Case Law Details
Chirai Salt (India) Pvt. Ltd Vs D.C.I.T. (ITAT Ahmedabad)
Introduction: Chirai Salt (India) Pvt. Ltd found itself in a legal battle concerning the alleged undervaluation of stock. The dispute centered around the valuation of raw material and finished goods, leading to additions in the income of the company. This article provides a detailed examination of the case, analyzing the arguments, methods, and the ultimate success in having the additions deleted by ITAT Ahmedabad.
Detailed Analysis:
1. Nature of Dispute: The crux of the matter revolved around the addition to the income of Chirai Salt (India) Pvt. Ltd due to the alleged undervaluation of stock, specifically raw material and finished goods.
2. Undervaluation Percentage: The Revenue authorities claimed a marginal undervaluation of approximately 3% for raw material and 7 to 8% for finished goods. The entire exercise of adopting an average rate from a survey date was questioned.
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