Loss Due to Obsolescence of Stores & Spares in Inventory is Allowable Business Expenditure

Ms. Hindustan Newsprint Ltd. Vs ACIT (Kerala High Court)

In the present case, the Tribunal had permitted devaluation with respect to the items in which the committee had recommended 100% devaluation confining the actual devaluation to 80%. The Tribunal disallowed 20% of the claim finding it to be the scrap value of the devalued items. With respect to the other items, the committee had recommended only 50% devaluation. We have to notice that the committee was appointed by the Board of Directors and consisted of Senior Executives of the Company itself. It

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