2017 (11) TMI 462

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....amed following substantial question of law:- "Whether in the facts and circumstances of the case, the ITAT was justified in deleting the addition of Rs. 2,11,29,247/- as made by the Assessing Officer on account of under valuation of stock without appreciating the fact that the assessee could not identify the defective stock and could not justify its valuation at reduced rate. Whether in the facts and circumstances of the case, the ITAT was justified in law in treating 50% of stock as defective stock without any basis." 3. The facts of the case are that the assessee company engaged in business of manufacturing and trading of Marble, Slabs and Blocks. The AO while finalizing the assessment u/s 143(3) of the IT Act after c....

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....ear that reduction of the value of closing stock in the shadow of the defective is only adopted with the intention to reduce the tax liability. It is admitted fact that quantity and valuation of the different items of the closing stock have been maintained, as stated above without any basis, the valuations of the stock was reduced in the shadow of defective goods. Complete details of the expenses, mines units and other units have not been supported with the vouchers. The consumption details as required vide letter dt. 22.9.2011. I have not been filed in the requisite Proforma. The assesse has also not maintained the details of consumption of blade, segment, filing material, Store & spare and others. Therefore, the valuatio....