Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 839 - HC - Income TaxAdoption of value of closing stock - ITAT directing the Assessing Officer to adopt the value of the closing stock as declared by the assessee - Held that:- The objection raised by the assessee on account of the method of accounting is not justifiable, inasmuch as Section 145A deals with the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head "Profits and gains of business or profession" and it requires the assessee to follow the method regularly employed by the assessee. In the present case, it is not in dispute that the method of accounting had been altered with effect from the Assessment Year 2001-02. However, the facts reveal that the write off was on account of deterioration in the condition of the non-moving stores since the assessee's plants were located in remote places and near the sea. The non-moving stores and spares were corroded over a period of time due to wear and tear. This method of accounting having been adopted in the earlier years, there was no reason for the Assessing Officer to disallow the same on the ground that the accounting method had changed. Accordingly, we are of the view that the Judgment of this Court in the case of Heredilla Chemicals [1997 (1) TMI 66 - BOMBAY High Court] will not affect the write off by the assessee in the present case being distinguishable on facts. It is not merely on the basis of obsolescence of any particular equipment that the assessee has claimed write off of the slow/non-moving items. The write off claimed is essentially on the basis of deterioration of various materials, including raw-materials and in particular slow moving items of machinery. No substantial question of law arises.
|