TMI Blog2017 (7) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... cision, brought to our notice that the learned DR which is in favour of the revenue on this issue, we respectfully follow the same and uphold the impugned order of the Ld. CIT(A) allowing the claim of the assessee for set off of unabsorbed depreciation pertaining to A.Y. 1997-08 to 2000-01. Disallowance of provisions made for non-moving/obsolete stock and spares - HELD THAT:- Altogether new stand was taken by the assessee before the Ld. CIT(A) that the provision for non-moving/obsolete stock and spares to the extent of ₹ 2,80,01,392/- actually pertained to the difference in physical and book stock as found on physical verification - As submitted that this new stand taken by the assessee for the first time before him however, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -products. The return of income for the year under consideration was filed by it on 29.09.2008 declaring total income of ₹ 168,97,50,664/- and Book Profit of ₹ 302,49,59,000/- under section 115JB of the Income Tax Act, 1961. In the assessment originally completed under section 143(3) vide an order dated 31.12.2010, the total income of the assessee was determined by the AO at ₹ 323,78,07,801/-. The assessment however, was reopened by the AO subsequently inter alia for the reason that assessee s claim for set off of unabsorbed depreciation pertaining to earlier years was wrongly allowed. In this regard, it was noted by the AO that as per the provisions of Section 72 of the Act, no unabsorbed depreciation prior to A.Y. 2001-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. This issue is thus squarely thus covered in favour of the assessee by the said decision of Hon ble Gujarat High Court and in the absence of any contrary decision, brought to our notice that the learned DR which is in favour of the revenue on this issue, we respectfully follow the same and uphold the impugned order of the Ld. CIT(A) allowing the claim of the assessee for set off of unabsorbed depreciation pertaining to A.Y. 1997-08 to 2000-01. Ground No. 1 of Revenue s appeal is accordingly dismissed. 6. The common issue involved in the Ground No. 2 and 3 relates to the deletion by the Ld. CIT(A) of the addition of ₹ 2,80,01,392/- made by the AO on account of disallowance of provisions made by the assessee for non-moving/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be allowed as deductible expenditure. On the basis of his above observation the Assessing Officer disallowed ₹ 3,44,89,000/-. Officer that at the end of every year Physical Verification and Technical assessment were carried out of the Stocks and Spares on the basis of such verification/assessment, all old items of stock and spares, were identified and valued. Depending upon the condition of the old items of Stock and Spares and Current Market Values thereof, the reduction in the existing values were affected by making adjustment entries described as Provision . It was submitted that this Provision actually represented the loss suffered by the appellant and therefore such Provision were deductible in computing the Business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items which had not moved for more than 5 years, had become useless for the appellant s business and so the cost of those unmoved stores aggregating to ₹ 58,41,302 should be considered as an actual loss to the appellant. However, the Assessing Officer did not appreciate the appellant s explanations and disallowed ₹ 3,44,89,000. On the basis of the above facts, the appellant without prejudice to its submission that the Order of Re-assessment should be quashed, submits that since the amount of ₹ 3,44,89,000 had actually represented the loss suffered by the appellant, the Assessing Officer should not have disallowed the same and therefore, the appellant submits that the disallowance of ₹ 3,44,89,000 may kindly be del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative of the appellant. 10. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. As submitted by the Ld. DR, altogether new stand was taken by the assessee before the Ld. CIT(A) that the provision for nonmoving/obsolete stock and spares to the extent of ₹ 2,80,01,392/- actually pertained to the difference in physical and book stock as found on physical verification. He has submitted that this new stand taken by the assessee for the first time before him however, was accepted by the Ld. CIT(A) without giving any opportunity to the AO to verify the same and this position clearly evident from the impugned order of the Ld. CIT(A) is not disputed even by the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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