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2016 (11) TMI 883 - AT - Income TaxAddition made on account of loss on valuation of slow moving / non-moving items and old stock - Held that:- From the record we found that the inventory in question was neither written off / written down nor shown as slow moving or old inventory in earlier assessment years including the accounts for the period ended on 31/08/2007 prepared by the erstwhile management. Since present management of the assessee-company and the auditors were of the opinion that since the inventory in question was slow / non-moving and old, its value was to be thus written down / the inventory was to be written off in the audited accounts for the period ended 26/09/2007,as it had no realisable value. And such write-off / writing down in the value to Zero on 26/9/2007 itself was strictly in accordance with Paras 20, 21 & 24 of the AS-2 and Para. 20 of AS-20. It is not the case of the AO that the assessee has not submitted any documentary evidence and the reasons for writing off the inventory in question. His case is that loss on inventory had already been incurred by the assessee in the earlier years when the erstwhile management of the assessee-company had shown the inventory in question as old and slow-moving stocks in the audited accounts for the year ended 31/03/2005,31/03/2006, 31/03/2007 and the accounts for the period ended on 31/08/2007. However, this loss was cristalised by valuation of non-moving and slow moving stock during the year under consideration, therefore assessee had correctly claimed the said loss during Assessment year 2008-09 under consideration. No justification for disallowing the loss claimed on account of valuation of obsolete/slow moving inventory - Decided in favour of assessee
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