TaxTMI 
TaxTMI 
2024 (7) TMI 1017
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....-A"), of not allowing deduction in respect of foreclosure charges of Rs 10,54,784 on account of non-deduction of Tax deduction at source ("TDS") under section 40(a)(ia) of the Act without appreciating the applicability of TDS based on nature of expense and by not appreciating the various facts of the case as per the details, explanation and documents provided by the assessee during the course of assessment/appellate proceedings, is against law and facts of the case. 3. That the appellant company craves leave to add, delete, modify, and amend any grounds of appeal before or at the time of hearing of appeal. 4. That above grounds of appeal is without prejudice to each other." 3. Brief facts of the case are that, the assessee filed return declaring total income at NIL by claiming current year loss at Rs. 10,75,89,514/-. The case of the assessee was selected for scrutiny through CASS and a notice u/s 143(2) of the Income Tax Act, 1961 ('Act' for short) was sent to the assessee. The Notice u/s 142(1) along with questionnaires were also sent to the assessee. The assessee participated in the assessment proceedings, through its representative. The assessment order came to be passed by....
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.... appellate proceedings, the assessee made elaborate submissions and referred various documents. After considering the submission of the assessee, the Ld. CIT(A) rejected the same in following manners:- 4.3.3 "I have considered the assessment order and the submissions of the appellant. I have also perused the details of the inventory given. No rationale has been given for both the quantity and value of the inventory written off. Following are some of the instances noted from details of Finished Goods as per Annexure B (Page 99 of paper book) [Annexure 1 to this order] and details of stock written off as per page 106 of the paper book [Annexure 2 to this order]: S. No; Name Details of Finished Goods Written off stock Rate Quantity Total Kg Rate Value 1. NIPAKLINGHDT-0025 32.07 4,600 184,322.00 50 43 2,125 2. NIPAKLINGHDT-0050 33.05. 2,600 106,742.78 500 44 21,750 3. NIPAKLING315-0050 63.00 1,700 120,700.00 50 139 6,950 4. NIPAKLING360-0030 65.53 900 ' 66,177.00 590 101 59,590 5. NIPAKLING360-0050 67.23 6,500 4,89,017.11 3,200 81 2,58,336 6. NIPAKLINGNN364S-0050 38.53 7,250 337,342.50 ....
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...., 2013, after return of the obsolete, damaged and expired stocks has been considered in the profit and loss statement in Note No. 21 of the audited financial statement which is reproduced as under:- Particulars Year Ended March 31, 2013 Year Ended March 31, 2012. Inventory at the beginning of the year 13,750,372 Finished Goods Traded Goods 18,467,341 Inventory at the end of the year 32,217,713 Finished Goods 33,409,557 13,750,372 Traded Goods (inclosing goods in transit) 19,034,981 18,467.341 52,444,538 32,217,713 Total (20,226,825) (32,217,713) 11. The financial statement prepared by the independent statutory auditor has also stated that 'the Company has written off traded goods inventory purchased from Nipa Chemicals Ltd. of Rs. 52,51,027/- as on 31st March, 2013 being obsolete/damaged and expire stock, which can be corroborated with the Note No. 39 to the Audited Financial Statement placed at Page No. 84 of the Paper Book. 12. It is the case of the assessee that the amount of obsolete inventory written off has been debited to the Profit and Loss Account which has been audited by the auditor. Thus, the aforesaid written o....
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....pany certifying that such inventory was not usable in future and was produced before AO and consequently claimed deduction for the obsolete inventory written off u/s 37(1) of the Act and relied upon the decision rendered by Hon'ble Bombay High Court in case of Alfa Laval India Ltd. vs. DCIT - 266 ITR 418 (Bom.), affirmed by the Hon'ble Supreme Court by judgment reported in 295 ITR 451. The ld. AR for the taxpayer also contended that the taxpayer has submitted audit report of an independent auditor prepared on the basis of physical verification and maintenance of inventory during assessment proceedings and further relied upon the decision rendered by coordinate Bench of the Tribunal in Gillette India Ltd. vs. ACIT - 66 taxmann.com 221. Ld. DR for the Revenue to repel the arguments addressed by the ld. AR for the taxpayer relied upon the orders of AO/DRP. 39. While deciding the identical issue, the Hon'ble Bombay High Court in case cited as Alfa Laval India Ltd. vs. DCIT (supra) held as under :- "Held, (i) that the duly certified auditor's report placed before the Assessing Officer clearly justified valuation of obsolete items at 10 per cent. of cost. There is no ....