TaxTMI 
TaxTMI 
2018 (4) TMI 1528
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.... Rs. 54,11,304/- on the ground that the appellant erred in taking international rate in valuation of closing inventory, purchased from MMTC-the channelized agency, instead of prevailing domestic rate at the year end. 3. The appellate crave leave to add, alter, modify or submit, resubmit afresh any or all the grounds of appeal or any supporting evidences or as may be required in connection with the grounds herein of appeal on or before hearing of the same." 3. The brief facts of the case are that the assessee company, engaged in the business of manufacturing, refining and trading in gold and silver, filed its return of income for A.Y. 2011-12 on 05.09.2011 declaring total loss of Rs. 32,56,62,070/-. The case has been selected for scrutiny and notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter "the Act") were issued. In response to the notices, the Authorised Representative of the assessee appeared from time to time and furnished details as called for. The assessment has been completed under Section 143(3) of the Act, on 26.03.2014 determining the total loss at Rs. 31,49,06,926, inter alia, making additions towards disallowance of bad debts ....
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.... been subjected to tax, which is the precondition for allowing bad debts claimed under Section 36(1) of the Act. In so far as valuation of closing stock is concerned the CIT(A) observed that the AO has considered the value of closing stock on the basis of cost or market rate whichever is less method by considering the cost of imports as per the books of account of the assessee whereas the assessee had determined the cost as on valuation date by adopting the methodology of billing by the supplies by taking GJEPC rate on which the applicable taxes and other cess have been added to arrive at the cost to compare the market rate which is not in accordance with the prescribed method for valuation of closing stock as per the Accounting Standard. The CIT(A) further observed that the cost per kg. of gold as per assessee's books of account works out to Rs. 2,08,385/- and the market value in the Indian local market is Rs. 21,18,000/- per kg. The assessee has adopted the cost per kg. at Rs. 20,81,859/- in respect of closing stock of gold imported through MMTC even though the cost works out to Rs. 21,08,385/-. Therefore the AO was right in rejecting the valuation of closing stock by the assesse....
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....he assessee that it has written off sundry balances appearing in the Balance Sheet under the head 'Loans and Advances' irrecoverable in cash or kind which are outstanding for more than six years and the chances of recovery of such advances is remote. The assessee further contended that it has written of sundry balances in its books of account as irrecoverable. Therefore the AO was incorrect in disallowing bad debts claimed when he has accepted the sundry balances written off appearing in credit side of the Balance Sheet. 7. We have heard both the parties and pursed the material available on record. It is an undisputed fact that the assessee has written off sundry balances appearing in debit as well as credit side of the Balance Sheet under various heads which are outstanding for more than six years. The AO has accepted the sundry balances appearing in the credit side of the Balance Sheet under the head 'Income from other Sources' as miscellaneous income. The AO has disputed the sundry balances appearing in the debit side of the Balance Sheet on the ground that the said write off is not in accordance with the provisions of Section 36(1)(vii) r.w.s. 36(2), as the assessee has fail....
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....efore, its valuation of closing stock is in accordance with the Accounting Standard issued for valuation of closing stock. 10. Having heard both the sides and considering the material on record we find that the assessee has adopted cost or market rate whichever is less method for valuing closing stock. Further, for valuation of imported gold it has considered the prevailing market rate available in the international market as on valuation date and then adopted that cost to determine the value of closing stock. For valuing the closing stock in respect of goods procured in domestic market it has followed cost or market rate in domestic market as on valuation date. There is no dispute in the method followed by the assessee for valuation of closing stock. The dispute is with regard to the prevailing market rate adopted by the assessee. Assessee has adopted two market rates for domestic as well as imported goods. The AO has considered the prevailing market rate in Indian market as on valuation date and then adopted cost to determine the cost or market rate whichever is less for valuing the closing stock. We find that there is no error in the method followed by the AO to determine the....