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TMI Blog2013 (7) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... r from the orders of both the revenue authorities as to how the addition u/s 68 was made, when all the persons, who had advanced loans to the assessee in the previous and/or earlier years, had been accepted. On the other hand, the CIT(A) also accepted the submissions of the assessee without considering the reply of the revenue. - Matter needs reconsideration - matter remanded back. - ITA No. 6341/Mum/2011 - - - Dated:- 30-4-2013 - Shri Rajendra Singh And Shri Vivek Varma,JJ. For the Applicant : Shri M. Subramanian For the Respondent : Shri Shekhar L. Gajbhiye ORDER Per Vivek Varma, JM:- The appeal is filed by the department, against the order of CIT(A) 29, Mumbai, dated 30.06.2011, wherein the following grounds have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authorities for non payment of dues by the seller. The ship was purchased in financial year 2005-06 and the assessee commenced its operation of ship breaking. The competent authority on receipt of certain information, arrested the ship, which was got cleared by the assessee and continued its activity. In this manner, the assessee was able to do the selling of broken up ship in financial years 2005-06 and 2006-07, relevant to the assessment years 2006-07 2007-08 and declared sales at Rs. 24,39,532/- and Rs. 54,29,446/- respectively in the two years. 5. Since the ship was arrested by the competent authority, the AO assumed that the ship was not in the possession of the assessee and the loans taken by the assessee were for the purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Cost of the ship as under: MV. Tonia V. (MT. 3224.000) Ship cost 49,823,865 Custom duty 2,960,419 L.C. commission 334,131 Beaching charges 410,800 Ship cost 53,529,215 Since the ship was arrested no cutting operation was done and value of the ship is stated in closing stock of 31.03.2006. Refer Annexure - III of the letter giving the profit and loss account for the year ending 2006. Ship was purchased by letter of credit L.C. Commission in charged as purchases. The amount payable to the party is shown as Sunday Creditors. Thus there were no loading of interest since ship was purchased against L. C. This is more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records are on the file and are available for making any judgments with regret mistake that the assessing officer did not care to look at records. The addition on account of the valuation of the closing stock of Rs. 41,36,468/- be deleted. 4.3 I have carefully considered the facts of the case, arguments of the Assessing Officer and the written submissions of the Authorized Representative of the appellant. The main crux of the Assessing Officers argument is that the interest expenses paid for the entire year has to be added to the closing stock proportionately. Such a view is not tenable for the following reasons. (a) The interest cost is for the entire year and it is not a direct expense as contemplated under section 145A. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the detailed reply of the assessee and its inability to procure further evidences/confirmations from two parties, i.e. Babulnath Alloys at Rs. 17,00,000/- and Jasmine Plastics at Rs. 4,50,000/-, deleted the balance addition made of Rs. 48,73,934/- u/s 68. 12. The department being aggrieved by the order, is now before the ITAT. 13. Before us, the DR submitted that the order of the AO was correct on both the issues and the AR stood by the order of the CIT(A). 14. We have heard the arguments of both the sides and we have perused the orders and the material placed on record. 15. It is without a doubt that the accounts of the assessee shows that the investment on ship was made in financial year 2005-06 and the assessee was conducting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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