2017 (5) TMI 1597

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.... 2. This Court while admitting the appeal on 04.10.2016 has framed the following substantial questions of law: "(i) Whether the Tribunal was legally justified in deleting the addition of Rs. 1,07,38,198/- made on account of inventories written off specifically when neither any details were furnished by the company and nor there was any supporting evidence to justify and establish that the inventories were actually destroyed? (ii) Whether the Tribunal was legally justified in deleting the addition of Rs. 41,61,559/- made on account of travelling and conveyance expenses nor any supporting evidence was filed to justify the claim? (iii) Whether the Tribunal was legally justified in allowing deduction u/s 37 and dele....

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....liance is placed on following cases: J. C. I. T. Vs. ITC Ltd. 299 ITR (AT) 341(SB) (Cal.): CIT Vs. Alfa Leval (India) Ltd. 295 ITR 451 (SC): 8.9. In the present case, the assessee has actually written off the inventory of Rs. 91,83,353/- by identifying the damaged / obsolete items. This is also the regular practice of the assessee. In any case since stock are valued at cost or market price whichever is lower and these inventory has no value, the same is to be allowed to the assessee in view of the accounting principles and the ratio laid down by Hon'ble Supreme Court. CIT Vs. Hotline Teletube and Components Ltd. 175 Taxman 216 (Del.): Provision for diminution in value of stock is allowable as business loss. 8.10. In view of above, ....

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.... 17. From the same, it is noted that this company is incorporated on 29.11.2001 having registered office at Mumbai. Therefore, it is an Indian Co. as defined u/s 2(26) and is a company resident in India u/s 6(3). All payment made to this company towards advertisement charges is in Indian currency. Tax is deducted at source on such payment u/s 194C. Sec. 195 is applicable when payment is made to a non resident. Admittedly, payment to Group M Media India Pvt. Ltd. is a payment to resident and not a non resident. Therefore, section 195 is not attracted. The AO has not disputed the genuineness of the payment and therefore only because there is no agreement for the advertisement work with this company cannot be viewed adversely. Therefo....