M/s. Jindal Drilling Industries Ltd, New Delhi v. ACIT, New Delhi

ITA 1466/DEL/2009 | 2005-2006
Pronouncement Date: 31-03-2010 | Result: Allowed

Appeal Details

RSA Number 146620114 RSA 2009
Assessee PAN AAACJ0797L
Bench Delhi
Appeal Number ITA 1466/DEL/2009
Duration Of Justice 11 month(s) 15 day(s)
Appellant M/s. Jindal Drilling Industries Ltd, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 31-03-2010
Date Of Final Hearing 18-02-2010
Next Hearing Date 18-02-2010
Assessment Year 2005-2006
Appeal Filed On 15-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 1466/DEL/2009 ASSESSMENT YEAR : 2005-06 M/S. JINDAL DRILLING & INDUSTRIES LTD. SUIT NO. 101 70/B SHIVAJI MARG NEW DELHI VS. ADD. COMMISSIONER OF INCOME TAX RANGE 4 NEW DELHI PAN: AAACJ 0797 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN CA AND MS. RANO JAIN CA RESPONDENT BY : SHRI I.P.S. BINDRA SR. DR O R D E R PER: C.L. SETHI J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 30.01.2009 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN ASSESSMENT MADE U/S. 143(3) OF THE INCOME TAX ACT 1961 (THE ACT) DATED 31.12.2007 BY THE A O FOR THE A.Y. 2005- 06. 2. THE FIRST ISSUE RAISED IN THIS APPEAL IS AS UNDE R:- 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS. 60 25 742/- ON ACCOUNT OF SHORT TERM CAPITAL LOSS. ITA NO. 1466/DEL/2009 PAGE 2 OF 11 (II) THAT THE ABOVE SAID DISALLOWANCE HAS BEEN MADE BY TAKING RS. 1 12 129/- AS AGAINST RS. 61 37 871/- LOSS CLAIMED BY THE ASSESSEE. 3. BRIEFLY STATED THE RELEVANT FACTS LEADING TO TH E AFORESAID ISSUE MAY BE STATED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS SHOWN SHORT-TERM CAPITAL GAIN AT RS. 9 39 671/- WHICH AMOUNT HAS BEEN ARRIVED AT AFTER SETTING OFF OF SHO RT-TERM CAPITAL LOSS OF RS. 61 37 871/- INCURRED ON TRANSACTION RELATING TO TAT A GILT SECURITIES FUND. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS THERE OF. FROM THE DETAILS FILED BY THE ASSESSEE IT WAS REVEALED THAT A SUM OF RS. 1.25 CRORES WAS INVESTED ON 23.11.2004 TO PURCHASE 53116.996 UNITS. SUBSEQU ENTLY ON 01.03.2005 BONUS @ 1:1 WAS ISSUED AND THUS THE ASSESSEE ACQUI RED FURTHER 53116.90 UNITS BY WAY OF BONUS. THE ASSESSEE SOLD ORIGINAL HOLDING FOR RS. 63 62 129/-. THE ASSESSEE STATED BEFORE THE AO THA T SHORT-TERM CAPITAL LOSS WAS CALCULATED ON THE TRANSACTION OF SALE OF UNITS USING FIFO METHOD BUT THE PROFIT IN THE BOOKS WAS ARRIVED AT BY USING AVERAGE PRICE METHOD. THE ASSESSEE STATED THAT THE ORIGINAL UNITS ACQUIRED FO R 1.25 CRORES WAS SOLD FOR AN AMOUNT OF RS. 63 62 129/- AND THUS THE ASSESSEE HAS INCURRED LOSS OF RS. 61 37 871/- AND FOR THE PURPOSE OF ASSESSMENT THE LOSS WAS CLAIMED THOUGH IN THE BOOKS THE PRICE OF ACQUISITION WAS TAKEN AT AVERAGE PRICE OF ORIGINAL UNITS AND BONUS UNITS WORKED OUT AT RS. 62 50 000/- AND THUS THE PROFIT OF ITA NO. 1466/DEL/2009 PAGE 3 OF 11 RS. 1 12 129/- (RS. 63 62 129/- (-) RS. 62 50 000/- ) WAS SHOWN IN THE BOOKS OF ACCOUNTS. 4. THE AO STATED THAT THE ASSESSEE WAS NOT A TRADER IN SECURITIES NOR A SHARE BROKER. THE INVESTMENT IN THE SECURITIES WER E MADE AS INVESTMENT AND THE SECURITIES DID NOT FORM AS STOCK IN TRADE. THE AO SPREADED OVER THE COST OF ORIGINAL UNITS OVER THE ORIGINAL UNITS AND BONUS UNITS. THE AO THEREFORE STATED THAT THE METHOD OF FIFO COULD HAVE BEEN RES ORTED TO BY THE ASSESSEE IF THE INVESTMENT WERE HELD AS STOCK IN TRADE. THE AO THEREFORE DISALLOWED THE LOSS OF RS. 61 37 871/- AS AGAINST WHICH HE ASS ESSED THE INCOME BY TAKING THE PROFIT FROM THE TRANSACTION AT RS. 1 12 129/- AS SHORT-TERM CAPITAL GAIN ON THE TRANSACTION OF SALE OF UNITS OF TATA GI LT SECURITIES FUND. 5. ON AN APPEAL THE CIT(A) CONFIRMED THE AOS ACTI ON BY OBSERVING THAT WHERE BONUS SHARES ARE ISSUED AND SOME OF THE ORIGINAL SHARES ARE SOLD SUBSEQUENTLY THEIR ACTUAL COST HAS TO BE RECKONED ONLY ON THE BASIS OF AVERAGE VALUE. IN THIS CONNECTION THE CIT(A) HAD MADE A REFERENCE TO THE DECISION OF DELHI HIGH COURT IN THE CASE OF ESCORTS FARMS (RAMGARH) LTD. VS. CIT (1983) 143 ITR 749 THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ALEMBIC CHEMICAL WORKS COMPANY LTD VS. CIT (1962) 194 ITR 497 501 (GUJ.) DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS FARMS (RAMGARH) LTD. VS. CIT (1996) 222 ITR 509 52 2 AND IN THE CASE OF ITA NO. 1466/DEL/2009 PAGE 4 OF 11 CIT VS. DALMIA CEMENT CO. LTD. (1964) 52 ITR 567 (S C). THE CIT(A) THEREFORE UPHOLD THE FINDINGS OF THE AO THAT THE S HORT-TERM CAPITAL GAIN/LOSS HAS TO BE WORKED BY TAKING A DIFFERENCE BETWEEN FUL L CONSIDERATION OF THE SALE OF SHARE LESS THE VALUE AS ON THE DATE OF ACQU ISITION CALCULATED ON THE SPREAD OVER PRINCIPLE I.E. ACQUISITION OF ORIGINAL SHARE HAS TO BE DETERMINED ON THE BASIS OF AVERAGE COST OF ORIGINAL SHARES OVE R THE ORIGINAL SHARES AND THE BONUS SHARES. 6. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE DELIBERAT ED UPON THE POSITION OF LAW CONTAINED IN THAT BEHALF. 8. THERE IS NO DISPUTE IN SAYING THAT THE HONBLE S UPREME COURT IN THE CASE OF ESCORTS FARMS (RAMGARH) LTD. VS. CIT (SUPRA ) FOLLOWED ITS EARLIER DECISION IN THE CASE OF CIT VS. DALMIA CEMENTS CO. LTD. (SUPRA) AND HAD TAKEN A VIEW THAT THE CORRECT METHOD OF VALUING THE COST TO A PERSON OF BONUS SHARES ALLOTTED TO HIM IN CONSIDERATION OF HIS HOLD ING OF ORIGINAL SHARES IS TO SPREAD THE COST OF THE ORIGINAL SHARE OVER THE ORIG INAL AND BONUS SHARES COLLECTIVELY AND TO FIND OUT THE AVERAGE PRICE OF ALL THE SHARES AND THIS RULE APPLIES WHETHER THE ASSESSEE IS A DEALER OR INVESTO R. HOWEVER AN AMENDMENT WAS BROUGHT IN THE INCOME TAX ACT BY INSE RTING CLAUSE (AA) TO ITA NO. 1466/DEL/2009 PAGE 5 OF 11 SUB-SECTION (2) OF SECTION 55 OF THE ACT WHERE IT HAS BEEN PROVIDED THAT THE COST OF THE BONUS SHARES WILL BE TAKEN AS NIL FOR C OMPUTATION OF CAPITAL GAIN ON SALE OF BONUS SHARES AND THIS WOULD NOT AFFECT THE COST OF ORIGINAL SHARES. THIS PROCEDURE IS APPLICABLE TO SHARES OR SECURITIE S WITHIN THE MEANING OF CLAUSE (H) OF SECTION 2 OF THE SECURITIES CONTRACT (REGULATION) ACT 1956 WHICH HAVE BEEN REFERRED TO AS FINANCIAL ASSETS F OR THE PURPOSE OF SECTION 55(2)(AA) OF THE ACT. HENCE IN THE PRESENT CASE THE COST OF UNITS ORIGINALLY ACQUIRED WOULD BE THE AMOUNT OF PURCHASE OR COST PA ID BY THE ASSESSEE AT THE TIME WHEN THE SAME WERE ACQUIRED AND THE SAME WOULD NOT SPREADED OVER THE ORIGINAL UNITS AND THE BONUS UNITS. THE POSITI ON IN THIS RESPECT APPLICABLE FROM THE A.Y. 1996-97 IS THUS DIFFERENT FROM THE YEARS PRIOR TO THAT AND THUS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DALMIA CEMENT CO. LTD. (SUPRA) AND IN THE CASE OF ESCORTS FARMS (RAMGARH) LTD. VS. CIT (SUPRA) SHALL HAVE NO APPLICATION TO THE PR ESENT CASE WHICH IS COVERED BY THE PROVISIONS OF SECTION 55(2)(AA) INSE RTED FROM A.Y. 1996-97. WE THEREFORE HOLD THAT IN THE PRESENT CASE THE COST OF THE ORIGINAL 593116.996 UNITS SOLD BY THE ASSESSEE DURING THE YE AR UNDER CONSIDERATION SHALL BE TAKEN AT RS. 1.25 CRORES BEING THE COST O F ACQUISITION OF ORIGINAL 593116.996 UNITS AND THIS COST OF RS. 1.25 CRORES SHALL NOT BE SPREADED OVER THE ORIGINAL 593116.996 UNITS AND 593116.996 BONUS UNITS AND THE COST OF 593116.996 BONUS UNITS SHALL BE TAKEN AT NIL. BE I T STATED HERE AS AND WHEN ITA NO. 1466/DEL/2009 PAGE 6 OF 11 THE BONUS UNITS SHALL BE SOLD OR TRANSFERRED THE C OST THEREOF SHALL BE TAKEN AT NIL AS SO PROVIDED U/S. 55(2)(AA) OF THE ACT. 9. IN THE LIGHT OF THE VIEW WE HAVE TAKEN ABOVE WE THEREFORE HOLD THAT THE ASSESSEE HAD INCURRED A LOSS OF RS. 61 37 871/- I.E. DIFFERENCE BETWEEN SALE CONSIDERATION OF 593116.996 UNITS OF RS. 63 62 129/- AND THE COST OF ITS ACQUISITION OF RS. 1.25 CRORES. WE THEREFORE DIR ECT THE AO TO ALLOW THE ASSESSEES CLAIM OF LOSS ON SALE OF UNITS CLAIMED A T RS. 61 37 871/- AND MODIFY THE ASSESSMENT ORDER ACCORDINGLY. THUS THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 10. THE NEXT GROUND RAISED BY THE ASSESSEE IS DIREC TED AGAINST THE CIT(A)S ORDER IN CONFIRMING THE DISALLOWANCE OF RS . 25 85 942/- ON ACCOUNT OF UNUSABLE OLD RAW MATERIAL. 11. IT WAS NOTICED BY THE AO THAT IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS. 25 85 942/- UND ER THE HEAD LOSS OF UNUSABLE OLD RAW MATERIAL IN THE CATEGORY OF MATER IALS AND OPERATIONS CHARGES. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THIS LOSS RELATES TO STOCK OF C.S. PIPES WHICH HAD BECAME RUSTED AND USELESS AND OPENING STOCK OF RS. 60.74 LACS OF CS PIPES WAS THERE AT THE BEGINNING O F THE YEAR OUT OF WHICH SALE OF RS. 4 LACS WAS MADE DURING THE YEAR. THE B ALANCE STOCK WAS VALUED BY THE ASSESSEE AT RS. 30 88 188/- AND AFTER DEDUC TING THE SALE OF RS. 4 LACS ITA NO. 1466/DEL/2009 PAGE 7 OF 11 A LOSS OF RS. 25.86 LACS WAS CLAIMED ON ACCOUNT OF UNUSABLE RAW MATERIAL. BEFORE THE AO THE ASSESSEE HAD SUBMITTED A REPORT OF SHRI R.K. AGGARWAL GOVERNMENT REGISTERED VALUER WHO VALUED THE SCRAP AND FOUND IT TO BE USELESS AND ESTIMATED THEIR VALUE AT RS. 18 000/- P ER TONNE. THE VALUER DETERMINED THE VALUE THUS AT RS. 30 88 188/-. HOWE VER THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO BY OBSERVIN G THAT THE REPORT OF THE VALUER IS DATED 09.05.2005 I.E. SUBSEQUENT TO THE C LOSING OF THE FINANCIAL YEAR AND THAT THE ASSESSEE COULD NOT SUBSTANTIATE AS TO WHY SCRAP MATERIAL VALUED AT RS. 30 88 188/- COULD NOT BE SOLD AT THE PRICE MORE THAN THAT. THE AO ALSO OBSERVED THAT ACCEPT THE VALUERS REPORT N O OTHER DETAILS WERE FURNISHED BY THE ASSESSEE. CONSIDERING THE VALUER S REPORT AS ESTIMATED FIGURE THE AO DISALLOWED THE ASSESSEES CLAIM AND MADE THE ADDITION OF RS. 25 84 942/-. 12. ON AN APPEAL THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING AS UNDER: RIVAL CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CONSIDERING THE RIVAL SUBMISSIONS I FIND THAT THE APPELLANT COMPANY IS A BIG COMPANY HAVING THE ANNUAL TURN OVE R OF MORE THAN RS. 100 CRORES WHICH BY NORMAL PRACTICE OF BUS INESS MAY RESULT IN YIELDING SOME SCRAP OR UNUSABLE MATERIAL. THIS FEATURE IS AN ANNUAL FEATURE. HOWEVER I FIND THAT THE VALUATION OF SUCH UNUSABLE MATERIAL HAS NOT BEEN ADOPTED ON A NNUAL BASIS AS A CONTINUOUS ACCOUNTING PRACTICE. I FAIL TO UNDERSTAND THAT WHY THE UNUSABLE MATERIAL SHOULD BE VALUED IN A PARTICULAR YEAR WHICH IS A DEVIATION FROM THE ACCOUNTING PRACT ICE FOLLOWED ITA NO. 1466/DEL/2009 PAGE 8 OF 11 BY IT CONSISTENTLY. SUCH UNUSABLE MATERIAL IS IN FACT SALEABLE. THEREFORE WHENEVER THE SAME IS SOLD OUT THE CONSI DERATION OF THE SAME SHOULD HAVE BEEN CREDITED IN ITS SALE PROC EED. IF THE SAME IS DISCARDED THE SAME EFFECT SHOULD HAVE BEEN GIVEN IN ITS OPENING STOCK AND CLOSING STOCK. FURTHERMORE I AM OF THE VIEW THAT A LOSS OR GAIN CAN BE WORKED OUT ONLY WHEN THE RE IS A SALE OF A PARTICULAR MATERIAL AND NOT ON THE BASIS OF TH E VALUATION. ON THE BASIS OF THE VALUATION OF STOCK THE EFFECT CAN BE GIVEN ONLY IN ITS TRADING ACCOUNT BY SUBSTITUTING THE VAL UE OF THE CLOSING STOCK. SINCE THE METHOD OF COMPUTATION OF THE LOSS IN THE SAID TRANSACTION IS NOT IN CONFORMITY WITH THE ACCOUNTING PRACTICE FOLLOWED BY IT FOR LAST SEVERAL YEARS I U PHOLD THE FINDINGS OF THE ASSESSING OFFICER IN DISALLOWING TH E LOSS OF RS. 25 85 942/- CLAIMED BY IT WHICH IS MERELY A NOTIONA L LOSS AND NOT THE ACTUAL LOSS. THEREFORE THE APPELLANTS AP PEAL ON THIS GROUND ALSO STAND DISMISSED. 13. STILL AGGRIEVED THE ASSESSEE HAS RAISED THIS I SSUE IN THIS APPEAL BEFORE US. 14. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BEEN FOLLOWING METHOD OF VALUING THE CLOSING STOCK AT COST OR MARKET PRICE WHICHEVER IS LOWER. THE ASSESSEE GOT THE CLOSING S TOCK OF SCRAP PIPES VALUED FROM THE REGISTERED VALUER WHO VALUED THE SAME AT MARKET PRICE AND ACCORDINGLY THE ASSESSEE ADOPTED THE SAME AND DETE RMINED THE PROFIT OR LOSS AS THE CASE MAY BE ACCORDINGLY. HE FURTHER SUBMIT TED THAT THE GOODS IN QUESTION WERE FOUR YEARS OLD AND WERE VERY MUCH DET ERIORATED IN THE QUALITY. IT WAS FURTHER POINTED OUT BY THE LD. COUNSEL FOR T HE ASSESSEE THAT CLOSING STOCK OF SCRAP MATERIALS WERE SOLD SUBSEQUENTLY IN THE FOLLOWING YEAR AND THE PRICE MORE THAN THE PRICE AT WHICH IT WAS VALUE D COULD NOT REALIZED. HE ITA NO. 1466/DEL/2009 PAGE 9 OF 11 THEREFORE SUBMITTED THAT THE VALUE OF CLOSING STOC K ADOPTED BY THE ASSESSEE BY THE END OF THE YEAR IS SUPPORTED BY SALE OF THE SAME MATERIALS SOLD IN THE IMMEDIATE NEXT YEAR. 15. THE LD. DR ON THE OTHER HAND SUPPORTED THE OR DER OF THE AUTHORITIES BELOW TO CONTEND THAT THE AUTHORITIES BELOW WERE VE RY MUCH JUSTIFIED IN REJECTING THE ASSESSEES CLAIM OF LOSS ON ACCOUNT O F VALUATION OF CLOSING STOCK IN AS MUCH AS THE CLOSING STOCK VALUED BY THE ASSESSEE WAS NOT CORRECT HAVING REGARD TO THE METHOD OF ACCOUNTING REGULARLY AND CONSISTENTLY FOLLOWED BY THE ASSESSEE. 15. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 16. THE ASSESSEE HAD AN OPENING STOCK OF SEAMLESS P IPES WHICH WERE PURCHASED FOR UTILIZING THE SAME FOR MANUFACTURING PURPOSES IN EARLIER YEARS BUT COULD NOT BE UTILIZED. THIS HAS RESULTED IN TH E DEGRADATION IN QUALITY OF THE PIPES. THE PIPES WERE ULTIMATELY SOLD AS SCRAP IN THE F.Y. 2005-06 RELEVANT TO THE A.Y. 2006-07. THE ASSESSEE WAS FOL LOWING THE METHOD OF VALUING THE CLOSING STOCK AT COST OR MARKET PRICE WHICHEVER IS LOWER. TO DETERMINE THE MARKET VALUE AS AT THE END OF THE YEA R ENDED ON 31.03.2005 RELEVANT TO THE A.Y. 2005-06 THE ASSESSEE GOT THE MATERIALS VALUED BY REGISTERED VALUER WHO VALUED THE STOCK OF MATERIAL S AT RS. 30 88 188/- AS ITA NO. 1466/DEL/2009 PAGE 10 OF 11 AGAINST OPENING VALUE OF RS. 60 74 180/- LESS RS. 4 00 050/- SOLD DURING THE YEAR. THE ASSESSEE HAS PRODUCED THE SALE INVOICES O F THE PIPES SOLD DURING THE NEXT YEAR WHICH INDICATES THAT THE PIPES WERE S OLD SUBSEQUENTLY AT THE RATE OF RS. 18 000/- PER METRIC TON THE SAME RATE AT WHICH THE REGISTERED VALUER VALUED THE PIPES AS ON 31.03.2005. FROM THE DETAILS OF SALE OF PIPES SOLD SUBSEQUENTLY AND FROM THE REPORT OF THE REGIST ERED VALUER IT IS ESTABLISHED THAT THE REALIZABLE VALUE OF THE SEAMLE SS PIPES LYING IN STOCK WITH THE ASSESSEE WAS ONLY RS. 30 88 188/-. SINCE THE C LOSING STOCK WAS BEING VALUED AT COST OR NET REALIZABLE VALUE OR MARKET PR ICE WHICHEVER IS LOWER THE ASSESSEE WAS JUSTIFIED IN VALUING THE CLOSING STOCK AT MARKET RATE WHICH WAS DETERMINED BY THE VALUER AT RS. 30 88 188/-. THE A O HAS NO WHERE BROUGHT ANY MATERIAL ON RECORD TO SAY THAT THE REALIZABLE M ARKET PRICE OF THE CLOSING STOCK WAS MORE THAN THE AMOUNT AT WHICH THE ASSESSE E VALUED THE SAME. THE AO HAS REJECTED THE VALUERS REPORT MERELY BECAUSE IT WAS DATED 09.05.2005. HOWEVER IT IS PERTINENT TO NOTE THAT THE VALUER VA LUED THE VALUE OF CLOSING STOCK AS ON 31.03.2005 VIDE HIS REPORT DATED 09.05. 2005. THEREFORE REJECTING THE VALUERS REPORT ON THIS ACCOUNT BY TH E AO IS NOT FOUND TO BE JUSTIFIED. FURTHER IT IS ALSO PERTINENT TO NOTE T HAT IN THE SUBSEQUENT YEARS WHEN THE GOODS WERE SOLD AT RS. 30 88 188/- THE AO HAS NOT ADOPTED THE OPENING VALUE AT RS. 60 74 180/- AND ALLOWED THE LO SS IN THE NEXT YEAR. SINCE IN THE NEXT YEAR THE SALE VALUE HAS BEEN ACCEPTED AT RS. 30 88 188/- ITA NO. 1466/DEL/2009 PAGE 11 OF 11 ALONGWITH THE OPENING VALUE OF RS. 30 88 188/- THE QUESTION OF TAKING THE VALUE OF CLOSING STOCK AT RS. 60 74 180/- IN THE CU RRENT YEAR WOULD NOT ARISE. THEREFORE ON THIS COUNT THE LOSS DISALLOWED BY TH E AO IS OTHERWISE NOT JUSTIFIED. IN THIS VIEW OF THE MATTER WE THEREFO RE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE LOSS OF RS. 25 85 942/- ON ACCOUNT OF VALUATION OF UNUSABLE OLD SEAMLESS PIPES. WE ORDER ACCORDINGLY. 17. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 18. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 31 ST MARCH 2010. ( SHAMIM YAHYA) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 31 ST MARCH 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR