TaxTMI 
TaxTMI 
2025 (10) TMI 464
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....ustified in deleting the addition made by the Assessing Officer of Rs. 36,00,07,180/- by enhancing the value of closing stock of inventory due to lack of supportive evidence, that was valued by the assessee at a figure lower than cost. 2. On facts and under circumstances of the case the LD. CIT(A) was not justified in deleting the addition made by the AO of Rs. 75,48,400/- for lower realization of sales and suppression of profit on sale of old stock during the year. 3. On facts and under circumstances of the case the LD. CIT(A) was not justified in deleting the addition made by the AO of Rs. 5,11,72,627/- on account of bad debts claim ignoring the fact that no supporting evidence or voucher were produced by the assessee to demonstrate that the amount written off as bad had been offered for income in the earlier years." 4. In ground no.1, the Department has challenged deleting of addition made by the AO of Rs. 36,00,79,180/- by enhancing the value of closing stock of inventory due to lack of supportive evidence, that was valued by the assessee at a figure lower than the cost. 5. Brief facts of the case are that the AO is being not satisfied with the reply of ....
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....gned order inter alia observing as under:- 4.3 The appellant company further submitted that it had subsequently sold part of its depreciated stock at a much lower price than cost. The appellant had submitted the above instances of subsequent sale to the Assessing Officer during the course of assessment proceedings as well. (copy of detail along with bills of subsequent sale are filed at page number 11-52 of the paper book submitted during the course of appellate proceedings). The appellant had submitted that these raw materials become unfit for use and had to be scrapped. The appellant further brought to my notice that the scrapped material had been sold to parties from whom payment has been received through bank and the valuation of rejected material had been cleared by Excise Authorities. The Excise Authorities have accepted the valuation of rejected material removed from the factory premises and also the parties to whom material has been sold are identifiable, have made payment for purchase of rejected/ scrap material through bank. 4.4 The appellant had been suffering from financial crisis and its sales drastically came down due to lack of working capital. It h....
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....the ld. Counsel for the assessee has submitted that they have filed insurance policy and no additional evidence was filed and that all the material evidences have been furnished before the AO but he failed to furnish any evidence regarding furnishing of such material evidences claimed to be filed before the AO, which was furnished before the Ld. CIT(A) during the course of appellate proceedings. He placed reliance on the order of the Ld. CIT(A). 9. Having heard both the parties, perusal of the record, impugned orders and case law cited before us, we find that the Ld. CIT(A) has observed that the assessee has submitted the details regarding the raw material that became unfit for use and had to be scrapped. He further stated that the assessee has brought to his notice that the scrap material had been sold to parties from whom payment has been received through bank and the valuation of rejected material had been cleared by the Excise Authorities. The Excise Authorities have accepted the valuation of rejected material removed from the factory premises and also the parties to whom material has been sold are identifiable, who made payment for purchase of rejected/scrap material throug....
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....uced as under:- 5.3 The appellant had sold its scrapped raw material at Rs. 17,84,013/- in support of which copies of bills and quantitative detail of sale was furnished at page 4-13 of the paper book submitted during the course of appellate proceedings. The stock inventory sold during the year for Rs. 17,84,013/- was brought forward at a value of Rs. 1,18,48,547/- as opening stock as per documents submitted before me. The Assessing Officer made addition of Rs. 75.48 lakhs for suppression of sales being 75% of difference in value at which the material had been brought forward as opening stock and actual sale realization made during the year ending 31.03.2013. The appellant had also submitted the copy of insurance policy cover note (for the period 26.04.2012 to 25.04.2013) for stock insurance for three locations during the year for which premises the stock was insured for total value of Rs. 50 crores for fire and burglary. The appellant had further submitted that it was not eligible for claiming any damages for erosion in the price of the stock inventory. 5.4 The Assessing Officer has not brought on record any material or evidence to justify the addition or any ins....
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....rd as discussed by the AO without either conducted any enquiry or calling for any remand report on the contentions made by the assessee before the ld. CIT(A) and the issues raised in the grounds of appeal during the course of appellate proceedings to justify its claim regarding valuation of low sale value of unused stock. Accordingly, this issue is restored back to the file of the Ld. CIT(A) to adjudicate the issue afresh after calling for report repot from the AO on granting due opportunity to both the sides as per mandate. 15. In ground no.3, the Department has challenged that the Ld. CIT(A) was not justified in deleting the addition made by the AO of Rs. 5,11,72,627/- on account of bad debts claim ignoring the fact that the no supporting evidence or voucher were produced by the assessee to demonstrate that the amount written off as bad had been offered for income in the earlier years. 16. Having heard both the sides on the issue of bad debts, we find that the assessee has brought on record the copies of ledger account of the parties for which the balance have been written off to demonstrate that the amount has earlier been offered for income. The ld. CIT(A) has observed th....