TaxTMI 
TaxTMI 
2009 (1) TMI 241
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.... been dismissed and the order dated September 30, 2004, passed by the Commissioner of Income-tax (Appeals), Udaipur (in short "the CIT(A)" hereinafter), about the deductibility of obsolete stores along With its valuation has been confirmed. 2. The relevant facts in a nutshell are that the assessee is engaged in mining, processing and grinding of minerals. During the relevant assessment year, it claimed deduction of Rs. 68,59,108, as obsolete store written off under the head "Plant and machinery repairs" account. The deduction claimed was sought to be justified by the assessee on the basis of accounting standard issued by the Institute of Chartered Accountants of India with the approval/acceptance of the Central Board of Direct Taxes. After....
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....he value of stores inventory written down at 10 per cent. of the cost. Accordingly, the addition made by the Assessing Officer on account of obsolete stores written off was reduced from Rs. 68,59,108 to Rs. 3,61,005. 4. On further appeal by the Revenue, the learned Income-tax Appellate Tribunal relying upon a decision of the hon'ble Bombay High Court in the case of Alfa Laval India Limited v. Deputy CIT [2004] 266 ITR 418, held that the Commissioner of Income-tax (Appeals) was justified in valuing the stores at 10 per cent, of the cost. Consequently, the appeal preferred by the Revenue so also the cross-objection filed on behalf of the assessee have been dismissed by the learned Income-tax Appellate Tribunal by order dated November 23, 200....
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....ned Income-tax Appellate Tribunal has seriously erred in confirming an erroneous order passed by the Commissioner of Income-tax (Appeals). 7. Per contra, the learned counsel appearing on behalf of the respondent assessee submitted that the practice of writing down the inventories below cost to net realisable value is consistent with the view that the assets should not be carried in excess of amount to be realised from their sale or use. It is submitted that the assessee has valued its inventory which were entirely rusted, non-moving and unusable on account of its obsolescence/damage of deterioration at cost or realisation value, whichever is lower. It is further submitted by the learned counsel that the learned Income-tax Appellate Tribuna....