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TMI Blog2012 (8) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... g aggrieved the respondent has formulated the following questions of law for the consideration of this Court. i) Whether the ITAT is correct in law and on facts in deleting the addition of Rs.21,46,479/- on account of provision during the A.Y. 2003-04 included in accumulated provision of Rs.69,98,363/- without appreciating the fact that the assessee failed to discharge the burden of proof cast upon it to prove that the actual market value of such stock has gone down by Rs.21,46,479/- as compared to its cost of acquisition during the relevant assessment year? ii) Whether the ITAT is correct in law and on facts in deleting the addition of Rs.21,46,479/- included in accumulated provision of Rs.69,98,363/- on the basis of its observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge and passage of time. Consequently, the quality as well as the effective life of the chemicals gets eroded resulting in reduction of value. However, the Assessing officer did not accept the respondent-assessee's explanation and disallowed the deduction of Rs.69.98 lacs claimed by the assessee-company on account of non moving/slow moving stock. 4) In appeal, the Commissioner of Income Tax (Appeals) by an order dated 26/4/2007 allowed the respondent-assessee's appeal. In the order, it was held that the respondent was valuing its stock at cost or market value whichever was lower. The provision of Rs. 69.98 lacs on account of non moving/slow moving stock was an accumulated provision for the assessment year 1996-97 onwards and the provision w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock after having reduced the amount attributable to loss on account of slow moving/ non moving stock. It is not alleged that the finding of the authorities is perverse. Further, we find that it is not disputed that the valuation of the closing stock has been taken as the valuation of the opening stock in the subsequent assessment year. It is also not disputed that the valuation of the inks gets depreciated due to passage of time as a consequence of deterioration of quality. The respondent-assessee had also led evidence of the Chemical Engineer to support its contention that value of some chemicals in stock had eroded and consequently they had to be revalued. In the circumstances, we do not find that question (i) to (iv) as formulated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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