Case Law Details
Air India Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that loss on sale of unusable old/ obsolete inventory allowed as there is nothing on record to suggest that such inventories was part of the Fixed Assets of the appellant company and the appellant has claimed depreciation on such Inventories earlier.
Facts- The assessee claimed loss on sale of inventory. AO disallowed the said. On appeal before CIT(A), CIT(A) granted relief to the assessee. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- Considering that the Appellant is engaged in the business of areirgyitermational air transport of passengers and cargo and that many spare parts for maintenances of aircraft are otHES os mo to the particular type or model of the aircraft which have a expiry date, after which they are not to be tepairs and maintenance of aircraft, the claim of the appellant that during the year certain spares and parts included in “Inventory” were identified as old/ obsolete and not usable by the company and such obsolete/non-usable inventory was sold by the appellant company, cannot be denied in the absence of the any evidence to the contrary. There is nothing on record to suggest that such “INVENTORIES” which includes stores and spare parts and loose tools was part of the Fixed Assets of the appellant company and the appellant has claimed depreciation on such Inventories earlier.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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