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2018 (7) TMI 875

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..... stand confirmed by us. The same works out to 1,19,730/-. Addition on account of valuation of closing stock - Held that:- Revenue is unable to controvert the fact that the assessee was consistently following the same method of accounting for valuing the closing stock. Further the difference in the valuation is arising only on account of the fact that Ld. AO has considered Total Saleable Area as against Total Constructed Area taken by assessee while arriving at the valuation. We are of the opinion that the cost is incurred vis-à-vis Total Constructed Area out of which Saleable Area may be less in view of the fact that some land is occupied / given free of cost by the assessee. One more aspect is the fact that any change in valuation of the c .....

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..... t of bogus purchases as against the addition of ₹ 40,00,753/- made by the AO without appreciating that the assessee has not produced any cogent evidence to substantiate the fact that it had taken actual delivery of goods purchased from this party and that the notices under 133(6) issued to the party from whom alleged bills were received were returned undelivered by the postal authorities with the remark 'not available at this address 'and this address' and the assessee has also failed to produced the party before the AO." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made by the AO overlooking the statement given by the party and explicit finding of the investiga .....

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..... enses were incurred in cash and the assessee could not produce the supporting vouchers. 2.2 The addition against closing stock was made since it was noticed that the assessee, while arriving at closing stock during impugned AY, reduced the cost of shops / offices given free to the tenants. The assessee, vide replies dated 03/03/2014 & 18/03/2014 put forth the computations and justification of the same, the relevant portion of which has been extracted by Ld. AO in paras 4.2.2 & 4.2.3 of the quantum assessment order. However, not convinced, Ld. AO opined that since certain area was given free of cost, the valuation should have been arrived at on the basis of Total Saleable Area as against Total Constructed Area as taken by the assessee. The .....

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..... herein the Hon'ble court have held that the closing stock should be valued at cost or net realization value whichever is lower, is found to be relevant in the facts and circumstances of the present case. Also since the assessee has been following the same method of valuing the closing stock, then naturally the opening stock has also been accordingly followed. In my considered opinion, the method adopted by the appellant is correct and no interference is called for. The ground of appeal is hereby allowed. Aggrieved, the revenue is in further appeal before us. 4. The Ld. DR, at the outset, submitted that the assessee contested the estimated addition of 8% without any success before this Tribunal vide ITA No. 4858/Mum/2015 dated 12/02/2018. .....

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..... account of valuation of closing stock is concerned, we find that the revenue is unable to controvert the fact that the assessee was consistently following the same method of accounting for valuing the closing stock. Further the difference in the valuation is arising only on account of the fact that Ld. AO has considered Total Saleable Area as against Total Constructed Area taken by assessee while arriving at the valuation. We are of the opinion that the cost is incurred vis-à-vis Total Constructed Area out of which Saleable Area may be less in view of the fact that some land is occupied / given free of cost by the assessee. One more aspect is the fact that any change in valuation of the closing stock would be tax neutral in nature i .....

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