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2009 (1) TMI 241 - HC - Income TaxObsolete Stores – Held that - As per the provisions of section 145A of the Act of 1961, the income from business under the head “Profits and gains from business” has to be computed in accordance with method of accounting regularly employed by the assessee. Similarly, section 145A of the Act of 1961 provides that the inventory shall be valued in accordance with the method of accounting employed by the assessee, therefore, if the method of valuation adopted by the assessee is recognized method, then, the same cannot, be rejected on the ground that the net realizable value/market value has keen determined on the basis of certain estimate. - It has come on record that the assessee has valued the inventories such as nut, bolt, glass fuse, bearing bushes, lock pin, pipe, screw etc., which were rusted non-moving and unusable on account of obsolescence/damage/deterioration by efflux of lime at cost and net realization value, whichever is lower. - It is also not disputed before this court that the assessee had made the requisite efforts to dispose of the same. – Decided in favor of assessee
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