A) has referred in the observations that the assessee could not substantiate with the detailed working of provisions and no details of listed items of obsolete have been produced and the basis of value and comparables at cost or market value and also there is no policy decision in respect of such non-moving / obsolescence goods. We are of the substantiate opinion that since both the AO and the assessee could not substantiate with the information and CIT(A) also dealt on this issue, we restore the disputed issue to the file of the AO to verify and examine the method of accounting treatment of obsolescence goods and examine the statements filed in the course of hearing. Grounds of appeal of the assessee is allowed for statistical purposes. Non-deduction of TDS on payments made to non-residents - AR submitted that the commission is paid outside the country and Agents only procure orders - HELD THAT:- When we read the clauses and findings of CIT(A), the fact remains that the non-resident should have the some technical expertise to check quality of products. We found section 9(1)(vii) deals with fee for technical services, in the present case. We are of the substantiate opinion that the submission of the Assessee cannot be accepted because the non-resident Agent has to check the quality of goods ordered by the customers with some expertise in international market and the ld. AR could not prove that there is no permanent establishment and supported the arguments with judicial decision and explains that the assessee has paid only commission and the works are in the nature of procurement of goods but it conflicts clauses of the agreement entered by the assessee with the non-residents. Further the assessee could not substantiate with reasons that how the quality of goods can be checked by the non-residents when they do not have any expertise in the international market. Therefore we are of the opinion that the CIT(A) after considering the provisions, facts and finding has taken a reasoned decision and we uphold the same and dismiss the ground of appeal of the assessee.
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