2015 (4) TMI 839

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....f the closing stock as declared by the assessee which is not in accordance with the principles laid down under the provision of Section 145A(a) of the Income Tax Act?" 3. The facts reveal that the assessee, a Government of India Company, had claimed loss on account of certain slow moving items and had written off and debited certain amounts in the relevant assessment year in the Profit and Loss Account under the Head "General Expenses Schdule 11A". The Assessing Officer in the course of scrutiny was of the view that the amount claimed towards loss of nonmoving stores could not be so claimed in view of the fact that the assessee was believed to have changed its method of accounting in respect of stores and spares, inasmuch as it wrote off 9....

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....ffs claimed for slow moving items were justified in the facts of the case. The Revenue then came in appeal before the Income Tax Appellate Tribunal. The Tribunal, by a common order for the Assessment Years 200203, 2003-04 and 2004-05, held in favour of the assessee. 5. The Tribunal was of the view that the assessee had correctly claimed the write off. It relied upon the Tribunal's earlier view taken in the Assessment Year 2001-02 and decided the issue in favour of the assessee. While doing so, the Tribunal found that the assessee, a Government of India Company, was subject to audit by the Comptroller and Auditor General of India. The market value of the damaged goods was pegged at 5% and the valuation deducted by the assessee had been ....

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....ts. Having considered the facts and the questions proposed as substantial questions of law, we find that Section 145A of the Income Tax Act, 1961 reads as under: "145A. Notwithstanding anything to the contrary contained in section 145,- (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head "Profits and gains of business or profession" shall be- (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. ....