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2024 (1) TMI 361 - GUJARAT HIGH COURTUndervaluation of closing stock - Tribunal restricting the disallowance to the extent 25% as AO did not brought any contrary evidence on record to disbelive the contention of the assessee with regard to the justification for increase of quantum of damaged goods before the CIT (Appeal) - Whether Tribunal was right in restricting the disallowance, inspite of the fact that Hon'ble Tribunal itself has observed that the assessee has not provided the quantity of damaged or unsaleable product and valued it without justifying with the comparable cases? - HELD THAT:- As the findings of fact arrived at by the Assessing Officer and CIT (Appeal) are without any basis and contrary to the materials produced on record by the Assessing Officer in form of the stock statements of various ‘C’ and ‘F’ locations whose stocks were physically taken and verified by the Firms of the Chartered Accountant of those locations. The Tribunal has therefore in order to prevent the revenue leakage has adopted a middle path by restricting the addition to 25% in the closing stock. We would also like to observe that the Tribunal ought not to have restricted such addition to 25% without any basis and only by estimating the same in absence of any material on record for the same. However, as the addition is in closing stock which would have a cascading effect and the year under consideration is 2011-12, we would not like to interfere in the impugned order of Tribunal on that ground only. No substantial question of law arises.
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