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2016 (4) TMI 952 - HC - Income TaxAddition of loss due to fall in value of stocks - genuity of purchases - Tribunal deleted the addition - method of accounting - Held that:- The payment made is undisputed. The custody of the goods namely, iron ore as that of the assessee, though may be lying at the various ports, is also undisputed. When the assessee has made the payment for purchase of a particular quantity of material and the goods are lying in the custody of the assessee, though may be at various ports, the same could validly be termed as stock in trade. If the value of such stock in trade has gone down, the deduction for the difference of the price is permissible. On the contrary, if the appellants’ contention is accepted, then in the succeeding year when it is offered to tax for the amount of ₹ 29.50 Crores and the deduction is made impermissible, it would result into double taxation. It is not a case of the revenue that with a view to avoid real tax, the book entries were shown lowering down the value of the stock. On the contrary, it is on account of the objection raised by C.A.G., that the assessee has correctly valued the stock on trade at the market price, prevailing then. The case of manipulation f or avoiding the payment of tax stands on a different footing, but the same has not been pleaded before the Tribunal in the instant case. The decision upon which reliance has been placed cannot be made applicable to the facts of the present case, when the factum of payment made by the assessee and the goods in custody of the assessee, are not in dispute. There is no question of shifting the tax liability from one year to another as sought to be canvassed, in the instant case. - Decided in favour of assessee.
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