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2007 (12) TMI 217 - HC - Income TaxNotional Tax - According to the Revenue, the tax effect in this case on a notional basis is about Rs. 47.65 lakhs, although the assessee has been assessed at a loss - According to for the Revenue, deletion of additions made by the AO will be carried forward to the subsequent years and may reduce the taxable income for those years - Held that - The Commissioner of Income-tax (Appeals) observed that the manner of valuation was in accordance with the method consistently followed by the assessee. It was also found that a decrease in stock of Rs. 1.09 crores was partly due to the sale of finished goods at lower than cost and partly due to diminution in the value of the closing stock. The explanation given by the assessee for making loss on such sales was found by the Commissioner of Income-tax (Appeals) to be reasonable and supported by documentary evidence – revenue appeal dismissed.
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