STCL Ltd., Bangalore V. JCIT, Bangalore

ITA 1482/BANG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89864 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K GANESH RAO DATES OF CONCL
• Assessee Lawyers: SANJAY DAVE
• Keywords: Cost of acquisition
• Section: 143(3)

Judgement Text

I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE C BENCH, BANGALORE [CORAM: PRAMOD KUMAR AM AND VIJAY PAL RAO JM] I.T.A. NO . 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 STCL LIMITED . .APPELLANT 3 RD FLOOR, STC TRADE CENTRE NANDINI LAYOUT, BANGALORE 560 096[PAN : AACCS0205J ] VS. JOINT COMMISSIONER OF INCOME TAX CIRCLE 12(3), BANGALORE RESPONDENT APPEARANCES BY: SANJAY DAVE , FOR THE APPELLANT A K GANESH RAO , FOR THE RESPONDENT DATES OF CONCLUDING THE HEARING : APRIL 09, 2015. DATE OFPRONOUNCING THE ORDER : APRIL 09, 2015. ORDER PER PRAMOD KUMAR , AM : 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER DATED 2 ND AUGUST 2013 PASSED BY THE CIT(A) IN THE MATTER OF THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2009 - 10. 2. ALTHOUGH THE ASSESSEE HAS RAISED SEVEN VERY ELABORATE GROUNDS OF APPEAL, WHICH ARE MORE OF THE REASONS IN SUPPORT OF THE GRIEVANCE RATHER THAN THE GRIEVANCE ITSELF, THE ONLY ISSUE THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDITION OF RS 29.50 CRORES TO THE VALUE OF CLOSING STOCK AS DISCLOSED BY I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 2 OF 8 THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. LEARNED REPRESENTATIVES FAIRLY AGREE ON THIS. 3. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US A PUBLIC SECTOR UNDERTAKING, A SUBSIDIARY OF THE STATE TRADING CORPORATION OF INDIA LIMITED, AND IS ENGAGED IN THE BUSINESS OF TRADING IN VARIOUS SPICES, FERTILIZER S, AGRICULTURAL COMMODITIES AND ORES AND MINERALS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT, AS STATED IN NOTE OF 25 (I), THE REVISIONS HAVE BEEN MADE IN THE ACCOUNTS ORIGINALLY APPROVED BY THE BOARD OF DIRECTORS , INTER ALIA , TO THE EXTENT THAT THE CLOSING INVENTORY OF IRON ORE AS ON 31.2.2009 HAS BEEN REDUCED BY 29.50 CRORES AND CONSEQUENTLY REDUCTION IN PROFIT BEFORE TAX TO THE SAME EXTENT . THERE IS NO DISPUTE THAT THIS REDUCTION IN THE VALUE OF CLOSING STOCK WAS DONE, IN TERMS OF THE AUDIT REPORT BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA, IN RESPECT OF 2,27,576 MT IRON ORE WHICH WAS LYING AT VARIOUS PORTS STATED TO BE IN THE POSSESSION OF THE ASSESSEE, THAT THERE WAS A FALL IN THE MARKET PRICES OF THE I RON ORE AND THAT THIS REDUCTION IN VALUE REPRESENTED THE FALL IN VALUE OF IRON ORE IN RESPECT OF THE SUPPLIES FROM VENDORS. THE ASSESSING OFFICER NOTED THAT WHILE ALL ALONG THE ASSESSEE WAS DISCLOSING THE ADVANCES FOR PROCUREMENT OF IRON ORE UNDER LOANS AND ADVANCES , THE ASSESSEE WAS NOW SHOWING THE STOCK OF IRON ORE IN THE CLOSING STOCK FOR WHICH ADVANCES WERE MADE BY THE ASSESSEE. IN THE OPINION OF THE ASSESSING OFFICER, THIS SHIFT IN APPROACH CONSTITUTED DEVIATION FROM THE METHOD ACCOUNTING REGULA RLY FOLLOWED BY THE ASSESSEE, AND IT WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 145A WHICH, INTER ALIA , REQUIRED THAT THE PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSE OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS AND PROFESSION SHALL BE IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE . ON THIS BASIS, HE REJECTED THE CLAIM OF THE ASSESSEE WITH RESPECT TO THE FALL IN VALUE OF CLOSING STOCK AND ADDED BACK RS 29.50 C RORES TO THE INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) DID NOTE THAT THERE WAS A FAL IN VALUE OF THE CLOSING I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 3 OF 8 STOCK INASMUCH AS THE AVERAGE VALUE OF CLOSING STOCK OF I RON ORE WAS RS 2,912.98 PER MT, WHEREAS THE AVERAGE COST OF PURCHASES IN RESPECT OF THE SAME WAS RS 4,209.22 PER MT BUT SHE ALSO NOTED THAT IN THE SUBSEQUENT YEAR ALL THESE PURCHASES HAD TO BE REVERSED AS THIS PURCHASE IS ADMITTEDLY MIRED IN IRREGULARITIE S AND THAT THE ALLEGED FRAUD COMMITTED Y BUSINESS ASSOCIATES ( I.E. THE SUPPLIERS) THAT CAME TO THE LIGHT SUBSEQUENTLY. LEARNED CIT(A) WAS OF THE VIEW THAT THERE IS NO AUTHENTICATION OF THE IRON ORE VALUED AT RS 66,29,25,267 CLAIMED TO BE PURCHASES FOR FY 2008 - 09 (I.E. THE RELEVANT PREVIOUS YEAR) . SHE WAS OF THE VIEW THAT THE ISSUE IS NOT MERELY THAT OF THE VALUATION OF THE CLOSING STOCK AT NET REALIZABLE VALUE BUT THAT OF THE GENUINENESS OF STOCK OF IRON ORE CLAIMED AS PURCHASES . SHE ALSO NOTED THA T THE ASSESSEE IS NOT AT THE LIBERTY TO OFFER AN INCOME IN A YEAR OF HIS CHOICE, AND IN SUPPORT OF THIS PROPOSITION, REFERRED TO THE OBSERVATIONS MADE BY HON BLE SUPREME COURT, IN THE CASE OF CIT VS BRITISH INDIA PAINTS LTD (188 ITR 44), TO THE EFFECT THAT EACH YEAR BEING A SELF - CONTAINED UNIT, TAXES OF A PARTICULAR YEAR ARE PAYABLE WITH RESPECT TO INCOME OF THAT PARTICULAR YEAR AS COMPUTED TERMS OF THE ACT . ON THIS BASIS, SHE CONFIRMED THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER, AND DECLINED TO INTERFERE IN THE MATTER. THE ASSESSEE IS NOT SATISFIED WITH THE STAND SO TAKEN BY THE LEARNED CIT(A), AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT, AS THE CIT(A) HAS CATEGORICALLY OBSERVED, AT THE END OF THE FINANCIAL YEAR, AS PER THE AUDITED BOOKS OF ACCOUNTS, THE ASSESSEE HAS 2,27,576 MT OF UNSOLD IRON ORE WHICH WAS VALUED AT RS 95,79,17,24 0 AND THIS STOCK WAS LYING AT VARIOUS PORTS STATED TO BE IN THE CUSTODY OF THE APPELLANT . WE ALSO FIND THAT THERE IS NO DISPUTE ABOUT THE VALUE OF CLOSING I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 4 OF 8 STOCK WAS MUCH LESS THAN ITS PURCHASE PRICE, AS EVIDENT FROM THE CHART SET OUT AT PAGE 6 OF THE I MPUGNED ORDER WHICH IS REPRODUCED BELOW: VALUATION OF IRON ORE STOCK 31.3.2009 PARTY NAME QTYMT PURCHASE RATE PURCHASE COST CLOSING STOCK RATE CLOSING STOCK VALUE FUTURE METALS PVT LTD - KRISHNAPATNAM PORT 52,000 4,400 228,800,000 2,200 114,400,000 FUTURE METALS PVT LTD - VISAKHAPATNAM PORT 40,360 4,400 177,584,000 2,010.79 81,155,667 PRATHYUSHA ASSOCIATES - KAKANIDA PORT 14,000 4,400 61,600,000 4,400 154,000,000 S S EXPORTS - KRISHNAPATNAM PORT 40,000 3,850 154,000,000 3,850 154,000,000 DEVI MINERALS PVT LTD - PORT NOT SPECIFIED 81,216 4,136.29 335,933,240 3,100 251,769,600 TOTAL 227,576 4,209.22 957,917,240 2,912.98 662,925,267 6. WE HAVE ALSO NOTED THAT THE PRICES OF THE IRON ORE, AT THE RELEVANT POINT OF TIME, WERE QUITE VOLATILE. AS THE FOLLOWING PRESS REPORT, A COPY OF WHICH WAS FILED AT PAGE 4 OF THE COMPILATION OF PAPERS, SHOWS, THE PRICES OF IRON ORE HAD SUBSTANTIALLY FALLEN: DNA MONEY, 25 MARCH 2009 HTTP://WWW.DNAINDIA.COM/MONEY/REPORT - IRON - ORE - PRICES - AT - NOV - LOWS - 1242317 IRON ORE PRICES DOWN TO NOV LOWS OWING TO FALL IN DEMAND FROM CHINA SPOT PRICES OF IRON ORE HAVE FALLEN BACK TO THEIR NOVEMBER LOWS OF AROUND $64 PER TONNE OWING TO THE SLUMP IN DEMAND FROM CHINA. RE - STOCKING OF RAW MATERIAL BY CHINE STEELMAKERS HAD PUSHED UP IRON ORE PRICES TO AROUND $85 PER TONNE IN FEBRUARY. I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 5 OF 8 THE SPURT IN PRICES WAS DUE TO RE - STOCKING OF RAW MATERIAL BY THE CHINESE STEELMAKERS. THAT HAS STOPPED, AND PRICES AR E BACK TO LEVELS PREVAILING AROUND FOUR MONTHS AGO, AN ANALYST SAID. THE DROP IN IRON ORE RATES WILL HELP STEELMAKERS TO ENTER INTO NEW CONTRACTS AT LOWER RATES. AN OFFICIAL FROM A PRIVATE STEELMAKER WAS OPTIMISTIC AS MOST COMPANIES HAVE STILL IN NEGOTIA TIONS TO FINALISE LONG - TERM DEALS. GENERALLY, BY NOW THE CONTRACTS FOR THE COMING YEAR ARE IN PLACE. HOWEVER, DUE TO THE EXTREME VOLATILITY IN IRON ORE PRICES, NONE OF THE STEELMAKERS HAVE MANAGED TO SEAL DEALS. THE OFFICIAL SAID IRON ORE MINERS WERE TI LL RECENTLY SEEKING HIGHER LONG - TERM PRICES. BUT, OWING TO THE FRESH FALL IN PRICES, WE ARE AGAIN BACK TO NEGOTIATING PRICES IN THE RANGE OF $40 PER TONNE LEVELS. AN OFFICIAL FROM ANOTHER STEEL COMPANY ADDED, THE NEGOTIATIONS WERE HAPPENING AT AROUND $ 60 PER TONNE EARLIER, BUT DUE TO THE FALL (IN SPOT IRON ORE PRICES) WE ARE AGAIN PUSHING FOR LOWER RATES. AN ANALYST WITH A DOMESTIC RESEARCH FIRM SAID, IRON ORE CONTRACTS WILL BE SIGNED AT AROUND 50% BELOW LAST YEAR S PRICES. DOMESTIC STEELMAKERS HAD SIGNED CONTRACTS WITH MINERS AT $84 PER TONNE LAST YEAR. 7. A FINANCIAL TIMES REPORT ( HTTP://WWW.FT.COM/INTL/CMS/S/0/9147C06E - B8E6 - 11DE - 98EE - 00144FEAB49A.HTML#AXZZ3X4QN8PCR ) DESCRIBED THIS TREND, BY WAY OF A DIAGRAM, AS FOLLOWS: I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 6 OF 8 8. THE LOSS ON ACCOUNT OF PURCHASES OF IRON AND ORE WAS THUS CLEARLY STARING AT THE FACE OF THE ASSESSEE. WHAT WAS BOUGHT BY THE ASSESSEE HAD A MUCH LOWER MARKET PRICE AS ON THAT POINT OF TIME. THIS WAS A LOSS WHICH COULD BE QUANTIFIED WITH REASONABLE ACCURAC Y. THEREFORE, WHETHER OR NOT THE ORDERED IRON AND ORE, WHICH WAS ANYWAY STATED TO BE IN THE POSSESSION OF THE ASSESSEE AT VARIOUS PORTS, WAS INCLUDED IN THE CLOSING STOCK, IT WOULD NOT MAKE ANY DIFFERENCE. ANY ANTICIPATED LOSS, AS LONG AS IT CAN BE REASONA BLY QUANTIFIED, IS TO BE TAKEN INTO ACCOUNT IN THE COMPUTATION OF THE BUSINESS RESULTS OF THE YEAR IN WHICH IT HAS INCURRED. THE UNDERLYING PRINCIPLE FOR VALUATION OF CLOSING STOCK AT COST PRICE OR MARKET PRICE, WHICHEVER IS LESS, IS THAT, FOLLOWING THE P RINCIPLE OF CONSERVATISM - WHICH IS ONE OF THE FOUNDATIONAL PRINCIPLES OF ACCOUNTANCY, ANTICIPATED LOSSES ARE TO BE TAKEN INTO ACCOUNT WHILE COMPUTING THE BUSINESS RESULTS. IN THE LANDMARK CASE OF CHAINRUPSAMPATRAM VS CIT [ (1953) 24 ITR 281 (SC)), THIS PRI NCIPLE HAS BEEN EXPLAINED AS FOLLOWS: AS POINTED OUT IN PARAGRAPH 8 OF THE REPORT OF THE COMMITTEE ON FINANCIAL RISKS ATTACHING TO THE HOLDING OF TRADING STOCKS, 1919, 'AS THE ENTRY FOR STOCK WHICH APPEARS IN A TRADING ACCOUNT IS MERELY INTENDED TO CANCEL THE CHARGE FOR THE GOODS PURCHASED WHICH HAVE NOT BEEN SOLD, IT SHOULD NECESSARILY REPRESENT THE COST OF THE GOODS. IF IT IS MORE OR LESS THAN THE COST, THEN THE EFFECT IS TO STATE THE PROFIT ON THE GOODS WHICH ACTUALLY HAVE BEEN SOLD AT THE INCORRECT FIG URE......FROM THIS RIGID DOCTRINE ONE EXCEPTION IS VERY GENERALLY RECOGNISED ON PRUDENTIAL GROUNDS AND IS NOW FULLY SANCTIONED BY CUSTOM, VIZ., THE ADOPTION OF MARKET VALUE AT THE DATE OF MAKING UP ACCOUNTS, IF THAT VALUE IS LESS, THAN COST. IT IS OF COURS E AN ANTICIPATION OF THE LOSS THAT MAY BE MADE ON THOSE GOODS IN THE FOLLOWING YEAR, AND MAY EVEN HAVE THE EFFECT, IF PRICES RISE AGAIN, OF ATTRIBUTING TO THE FOLLOWING YEAR'S RESULTS A GREATER AMOUNT OF PROFIT THAN THE DIFFERENCE BETWEEN THE ACTUAL SALE P RICE AND THE ACTUAL COST PRICE OF THE GOODS IN QUESTION.' (EXTRACTED IN PARAGRAPH 281 OF THE REPORT OF THE COMMITTEE ON THE TAXATION OF TRADING PROFITS PRESENTED TO BRITISH PARLIAMENT IN APRIL, 1951). WHILE ANTICIPATED LOSS IS THUS TAKEN INTO ACCOUNT, ANTI CIPATED PROFIT IN THE SHAPE OF APPRECIATED VALUE OF THE CLOSING STOCK IS NOT BROUGHT INTO THE ACCOUNT, AS NO PRUDENT TRADER WOULD CARE TO SHOW INCREASED PROFIT BEFORE ITS ACTUAL REALISATION. THIS IS THE THEORY UNDERLYING THE RULE THAT THE CLOSING STOCK IS TO BE VALUED AT COST OR MARKET PRICE WHICHEVER IS THE LOWER, AND IT IS NOW GENERALLY ACCEPTED AS AN ESTABLISHED RULE OF COMMERCIAL PRACTICE AND ACCOUNTANCY. AS PROFITS FOR INCOME - TAX PURPOSES ARE TO BE COMPUTED IN CONFORMITY WITH THE ORDINARY PRINCIPLES OF COMMERCIAL ACCOUNTING, UNLESS OF COURSE, SUCH PRINCIPLES HAVE BEEN SUPERSEDED OR MODIFIED BY LEGISLATIVE ENACTMENTS, UNREALISED PROFITS IN THE SHAPE OF APPRECIATED VALUE OF GOODS REMAINING I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 7 OF 8 UNSOLD AT THE END OF AN ACCOUNTING YEAR AND CARRIED OVER TO THE FO LLOWING YEAR'S ACCOUNT IN A BUSINESS THAT IS CONTINUING ARE NOT BROUGHT INTO THE CHARGE AS A MATTER OF PRACTICE, THOUGH, AS ALREADY STATED, LOSS DUE TO A FALL IN PRICE BELOW COST IS ALLOWED EVEN IF SUCH LOSS HAS NOT BEEN ACTUALLY REALISED. AS TRULY OBSERVE D BY ONE OF THE LEARNED JUDGES IN WHIMSTER& CO. VS. IRC (1926) 12 TAX CASES 813, 827, 'UNDER THIS LAW (REVENUE LAW) THE PROFITS ARE THE PROFITS REALISED IN THE COURSE OF THE YEAR. WHAT SEEMS AN EXCEPTION IS RECOGNISED WHERE A TRADER PURCHASED AND STILL HOL DS GOODS OR STOCKS WHICH HAVE FALLEN IN VALUE. NO LOSS HAS BEEN REALISED. LOSS MAY NOT OCCUR. NEVERTHELESS, AT THE CLOSE OF THE YEAR HE IS PERMITTED TO TREAT THESE GOODS OR STOCKS AS OF THEIR MARKET VALUE.' 9. A LOT OF EMPHASIS HAS BEEN PLACED BY THE ASSESSING OFFICER ON THE QUESTION AS TO WHETHER THE INCLUSION OF IRON ORE IN TRANSIT, WHICH WAS LYING AT VARIOUS PORTS AND WAS STATED TO BE IN POSSESSION OF THE ASSESSEE, IN THE CLOSING STOCK WAS IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY FOLLOW ED BY THE ASSESSEE OR NOT. THAT ASPECT OF THE MATTER IS, HOWEVER, WHOLLY IMMATERIAL BECAUSE EVEN IF THIS STOCK WAS NOT TO BE INCLUDED IN THE CLOSING STOCK, THE LOSSES ON PURCHASE OF IRON ORE, WHICH WAS SO CLEARLY ANTICIPATED A LOSS AND WHICH COULD BE REASO NABLY QUANTIFIED, WAS ADMISSIBLE AS A DEDUCTION. WHEN A TRADER AGREES TO BUY A PRODUCT AT X VALUE AND THE MARKET PRICE AS ON THE TIME OF FINALIZING THE BOOKS OF ACCOUNTS IS MUCH LESS AT, SAY Y VALUE, THE LOSS REPRESENTED BY X - Y IS VERY MUCH AN ANTICIPATE D LOSS ON THE PURCHASE TRANSACTION AND IS ADMISSIBLE FOR DEDUCTION AS SUCH IN COMPUTATION OF BUSINESS PROFITS. BE THAT AS IT MAY, ONCE THE ASSESSEE IS IN CUSTODY OF THE IRON AND ORE AT THE VARIOUS PORTS, THERE CANNOT BE ANY GOOD REASON NOT TO INCLUDE IT IS IN THE CLOSING STOCK. THERE IS NO DISPUTE THAT THE ASSESSEE HAD PLACED ORDER FOR THESE GOODS AND THE PRICES AT WHICH THE ORDER WAS PLACED IS ALSO NOT IN DISPUTE. WHETHER THE GOODS ORDERED BY THE ASSESSEE HAVE BEEN RECEIVED BY THE ASSESSEE OR NOT IS A MATT ER OF FACT, AND THE INCLUSION OF GOODS SO RECEIVED IN THE CLOSING STOCK IS ONLY A NATURAL COROLLARY OF THE GOODS HAVING BEEN RECEIVED BY THE ASSESSEE. THERE IS NO CHANGE IN THE METHOD OF VALUATION OF CLOSING STOCK AS IT WAS ALWAYS VALUED AT THE COST PRICE OR MARKET PRICE - WHICHEVER IS LESS. WE ARE UNABLE TO SEE ANY LEGALLY SUSTAINABLE MERITS IN THE OBJECTIONS RAISED BY THE ASSESSEE. 10. LEARNED CIT(A) HAS, IN HER IMPUGNED ORDER, RAISED DOUBTS ABOUT GENUINENESS OF THE PURCHASES ITSELF BY QUESTIONING THE R EVERSAL OF ENTRIES IN THE SUBSEQUENT YEAR. WE CANNOT, AT THIS STAGE, SIT IN JUDGMENT OVER CORRECTNESS OF OR I.T.A. NO. 1482/BANG/13 ASSESSMENT YEAR: 2009 - 10 PAGE 8 OF 8 IMPACT OF THE ACCOUNTING ENTRIES IN THE SUBSEQUENT YEARS. ON THE CONTRARY, WHEN ASSESSEE HAS OFFERED THIS AMOUNT OF RS 29.50 CRORES TO TAX IN SUBSEQ UENT YEAR, FOR WHATEVER REASONS OTHER THAN INCORRECTNESS OF THIS FALL IN VALUE OF STOCK, THIS ADDITION AMOUNTS TO DOUBLE ADDITION OF INCOME. ALL THAT IS MATERIAL FOR US IS WHETHER THE FALL IN VALUE OF STOCK TO THE TUNE OF RS 29.50 CRORES SHOULD HAVE BEEN ALLOWED AS A DEDUCTION IN THIS YEAR, I.E. ASSESSMENT YEAR 2009 - 10, OR NOT. WE ARE CONCERNED WITH THE ASSESSMENT YEAR 2009 - 10 ONLY AND, FOR THE DETAILED REASONS SET OUT ABOVE, IN OUR CONSIDERED VIEW THE REDUCTION IN THE VALUE OF CLOSING STOCK, PARTICULARLY IN THE LIGHT OF THE FALL IN THE VALUE OF IRON ORES - AS TABULATED IN PAGE 6 OF LEARNED CIT(A) S ORDER AND AS REPRODUCED BELOW PARAGRAPH 5 EARLIER IN THIS ORDER, WAS QUITE JUSTIFIED. WE HOLD SO. IN ANY CASE, THE ASSESSING OFFICER HAS MADE ADJUSTMENT ONLY FOR THE VALUE OF CLOSING STOCK BUT ONCE THE PURCHASES ARE ACCEPTED BY THE ASSESSING OFFICER AND ARE DULY ACCOUNTED FOR IN THIS PARTICULAR YEAR, THERE CANNOT BE ANY GOOD REASON TO DECLINE LOSS IN FALL IN VALUE OF STOCKS REPRESENTED BY THAT PURCHASES. IN THE LI GHT OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION OF RS 29.50 CRORES. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 11. IN THE RESUL T, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 9 TH DAY OF APRIL, 2015. S D/ - SD/ - VIJAY PAL RAO PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) BANGALORE , T HE 9 TH DAY OF APRIL , 2015. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) DIT - , (4) CIT(A ) (5) DR P - , (6 ) DEPARTMENTAL REPRESENTATIVE (7) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES, BANGALORE