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TMI Blog2002 (4) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... ecline to interfere with the order of the CIT(A). 3. Ground No. 2 deletion of addition of Rs. 4,58,000 being excess amortization of expenses. This has reference to the comments of the C AG under s. 619(4) of the Companies Act, 1956 wherein it has been stated that the expenditure on mine exploration and development expenditure in respect of Rajpura-Dariba Mines was not done in accordance with Accounting Policy II(d) which resulted in excess amortisation of expenditure by Rs. 4.58 lacs during 1989-90 and less amortisation by Rs. 105.07 lacs during the years 1984-85 to 1988-89. This had the effect of understatement of profit for 1989-90 by Rs. 4.58 lacs and overstatement of balance of surplus carried to balance sheet by Rs. 100.49 lacs upt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. In the auditor s report dt. 17th July, 1990, the auditors had commented upon the changed basis of valuation of moore cake, neutral sand, lime sludge and copper cadimum which has reduced the profits of the company by Rs. 838.30 lacs. The assessee s claim was not accepted by the Dy. CIT on the ground that there was a change in the method of valuation of the stock which has resulted in heavy reduction of profit. It was not the case of the assessee that the recoverable metal value is only Re. 1 per tone. The valuation made was against the normally accepted accounting principles. The auditor had not found any justification for the sudden change in the valuation method. It cannot be that these items suddenly became unmarketable this year w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. yr. 1996-97) through order of this Bench dt. 24th April, 2002. Therefore, we decline to interfere with the order of the CIT(A). 12. Ground No. 4 deletion of disallowance of Rs. 78,43,000 made by exclusion of interest on Government loan and head office expenses. The AO had disallowed the claim of the assessee for exclusion of interest on Government loans and head office expenses as an element of cost from the closing stock. The AO was of the view that the assessee was not able to justify the sudden change in accounting method during the year on the lines of the report of the committee to evolve accounting policies for central public enterprises published by the Department of Public Enterprises, Ministry of Industry, Government of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT(A) that the change in the method of accounting is bona fide and is according to the principles of accountancy, i.e., Accounting Standard No. II of the Bureau of Public Enterprises. This issue is also similar to ground. No. 4 in ITA No. 1106/Jp/1994 (asst. yr. 1991-92) through order of this Bench dt. 16th Oct., 2001. Therefore, we decline to interfere with the order of the CIT(A). 15. Ground No. 5 Deletion of addition of Rs. 5,40,68,000 on account of slow and non-moving stores and spares less by 25 per cent. It was stated by the learned authorised representative before the authorities below that because of a large number of items involved it was not possible to prepare an item-wise inventory. Generally all prices are below 25 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the CIT(A) that the addition has been made due to some misunderstanding. It will be seen that though it is stated in the note No. 12 p. 44 of the audit report that the additional depreciation has been provided by adopting Sch. XIV of the Companies Act leading to the understatement of the profit of Rs. 120.23 lacs, it will be seen from the accounts filed that the assessee had worked out the depreciation of Rs. 19.96 crores computed on the basis of the Companies Act had been added back to the income and thereafter the depreciation had been claimed as per the IT Rules which had been allowed by Dy. CIT. It was, therefore, submitted that the observation of the auditors are not with reference to the claim of the assessee made with refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit. The same cannot be extended to payment of advance tax also. Besides it is impracticable because the current book profits come to be known only after closure of books which is much after the due dates for advance tax payments. The decision of Tribunal in the case of Steel Authority of India Ltd. vs. Dy. CIT (1991) 40 TTJ (Del) 559 : (1991) 38 ITD 193 (Del) was relied upon. The learned authorised representative also placed reliance on the judgement of the Hon ble Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT (2000) 159 CTR (Kar) 316 : (2000) 243 ITR 519 (Kar). The learned authorised representative also invited attention to Circular No. 13/2001 dt. 9th Nov., 2001 issued by the CBDT. The circular is with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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