TMI Blog2019 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... in its paper book along with statements showing details of subsequent sales with regard to the items of closing stock which were revalued to net reliable value along with sample copies of invoices with respect of subsequent sales. From those details it is clear that net reasonable value adoptable by the assessee for the purpose of value of closing stock in certain cases is as per the prevailing accounting practices as accounting standards 2. Hence, we find that no infirmity in the order of CIT(A) and respectfully following the Tribunals decision for AY 2012-13, we confirm the order of CIT(A) and deleting the addition. Adjustment made while computing book profit under section 115JB to the closing stock - HELD THAT:- We find that this issue is answered in the first issue and the same finding will apply here also. Hence, we confirm the order of CIT(A) deleting the addition. Disallowance of provision for leave encashment under section 43B - HELD THAT:- Calcutta High court in the case of Exide Industries Limited And Anr. vs Union Of India (UOI) [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] whereby the provision of section 43B(J) of the Act struck down as arbitrary but stayed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding in the assessment order on the said issue? 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was right in deleting the addition of ₹ 7,94,91,740/- by relying on the judgement in the case of Alfa Laval (India) Ltd, 295 ITR 451 is totally distinguishable on the facts and circumstances of the case, as in the said case, the issue was that the assessee had reduced the value at a fixed rate 10% from the cost in respect of its obsolete stock, which is not the cash in hand? The assessee has raised the following two grounds: - Corresponding adjustment to value of current year opening stock Without prejudice to the department s appeal, erred in not taking last year s closing stock as computed by the Assessing officer in AO order from AY 2012-13 of ₹1,33,46,22,303/- as opening stock for current year, as against the same, AO has taken opening stock as ₹1,27,29,66,467 i.e. without giving adjustment as proposed by AO in AY 2012-3; Consequential value should be taken as opening stock of next year Without prejudice to the department s appeal, erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Para 6,7,11 12 as under: - 6. We have considered the rival submissions of the parties and perused the material available on record. During the assessment the Assessing Officer made addition of ₹6,16,55,838/- by disallowing depreciation on closing stock holding that the depreciation on the closing stock is not eligible deduction. Before the ld. CIT(A), the assessee given the breakup of depreciation on various inventory, demo-vehicles, accessories and consumable Auto Parts in the following manner: Sr. No. Description Cost NRV Cost/NRV whichever is lower A. Inventories/ Demo-vehicles - - - Sub-total 1,20,75,65762 1,15,19,43,005 1,15,19,43,005 B Accessories, Consumables and parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items from closing stock to appropriate reflect its net reasonable value which is lower than the cost. The said reduction from the cost represents the wear and tear of the stocks of the items which are lying in the inventory/showrooms. We noted that there is no factual difference in this year and any adjustment in the closing stock for the year no. 1 would consequently result in the adjustment to the opening stock of year No. 2. Further, we noted that the assessee has filed complete details of valuation of closing stock in its paper book along with statements showing details of subsequent sales with regard to the items of closing stock which were revalued to net reliable value along with sample copies of invoices with respect of subsequent sales. From those details it is clear that net reasonable value adoptable by the assessee for the purpose of value of closing stock in certain cases is as per the prevailing accounting practices as accounting standards 2. Hence, we find that no infirmity in the order of CIT(A) and respectfully following the Tribunals decision for AY 2012-13, we confirm the order of CIT(A) and deleting the addition. 6. The next issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing both the sides and going through the records, we restore the matter back to the file of the Assessing Officer to decide the claim of assessee in term of the decision of Hon ble Supreme Court in the case of Excide Industries (supra). This issue of the assessee s CO is set aside to the file of the Assessing Officer. 10. The first common issue in this appeal of Revenue in ITA No.5793/Mum/2018 for AY 2014-15 and Cross Objection of the assessee in CO. No. 205/Mum/2019 is against the order of CIT(A) deleting the addition of value of closing stock made by Assessing Officer being diminution in the value of closing stock and claiming depreciation therein. For this, Revenue has raised the following two grounds: - 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was right in deleting the addition of ₹ 5,94,98,161/- being diminution in the value of closing stock and claiming depreciation thereon, without appreciating that the A.O. has given categorical finding in the assessment order on the said issue? 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was right in deleting the addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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