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2018 (5) TMI 1599 - AT - Income TaxValuation of stock - Disallowance of addition made by AO u/s 145A - inclusion of taxes in the value of stock - assessee has adopted exclusive method of accounting - disallowance of Provision of Warranty against the supply of the goods - Held that:- AO erred in including the element of taxes only in the closing stock of inventories - provisions of Section 145A requires to include the amount of tax in the value of purchase, sale and inventory - assessee has been following its method of valuation for the inventory, purchase and sale consistently for the last several years and no defect in the method of accounting for the inventories was recorded by the AO in his assessment order - appeal filed by the Revenue is dismissed Expenses towards provision for guarantee - whether the same is un-accrued/un-ascertain/contingent liability - Held that:- the provision is created on scientific basis can be claimed as deduction against the profit determined under the head business and profession - the assessee was eligible to create the provision of ₹ 16,08,926/- being 10% of purchase order. However, the assessee has created provision of ₹ 30,00,000/- - issue is restored to AO for fresh adjudication - allowed for statistical purposes.
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