TaxTMI 
TaxTMI 
2016 (12) TMI 677
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....lding the impugned assessment order u/s.143 (3) of the Act is opposed to law, facts and circumstances of the case. 2. The Learned CIT (A) erred in upholding the addition on valuation of stock of Rs. 15,30,23,182/- on the ground that the assessee has to value the closing stock on a consistent basis. 3. The Learned CIT(A) failed to consider and appreciate that the method of valuation of stock has not changed and in the face of the undisputed fact that the closing stock consisted of only raw stock lying in mining sites and does not consist of components like screening, crushing, transportation and incidental direct costs and valuation being highly technical, the Learned A.O and the Learned CIT(A) cannot form any opinion without an expert opi....
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....rs in Form 3CD that method of valuation of closing stock employed by the assessee is purchase cost plus other direct cost on FIFO basis. Thereafter, he drew our attention to the tax audit report for the present year available at pages 12 & 13 of PB. In particular, our attention was drawn page 13 of PB and it was pointed out that in this year also, the auditors have reported that closing stock is valued at purchase cost plus other direct cost or market value, whichever is lower. 4. Thereafter, he submitted that on pages 35 & 36 of PB is the computation of value of closing stock as on 31.3.2008 and 31.3.2009 and it was pointed out that same method of valuation is adopted by the assessee in both the years and therefore, the addition made by t....
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.... expenses i.e., shifting charges, labour charges, supervision charges etc. but in this regard, explanation was submitted by the assessee before the AO which are reproduced by the AO on page 3 of the assessment order and it was explained that as on 31.3.2009, the entire quantity of stock was unfinished product and it was only extracted and meant for shifting to stock plots. It was also submitted that shifting charges was incurred by the assessee on this stock in the next year and therefore, in the present year, the closing stock cannot be valued at production cost appearing in the profit & loss account, as has been done by the AO. It was also submitted that screening & crushing expenditure was also incurred in the next year and therefore, no....
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....see's group concerns for its exports. On this basis, he disallowed this expenditure. Thereafter, he submitted that on page 39 to 45 of PB is a copy of license agreement between assessee and Chennai Port Trust ["CPT"] as per which, the assessee is required to export minimum 2 lakh tons at the end of license period by using this plot. Thereafter, he submitted that the premises was used for business purpose of the assessee because the said plot was used to store the business stock of the assessee company and this fact has not been disputed by the department because the AO is also saying that the plot in question was used by sister concern, M/s. Obulapuram Mining Co. Pvt. Ltd. and this was the explanation of the assessee through out that assess....
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....ion to clause 4(d) and 4(e) of the said agreement available at page 40 of PB as per which it was specified that minimum 2 lakh tonnes of iron ore has to be exported before the end of license period and since this has not been done by the assessee, the expenditure is not allowable. 9. We have considered the rival submissions. We find that this is the objection of the AO that as per license agreement between assessee and CPT, the assessee was required to make exports for using this plot of about 2 lakh tonnes of iron ore before the end of license period and since the assessee has not made any export, the plot in question was not used by the assessee for business purpose and therefore, expenditure on account of rent of plot is not allowable. ....