TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 256
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....e addition of Rs. 1,84,00,096/- on account of valuation of closing stock of sugar. The tribunal accepted the case of the assessee that there was no need to make any addition on account of valuation closing stock of sugar as it has correctly valued the closing stock of sugar at a lower rate, the stock being of levy sugar and not of free sale sugar which rate had been applied by the Assessing Authority while making the original assessment. The appeal was admitted on the following questions of law:- "(A) Whether on the facts and in the circumstances of the case, the learned ITAT is justified in deleting the addition of Rs. 1,84,00,096/- on account of valuation of closing stock of sugar as made by the Assessing Officer and confirmed by the C....
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....the same applying the rate of Rs. 1330.77 per qtls. However, the stock of levy free sugar was valued by the assessee @Rs. 1660/- for stock of 2003-04 lying in the stock, @Rs. 1600/- for stock of F.Y. 2004-05 lying in the stock and @Rs. 1740/- for stock of F.Y. 2005-06 lying in the stock. The average rate of Rs. 1760.95/- was applied by the assessee as shown by it in Schedule- 'J' enclosed with the Audit Report. Therefore, relying upon the order of the Hon'ble ITAT in the assessee's own case in ITA No. 531/Alld./1994 for the A.Y. 1990-91 the AO made addition on account of valuation of stock of levy sugar at the rates applied for valuation of levy free sugar i.e. Rs. 1,760.95. Further in appeal by the assessee Income Tax Trib....
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....cted to excise duty the record of manufacture is also maintained and verified by the Excise Authorities at different stages. Also, it is a matter of common knowledge and in the particular facts of the case it has been stated by the assessee from the very beginning before all authorities that out of total sugar manufactured by it, levy sugar had been apportioned and fixed quantity of sugar had been set apart to comply with the requirement of levy sugar supplied to the Government for Public Distribution System. Undisputedly, levy sugar price is considerably lower than free sale sugar price by about 40%. While assessee appears to have maintained and produced its books of accounts and certain other records before the Assessing Officer who did n....
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....96.00 towards alleged under valuation of closing stock of sugar valuing the same @ Rs. 1760.95 per Qtl. disregarding the valuation made by assessee bifurcating its year wise sugar stock valuation and valuation of Levy Sugar made by it. The assessee is consistently following while making valuation of closing stock of sugar as under (as certified by Tax Auditor in annexure attached to Tax auditor Report, copy enclosed). Free Sugar At Cost or Market Value which ever is lower Levy Sugar At Levy Rate fixed by Govt. (i) The valuation of closing stock of sugar held as on 31st March, 2006 showing season wise bifurcation of sugar held as given in schedule "L" attached to Balance Sheet (copy enclosed)  ....
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....tity of sugar manufactured-by way of free sale sugar. However, subsequently the requirement of levy sugar was enforced against the assessee and, therefore, the order of the tribunal for the assessment year 1990-91 is of no benefit to the revenue because in that year there was no stipulation on the assessee to supply levy sugar to the Government. It was, therefore, submitted by the assessee that the levy sugar that was lying in stock for the last three years namely financial year 2002-03, 2003-04 and 2004-05 was correctly valued at a lower price being that of levy sugar. It was further submitted that levy sugar could never be valued by applying the prices applicable to free sale sugar as that would give un-realistic and wrong results. It i....
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.... the order of tribunal has not been disputed and its correctness has not been doubted by the revenue. Thus it has been established that in the year in question i.e. assessment year 2006-07 the assessee was under an obligation to create stock of levy sugar which was duly certified by the Tax Auditor and according to those reports and certificates the assessee had available with it quantities of levy sugar for the year 2002-03, 2003-04 and 2004-05. This stock of levy sugar could then not have been valued at free sale sugar price in view of the fact that there was a legal obligation on the assessee to supply the such stock of sugar at the controlled levy price through the Public Distribution System. The fact that in earlier order closing sto....