TaxTMI 
TaxTMI 
2024 (7) TMI 1017
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....Ld. Commissioner of Income Tax (Appeals)-6, New Delhi ("CIT-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 proceed....
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....admissible and was added back to the taxable income to the Assessee. 8. During the 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 1....
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.... 19,034,981 18,467,341 TOTAL (A+B+C+D) 87,900,142 69,058,122 10. Further, it is found that the effect of net inventories of the traded goods of Rs. 1,90,34,981/- as on 31st March, 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 ....
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....ed to comply with all material aspects with accounting standard notified u/s 211(3C) of the Companies (Accounting Standards) Rules, 2006 as amended and other relevant provisions of the Companies Act, 1956. The taxpayer also relied upon the supporting documents prepared by Senior Drilling Engineer of the company 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....