Non - Maintenance of Stock Register by Retailor

[BAL KRISHAN GARG]

Dear All Members , I have a query regarding non - maintenance of stock register by a Retailor .

I have qualify the audit report that the assessee does not maintain stock register so it is not possible to give the quantitative details of the same . The assessee is the retailor and dealing in electrical and consumable goods ranging from Rs. 1 to Rs .5,000 /- and running a retail counter and its not possible to maintain the stock register for the assessee also . Assessee does valuation of its closing stock as on the last day of the financial year by taking physical inventory and convert the same into closing stock for the balance sheet purpose and value each item by multipling the quantity with its purchase price after deducting discount and vat .

The officer wants to add the opening stock as income only on the ground that the auditor had made qualifiy the report and silent regarding closing stock . Whether the officer can do so even after giving the list of physical inventory taken alongwith purchase invoices for valuation purpose already submitted with the department ?

I will be highly oblidge for the reply or suggestion .

Thanks

Regards

BAL KRISHAN GARG

AI Summary

Retailer Challenges Audit Report Due to Lack of Stock Register; Considers AS 2 for Inventory Valuation Solution A retail business owner dealing in electrical and consumable goods has raised a concern about not maintaining a stock register, which prevents providing quantitative details in the audit report. The retailer values closing stock by taking a physical inventory at the financial year's end and calculates the value by multiplying quantity with purchase price, adjusted for discounts and VAT. The tax officer intends to add the opening stock as income due to the audit report's qualification. A response suggests referring to AS 2 on Inventory Valuation, which allows the retail method for valuation, potentially resolving the issue.