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TMI Blog2013 (1) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure G show how the assessee arrived at the write off factor. These figures have to be verified by the AO. While therefore holding that the Tribunal was not right in accepting the revenue’s contention in principle, AO is directed to verify the figures furnished by the assessee in support of the write off factor of 8.50% and complete the assessment afresh on this limited issue - in favour of assessee subject to the remit order passed. - ITA No. 521/2012 - - - Dated:- 21-12-2012 - S. Ravindra Bhat And R.V. Easwar, JJ. Appellant Rep. by : Mr. Ajay Vohra, Ms. Kavita Jha and Mr. Somnath Shukla, Adv Respondent Rep. by : Mr. N P Sahni, Sr. Standing Counsel with Mr. Ruchesh Singh, Adv. JUDGEMENT Per : R.V. Easwar, J : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected the assessee s explanation on the ground that such write off was only a prudent decision of a trader to set apart an amount for meeting the liability which was contingent and that there was no present obligation capable of commercial valuation which would justify the deduction. In this view he disallowed and added back the amount of Rs. 1,58,70,623/. 4. The assessee carried the matter in appeal before the CIT(Appeals) who noted that the claim was supported by the accounting standards (AS-2) on valuation of inventories issued by the Institute of Chartered Accountants of India. He held as follows: The assessing officer, however, while passing the impugned assessment order did not make a suitable adjustment in the loss of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent years and so long as the fall in the market value of the finished goods below the cost of production is not doubted, the estimate of 8.5% also cannot be doubted or held to be without any basis. Our attention was drawn to Annexure G which depicts the working of the writing down of the raw material, components and consumables to the net realizable value. It is submitted that the chart given in Annexure G supports the assessee s plea and it is submitted that the Tribunal erred in overlooking these details. 7. On the other hand the learned standing counsel for the income tax department strongly relied on the findings of the Tribunal, particularly the finding that the write off factor of 8.5% was only an estimate which was not p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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