2015 (2) TMI 119

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....ent year 1989-90. The Revenue - appellant has raised the following substantial questions of law:         (i) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing deduction under Section 80M on gross amount of dividend received by the Assessee ignoring express provisions of Section 80AA of the Income Tax Act, 1961?        (ii) Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the order of the Commissioner of Income Tax (Appeals) in deleting the addition of Rs. 18,88,759/- made on account of Closing Stock of stores, spare parts and tools etc.? The res....

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.... further appeal before the Tribunal, the findings recorded by the Commissioner of Income Tax (Appeals) were maintained setting aside the addition made by the Assessing Officer under Section 80M of the Act and in respect of opening and closing stock. It was observed as under:                "11.3 We have carefully considered the rival submissions and have perused order of tax authorities. We have also seen the case law relied upon by learned counsel. We feel that the issue is covered in favour of the Assessee by the decision reported in 55 ITD 465 (supra). It is also observed that ld. CIT (A) has also relied on order of the Tribunal. Ld. DR has not controverted the said....

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.... Learned counsel for the Revenue relies upon the Hon'ble Supreme Court judgment in Commissioner of Income Tax Vs. British Paints India Ltd. 1991 (188) ITR 44 to contend that the accounting method required to be adopted by an assessee should disclose true picture of profits and gains and in the absence of such method, the Assessing Officer is entitled to adopt appropriate computation to determine true income. We find that the rule of thumb applied by the assessee to disclose the opening and closing stocks without any co-relation with the production or turnover cannot be sustained. The justification sought to be given by the assessee that the accounts are voluminous in respect of all other items, therefore, petty items have been ignored....