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TMI Blog2019 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... r and any adjustment in the closing stock for the year no. 1 would consequently result in the adjustment to the opening stock of year No. 2. Further, we noted that the assessee has filed complete details of valuation of closing stock in its paper book along with statements showing details of subsequent sales with regard to the items of closing stock which were revalued to net reliable value along with sample copies of invoices with respect of subsequent sales. From those details it is clear that net reasonable value adoptable by the assessee for the purpose of value of closing stock in certain cases is as per the prevailing accounting practices as accounting standards 2. Hence, we find that no infirmity in the order of CIT(A) and respectfully following the Tribunals decision for AY 2012-13, we confirm the order of CIT(A) and deleting the addition. Adjustment made while computing book profit under section 115JB to the closing stock - HELD THAT:- We find that this issue is answered in the first issue and the same finding will apply here also. Hence, we confirm the order of CIT(A) deleting the addition. Disallowance of provision for leave encashment under section 43B - HELD THAT:- Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Ld. CIT(A) was right in deleting the addition of ₹ 7,94,91,740/- by relying on the judgement in the case of Alfa Laval (India) Ltd, 295 ITR 451 is totally distinguishable on the facts and circumstances of the case, as in the said case, the issue was that the assessee had reduced the value at a fixed rate 10% from the cost in respect of its obsolete stock, which is not the cash in hand?" The assessee has raised the following two grounds: - "Corresponding adjustment to value of current year opening stock Without prejudice to the department's appeal, erred in not taking last year's closing stock as computed by the Assessing officer in AO order from AY 2012-13 of ₹1,33,46,22,303/- as opening stock for current year, as against the same, AO has taken opening stock as ₹1,27,29,66,467 i.e. without giving adjustment as proposed by AO in AY 2012-3; Consequential value should be taken as opening stock of next year Without prejudice to the department's appeal, erred in not appearing that if addition made by the AO with regard to the closing stock value of the current year, is sustained, as a natural consequence, opening stock of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on closing stock holding that the depreciation on the closing stock is not eligible deduction. Before the ld. CIT(A), the assessee given the breakup of depreciation on various inventory, demo-vehicles, accessories and consumable Auto Parts in the following manner: Sr. No. Description Cost NRV Cost/NRV whichever is lower A. Inventories/ Demo-vehicles - - - Sub-total 1,20,75,65762 1,15,19,43,005 1,15,19,43,005 B Accessories, Consumables and parts Sub-total 12,27,19,312 11,66,86,232 11,56,86,232 C Service Wip-TML - - - Sub-total 1,33,46,22,308 1,27,29,66,467 1,27,29,66,467 7. On the basis of aforesaid tabulation, the assessee explained that there is a difference of ₹616,55,838/- reported in the cost price and NRV. The Ld. CIT(A) accepted the contention of assessee holding that the assessee has not claimed the deprecation as conceived by Assessing Officer. It is a classification of closing stock both at the cost as well as NRV as per assessee's cost price or market price, whichever is lower which is correctly made by assessee. The Ld. CIT(A) also concluded that the Assessing Officer not appreciated the fact that it is not at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The next issue in this appeal of Revenue in ITA No. 5792/Mum/2018 for AY 2013-14 is as regards to the adjustment made while computing book profit under section 115JB of the Act to the closing stock. For this, Revenue has raised the following ground No.3: - "3. Whether on the facts and circumstances of the case, the Ld. CIT(A) was right in deleting the addition of ₹ 7,94,91,740/-being diminution in the value of closing stock in arriving at the book profit, without appreciating that diminution in the value of stock in trade is to be adjusted in view of Clause-I inserted in Explanation-1 to sub-section 2 of section 115JB?" 7. We find that this issue is answered in the first issue and the same finding will apply here also. Hence, we confirm the order of CIT(A) deleting the addition. 8. The only issue in the cross objection of the assessee in CO No. 205/Mum/2019 for AY 2013-14 is as regards to the order of CIT(A) confirming the disallowance of provision for leave encashment under section 43B of the Act. For this, assessee has raised the following ground No. 3:- "Disallowance for leave encashment under section 43B of the Act erred in confirming the disallowance made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guishable on the facts and circumstances of the case, as in the said case, the issue was that the assessee had reduced the value at a fixed rate 100/c from the cost in respect of its obsolete stock, which is not the cash in hand?". Assessee has raised the following grounds: - "Corresponding adjustment to value of current year opening stock Without prejudice to the department's appeal, erred in not taking last year's closing stock as computed by the Assessing officer in AO order from AY 2013-14 of ₹1,36,97,33,442/- as opening stock for current year, as against the same, AO has taken opening stock as ₹1,29,02,41,702 i.e. without giving adjustment as proposed by AO in AY 2013-14; Consequential value should be taken as opening stock of next year Without prejudice to the department's appeal, erred in not appearing that if addition made by the AO with regard to the closing stock value of the current year, is sustained, as a natural consequence, opening stock of next year i.e. on 1st April 2014 should be taken as same value as taken of closing stock as on 31st March 2014;" 11. The issue has already been adjudicated in AY 2013-14 in Para 2 to 5 of this order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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