9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 757 - AT - Income TaxAddition on account of variation of closing stock - machinery lying in closing stock - assessee contended that average price of the machines could not be taken - Held that - No reason to dispute the fact that the machines lying in stock were sold to M/s. Finolex Cables Limited for Rs.30,72,000 as AO did not provide any evidence in support of its contentions the machines lying in stock were different than the ones supplied to M/s. Finolex Cables Limited. The Single Spoolers Type S 631 -2 numbers, which are part of the finished goods valued at Rs.13,32,448 were sold to Finolex Cables Ltd. sale invoice bearing Rs.30,72,000 in the month of October, 2007 and not in the month of April, 2007. Considering the G.P. rate of 17.8% in respect of the said machines and also considering the sale price of Rs.30,72,000, the finished pronlduct valued at Rs.13,32,448 is certainly a case of under valuation. Therefore the said order of the CIT(A) is reasonable and it does not call for any interference - in favour of assessee.
Issues:
1. Valuation of closing stock for assessment year 2007-08. 2. Disallowance of claim for Employees' Contribution to Provident Fund. Issue 1: Valuation of Closing Stock for Assessment Year 2007-08: The appeal by the Revenue and the Cross-Objection by the assessee pertained to the order of the CIT(A)-V, Hyderabad for the assessment year 2007-08. The assessing officer noted discrepancies in the valuation of stock of finished goods by the assessee company, leading to an addition on account of under valuation of closing stock. The Revenue contended that the CIT(A) erred in reducing the addition and questioned the methodology used for valuation. The CIT(A) upheld only a partial addition after considering detailed submissions by the assessee regarding the pricing of machines sold and in stock. The Revenue, aggrieved by the relief granted, appealed. The parties presented arguments regarding the method of valuation, with the Revenue claiming that the CIT(A) prematurely shifted the onus to the assessing officer. The assessee defended the CIT(A)'s decision, asserting that the valuation method followed was consistent with Accounting Standard AS 2. The ITAT, after examining the details and orders, upheld the CIT(A)'s decision, dismissing the Revenue's appeal. Issue 2: Disallowance of Claim for Employees' Contribution to Provident Fund: The Cross-Objection by the assessee raised the issue of disallowance of the claim for Employees' Contribution to Provident Fund amounting to Rs.35,977. The CIT(A) had disallowed this claim, stating that the contribution was made late, and this fact was not disputed during appeal proceedings. The assessee's counsel sought a reexamination of this decision in light of a Supreme Court judgment. Both parties agreed to send the issue back to the CIT(A) for fresh examination based on the Supreme Court's decision. The ITAT partly allowed the Cross-Objection, setting aside the matter for the CIT(A) to adjudicate afresh considering the recent Supreme Court ruling. In conclusion, the ITAT upheld the CIT(A)'s decision regarding the valuation of closing stock for the assessment year 2007-08, dismissing the Revenue's appeal. The Cross-Objection by the assessee was partly allowed, directing a fresh examination of the disallowance of the claim for Employees' Contribution to Provident Fund in light of a Supreme Court judgment.
|
