Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (1) TMI 361

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... te after deducting direct expenses incurred for realizing the sale and hence we find no infirmity in the valuation method adopted by the assessee. We find that the assessee had valued the closing stock by the method that it has regularly and consistently followed for valuation of stock. - Decided against revenue Addition towards commission - non deduction of tds - CIT(A) deleted the addition - Held that:- CIT(A) had categorically given clear findings in respect of this addition as that the TDS was indeed remitted by the successor concern i.e proprietary concern of the assessee on 31.5.2006 which is well within the due date of filing the return of income u/s 139(1) of the Act and hence the disallowance u/s 40(a)(ia) of the Act could not be made on that account and is self explanatory and none of these findings were refuted by the Learned DR during the course of hearing before us . Hence we do not find any reason to interfere with the order of the Learned CIT(A) in this regard. - Decided against revenue - I.T.A No.1673/Kol/2009 - - - Dated:- 18-11-2015 - Shri Mahavir Singh,Judicial Member, and Shri M. Balaganesh, Accountant Member For The Appellant : Shri Snehatpal Datta, .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... vide letter dated 17.11.2008 which was even before the show cause notice issued by the assessee asking for explanation in difference in valuation of stock. In the said letter , the assessee also explained that the main buyer of the products of the assessee is Tata Motors Ltd and that the main buyer had changed its long term contract with effect from 1.7.2005 and brought down the rate per MT substantially. Taking into account the same, the closing stock as on 30.6.2005 was valued by the assessee at ₹ 85,11,544/- being the lower of cost or net realizable value. The Learned AO did not appreciate the contentions of the assessee and made an addition of ₹ 12,54,947/- ( being the arrived value of ₹ 97,66,491/- by Learned AO and declared value of ₹ 85,11,544/- by assessee) towards difference in valuation of closing stock of M.S.Scrap. On first appeal, the same was deleted by the Learned CITA duly appreciating the contentions of the assessee by giving a clear finding. Aggrieved, the revenue is in appeal before us on the following ground:- 1. For that the learned C.I.T (A)-XX, Kol was not justified in deleting the addition of ₹ 12,54,947/- made by the Asse .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t or market price whichever is lower, and it is now generally accepted as an established rule or commercial practice and accountancy. Even otherwise, we find that the Learned AO had taken the last realized selling price of M.S.Scrap whereas the closing stock needs to be valued as realisable value or cost whichever is lower. Even on this count, the valuation made by the Learned AO is not appreciated. We find that the main buyer of the assessee M/s Tata Motors Ltd had reduced the rate per MT of M.S. scrap to ₹ 15107.4 per MT with effect from 1.7.2005 is very crucial and is already on records which fact is not disputed by the revenue. Based on the reduction in the rate with effect from 1.7.2005, the net realizable value had automatically come down and the assessee had valued the stocks applying that rate after deducting direct expenses incurred for realizing the sale and hence we find no infirmity in the valuation method adopted by the assessee. We find that the assessee had valued the closing stock by the method that it has regularly and consistently followed for valuation of stock. Accordingly, the ground no.1 raised by the revenue is dismissed. 3. The next issue to .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed AO without bringing any positive material on record to controvert the claim of the assessee cannot doubt the veracity of the claim. With regard to the alternative claim of non compliance of TDS provisions, the Learned CITA held as follows:- 5.3 The AO has also taken an alternative ground for disallowing commission of ₹ 23,00,000/-. According to the AO, the appellant has not deducted tax on commission payment and therefore the same was not allowable as per the provisions of section 40(a)(ia). The Ld. AR argued before me that the firm was dissolved and was taken over as going concern by one of the partners with effect from 01-07-2005. The appellant has accounted for the amount of ₹ 23,00,000/- payable to the said parties to determine the actual income of the appellant relevant to the period of its existence. The appellant has neither credited the accounts of the said parties nor made any payments to them during the period ending 30-06-2005. The payment was made by the successor of the firm and the tax was deducted and paid to the credit of the central government. It was contended that the deduction and payment to the credit of the central government took place wit .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates