2012 (8) TMI 772

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....ome Tax Appeal No.1050/PN/2007. 2) Being aggrieved the respondent has formulated the following questions of law for the consideration of this Court. i) Whether the ITAT is correct in law and on facts in deleting the addition of Rs.21,46,479/- on account of provision during the A.Y. 2003-04 included in accumulated provision of Rs.69,98,363/- without appreciating the fact that the assessee failed to discharge the burden of proof cast upon it to prove that the actual market value of such stock has gone down by Rs.21,46,479/- as compared to its cost of acquisition during the relevant assessment year?   ii) Whether the ITAT is correct in law and on facts in deleting the addition of Rs.21,46,479/- included in accumulated provision o....

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....composition of the inks deteriorate due to the storage and passage of time. Consequently, the quality as well as the effective life of the chemicals gets eroded resulting in reduction of value. However, the Assessing officer did not accept the respondent-assessee's explanation and disallowed the deduction of Rs.69.98 lacs claimed by the assessee-company on account of non moving/slow moving stock. 4) In appeal, the Commissioner of Income Tax (Appeals) by an order dated 26/4/2007 allowed the respondent-assessee's appeal. In the order, it was held that the respondent was valuing its stock at cost or market value whichever was lower. The provision of Rs. 69.98 lacs on account of non moving/slow moving stock was an accumulated provision for t....