TaxTMI 
TaxTMI 
2016 (5) TMI 961
X X X X Extracts X X X X
X X X X Extracts X X X X
....and are disposed of by this common order for the sake of convenience and brevity. ITA No. 1050/Ahd/2012 Revenue's appeal in A.Y. 2009-10 3. The grievance of the revenue read as under:- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 5,58,22,466/- made u/s.68 of the Act even though the assessee had failed to explain the nature of source of credit of such profits. 2. The Ld.CIT(A) has erred in law and on facts in holding that the assessee was entitled to deduction u/s.80IB(4) even though it has been categorically analyzed in the body of assessment order that the assessee had not employed 10 or more workers in the year under consideration. 3. The Ld.CIT(A) has erred in law and on facts in deleting the add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....B(4) of the Act. 6. On scrutinizing the statement of accounts of the assessee, the A.O noticed that the assessee has shown closing stock at Rs. 11.26 crores. Assessee was asked to furnish the working for the calculation of closing stock valued at Rs. 11,26,21,568/-. Vide letter dated 26.12.2011, the assessee stated that the finished goods and WIP have been valued at net realizable value which is at Rs. 7.78 crores and after considering the cost of depreciation and interest the same is valued at Rs. 11.26 crores. The A.O did not accept the working of the assessee stating that the assessee itself has valued the closing stock at Rs. 7.78 crores which included cost of depreciation and interest. The A.O proceeded by computing the correct value ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 5,58,22,466/- and the total loss computed by him from the manufacturing activity at Rs. 2,09,44,864/-, and treated the difference of Rs. 3,48,77,602/- as unexplained cash credit u/s. 68 of the Act. 10. The A.O further withdrew the deduction of 80IB(4) on the amount of Excise Duty refund following the assessment of preceding assessment year. 11. Aggrieved by this assessment order, the assessee carried the matter before the ld. CIT(A) and reiterated its claim of deduction u/s. 80IB(4) of the Act. In so far as the valuation of closing stock is concerned, after considering the facts and the submissions, the ld. CIT(A) observed that the A.O has erroneously taken the figure of closing stock at Rs. 11,66,58,592/- instead of actual figure of Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0IB(4), if there were any positive profits and gains from the industrial undertaking. Since there is a net loss, there is no question of granting deduction u/s. 80IB(4) of the Act. 13. In so far as the applicability of the provisions of Section 80IA(8), 80IA(10) read with Section 80IB(13) are concerned, the ld. CIT(A) observed that these provisions are not applicable to the facts and issue involved in the present case. 14. The ld. CIT(A) observed that even if it is accepted that the assessee has inflated its profit by overvaluing the closing stock but this in itself does not disentitle, the assessee to claim the deduction u/s. 80IB(4) of the Act. Therefore, the additions made by the A.O on the basis of the overvaluation of closing stock d....