2021 (7) TMI 151

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....8. 2. We have heard the respective parties and perused the relevant materials available on record. 3. The issue involved in this particular case is relating to addition of Rs. 8,09,567/- on account of under valuation of closing stock of tea bags. The said addition was deleted by the Ld. CIT(A). Hence, the instant appeal before us. 4. The assessee is a wholesale dealers of tea bags whose assessment under Section 143(3) was completed upon assessing income at Rs. 6,52,300/-. Subsequently an order dated 27.03.2012 under Section 263 was issued directing the AO to call for the details of the tea purchase, tea sold, closing stock, the extent of damage and the manner of its quantification by the insurance authorities. The Ld. AR was furthe....

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....oborate such fact of heavy rains during that time by the assessee. The quality of damaged stock was very low and therefore, the same could not be sold as the plea taken by the assessee. It is relevant to mention that insurance claim of the damaged stock lodged with New India Insurance Company Ltd. settled in 2006-07 at an amount of Rs. 85,000/- as and the same was received towards settlement of claim from the New India Insurance Company in A.Y. 2006-07 the entire details whereof were duly placed before the authorities below along with the details of sales purchases and the closing stock for A.Y. 2007-08 including the damage stock of 7517 kg from A.Y. 2006-07. The said damage stock was sold on 02.11.2016 i.e. A.Y. 2017-18 @ Rs. 6 per kg to R....