IN THE HIGH COURT OF DELHI AT NEW DELHI 
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         ITA 734/2010  
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 CIT                                                             ..... 
 Appellant 
 Through       Ms.Suruchi Aggarwal, Adv. 
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 versus 
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 USHA AMPORHOUS METALS LTD                    ..... Respondent 
 Through 
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 CORAM: 
 HON?BLE THE CHIEF JUSTICE 
 HON'BLE MR. JUSTICE MADAN B. LOKUR 
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 O R D E R 
                      01.06.2010 
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 This is an appeal under Section 260-A of the Income Tax Act, 1961 (for 
 brevity ?the Act?) assailing the order passed by the Income Tax Appellate 
 Tribunal (for short ?the Tribunal?) in ITA No. 2879/Del/2008 pertaining to the 
 Assessment Year 2004-2005. 
 The Assessee was aggrieved by the order of assessment whereby the 
 Assessing Officer had initiated a penalty proceeding under Section 271(1)(c) of 
 the Act.  On an appeal being preferred, CIT (A) affirmed the said order.  The 
 two grounds for initiation of the penalty proceeding were that the assessee had 
 not treated scrap as raw material as it used to do on earlier years and that he 
 had not offered adequate explanation for the same. 
 ITA No. 734/2010                                                        page 1 
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 The Tribunal, as is discernible from the order impugned, had adverted to 
 the facts in detail and thereafter expressed the view that the assessee had 
 received the sanction from STPI and such sanction had also been sent to the 
 Deputy Commissioner of Customs and Excise; that specific permission had been 
 taken for the revaluation of the obsolete raw material and finished goods from 
 the government; the valuation of the obsolete goods had been done on the basis 
 of the recoverable market rates and the same had been authorized through the 
 Board of Directors and reflected in the note to the accounts; that the auditors 
 of the company have not given any adverse finding in respect of the said 
 revaluation; the schedule to the balance sheet had been specifically identified, 
 valued and certified by the management at the lower figure after the revaluation 
 and the removal of the obsolete stock; that the assessee had disclosed all 
 factual material for the purpose of its assessment in respect of revaluation of 
 the said raw material as well as the finished goods; that the assessee had 
 produced substantial evidence to substantiate its case in respect of the claim 
 of write off after revaluation of the closing stock of raw material and finished 
 goods; that explanation offered by the evidence was cogent and germane and the 
 same had not been rebutted   by   the  Assessing  Officer;  that  the 
 explanation  offered  by  the 
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 ITA No. 734/2010                                                        page 2 
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 assessee has not been treated to be unbelievable or incredulous and also has the 
 support from the books of accounts and hence there was no justification for 
 initiation of penalty proceeding. 
 In our considered opinion, the Tribunal has adverted to all the facets 
 and has recorded the findings against the Revenue.  Ms. Suruchi Aggarwal, 
 learned counsel for the Revenue has urged with immense vehemence that there is 
 perversity of approach by the Tribunal but on a scrutiny of the order of the 
 Tribunal and the analysis made, we do not perceive any perversity of approach. 
 Hence, the appeal preferred by the Revenue, being devoid of merit, stands 
 dismissed in limine. 
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 CHIEF JUSTICE 
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 JUNE 01, 2010                                          MADAN B. LOKUR, J 
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 ITA No. 734/2010                                                        page 3 
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