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2015 (9) TMI 1284 - ITAT DELHI

2015 (9) TMI 1284 - ITAT DELHI - TMI - Rejection of declared valuation of closing stock - Held that:- Find considerable cogency in the assessee's contention mentioned in the Ld. CIT(A) order that all the purchases and direct expenses under different heads and also sales were verifiable and supported by documentary evidence. The correctness of the declared profit as reflected in the Trading account was well proved and substantiated by the method of accounting regularly employed was not disputed. .....

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45 on the sole basis of difference in unsold closing stock. Further, the AO has violated the provisions of law by adopting the FIFO method on his own without pointing out the defects in LIFO method which is a prescribed method without pin pointing the defects in the method constantly applied by the assessee on the basis of which if proper profit cannot be deduced. AO has wrongly applied the FIFO method and wrongly rejected the LIFO method as applied by the assessee - Decided against revenue.

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d Trade Tax on purchases disallowed - Held that:- As regards addition incurred under the head trade tax on purchase was genuinely incurred in the course of business, hence, the same is also not sustainable in the eyes of law, hence, delete the same. - Decided against revenue.

Carry forward of loss not claimed by the assessee in computation of income - assessee has submitted this was a mistake - Held that:- The assessee made application u/s. 154 of the I.T. Act which has not been disp .....

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st and then decide the issue in dispute by passing a speaking order, after giving adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. - ITA No. 3478/Del/2014 - Dated:- 20-7-2015 - H. S. Sidhu, JM, J. For the Appellant : None For the Respondent : Shri Robin Rawal, Sr. DR ORDER Per H. S. Sidhu, JM. This appeal by the Assessee is directed against the Order dated 25.2.2014 passed by the Ld. Commissioner of Income Tax (Appeals), Meerut for th .....

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Trading account was well proved and substantiated by the method of accounting regularly employed was not disputed. Thus on facts and in law there was no warrant and legal justification for rejection of declared valuation of closing stock. b) That the Authorities below on facts and in law went wrong to reject the declared version and to make the addition of ₹ 2,11,326/-. The addition being erroneous, illegal and untenable on facts and in law deserves to be deleted. 2. a) That the expenditu .....

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ion. b) The impugned disallowance of ₹ 3435/- deserves to be deleted being illegal, void and without jurisdiction. (4.) (Wrongly mentioned as Ground No. 3 in the Appeal) That the Ld. Authorities below erred on facts and in law in not allowing the determined brought forward losses amounting to ₹ 6,44,262/-. Brought forwarded losses on facts and in law deserves to be allowed against income of the year under consideration. 5. That on facts and in the circumstances of the case, interest .....

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to the assessee. In compliance to these notices, authorized representative of the assessee Sh. M.M. Chhabra, Advocate appeared from time to time and filed details and the case was discussed with him. Books of accounts consisting of computerized cash book, ledger, purchase and sale bills and some expenses bills /vouchers were produced which have been examined on test check basis. Thereafter, the AO concluded that the value of closing stock is taken as ₹ 35,67,641/- as against ₹ 33,56, .....

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duced. Hence, assessee has failed to prove that all these expenses were actually incurred for the purpose of its business and failed to produce any evidences in support of the same & therefore these expenses amounting to ₹ 37,457/- was also disallowed vide assessment order dated 13.10.2008 passed u/s. 143(3) of the I.T. Act. 3. Against the assessment order dated 13.10.2008, the assessee appealed before the Ld. CIT(A), who vide impugned order dated 25.2.2014 has dismissed the appeal of .....

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. Ld. DR relied upon the orders of the lower authorities. 6. I have heard the Ld. DR and perused the records available with me especially the orders of the revenue authorities. With regard to ground no.1 (a) & (b) are concerned, I find considerable cogency in the assessee's contention mentioned in the Ld. CIT(A) order that all the purchases and direct expenses under different heads and also sales were verifiable and supported by documentary evidence. The value of closing stock was on the .....

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so find force in the assessee's contention that AO was wrong to hold that the closing stock was not correctly valued on the basis of which by applying FIFO method he made an addition of ₹ 2,11,326/- on the basis of difference in value of unsold closing stock by that method and also rejected the account books which were duly audited by applying the provisions of section 145 on the sole basis of difference in unsold closing stock. Further, the AO has violated the provisions of law by ado .....

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DCIT 64 TTJ (Pune) 815, it has been held that LIFO method of valuation stock is one of the recognized method of accounting and where the Department has accepted the same in the case of assessee for more than 20 years it cannot be allowed to unsettle the settled position and reject that method in absence of any fresh material, therefore, in my view the AO has wrongly applied the FIFI method and wrongly rejected the LIFO method as applied by the assessee. I further find that the Hon'ble Apex c .....

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sed by the assessee. 7. With regard to ground no. 2(a) & 2(b) & 3(a) 3(b) are concerned, I find that the expenditure on job work was genuinely incurred in the course of business. In my considered opinion, such expenditure being incidental and relating to job work receipts of ₹ 2,15,250/- did not warrant any disallowance as the same had been claimed in the preceding as well as succeeding years, which was accepted by the Department, therefore, the impugned disallowance of ₹ 37, .....

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