Prudent-Agri Commodities Indai Private Limited , New delhi ACIT Spl. Range-7, New Delhi

Last updated: 02 January 2021

Save Share

Quick Summary

This Income Tax Appellate Tribunal case involves Prudent-Agri Commodities India Private Limited appealing a disallowance of forward losses. The company had valued its closing stock for the 2013-14 assessment year based on Net Realisable Value (NRV) as per Accounting Standard 2, which resulted in a valuation lower than the cost price. The appeal focused on whether these forward losses, relating to the opening stock for the 2014-15 assessment year, should be allowed.

Court :
ITAT New Delhi

Brief :
Aggrieved by the order dated 21/12/2018 in appeal No. 324/17-18 passed by the learned Commissioner of Income Tax (Appeals)-XXV, New Delhi (“Ld. CIT(A)”) in the case of Prudent Agri Commodities India Private Limited (resultant company post-merger with the Sunder Agri CommoditiesIndia Private Limited), for the assessment year 2014-15, assessee preferred this appeal on 3 grounds. Ld. AR, however the time of arguments, gave up grounds No. 1 and 2 and confined the arguments to ground No. 3 in respect of the disallowance of forward losses basing on the closing stock for the assessment year 2013-14, which would be the opening stock for the assessment year 2014-15.

Citation :
ITA No.-1499/Del/2019

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘C’ NEW DELHI

BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT
&
SHRI K.N. CHARY, JUDICIAL MEMBER

ITA No.-1499/Del/2019
(Assessment Year:2014-15)

Prudent-Agri Commodities
India Private limited,
RNM Centre, 68/2, Janpath,
New Dlehi.
PAN No. AAGCP9228E
Appellant

Vs.

ACIT
Special Range-7,
C.R. Building, I.P. Estate,
New Delhi.
Respondent

Revenue by Sh. Gaurav Dudeja, Sr. DR
Assessee by Kanchan Kaushal, Adv.
Sh. Rishabh Malhotra, Adv.

Date of hearing: 30.12.2020
Date of Pronouncement : 30.12.2020

ORDER

PER K. NARASIMHA CHARY, JM

Aggrieved by the order dated 21/12/2018 in appeal No. 324/17-18 passed by the learned Commissioner of Income Tax (Appeals)-XXV, New Delhi (“Ld. CIT(A)”) in the case of Prudent Agri Commodities India Private Limited (resultant company post-merger with the Sunder Agri CommoditiesIndia Private Limited), for the assessment year 2014-15, assessee preferred this appeal on 3 grounds. Ld. AR, however the time of arguments, gave up grounds No. 1 and 2 and confined the arguments to ground No. 3 in respect of the disallowance of forward losses basing on the closing stock for the assessment year 2013-14, which would be the opening stock for the assessment year 2014-15.

2. Brief facts of the case are that the assesseeis a private limited company incorporated under the provisions of the Companies Act, 1956 and is mainly engaged in the trading of agricultural commodity i.e. cotton; that during the immediately preceding year i.e. AY 2013-14, the assessee has valued its closing stock based on Net Realizable Value (NRV), in accordance with the provisions, of Accounting Standards (AS) - 2 ‘Valuation of Inventories’ notified under section 211(3C) of Companies Act, 1956; and thatbased on the accounting policy mentioned above as followed by the assessee, the closing stock had been valued at a value of INR 909,339,489 which is lower than cost price of inventory amounting to INR 935,581,336.

To know more in details find the attachement file

FAQ :

The main issue was the disallowance of forward losses claimed by Prudent-Agri Commodities, based on the valuation of its opening stock for the assessment year 2014-15.

The case pertains to the assessment year 2014-15.

The assessee valued its closing stock for the assessment year 2013-14 based on Net Realisable Value (NRV), in accordance with Accounting Standard 2.

The Net Realisable Value (NRV) valuation of the closing stock was lower than the cost price.

The assessee initially filed 3 grounds of appeal but gave up grounds 1 and 2, confining arguments to ground 3 concerning the disallowance of forward losses.