2012 (12) TMI 329

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.... claim of 50% discount in respect of valuation of stock on the second floor of the building of the appellant. The appellant submits that the stock was obsolete and got out of fashion and as such it was put up for sale at 50% discount. But while arriving the total stock value 100% amount has been considered. The appellant submits that therefore deduction should be allowed from the value of stock taken by the AO at Rs.66,61,760/-. 3. The learned counsel for the assessee submitted that some of the goods of the assessee had become obsolete and out of fashion, and therefore, these were put up for "sale" at 50% discount. He submitted that the department has valued the stock by taking its value at 100% and has not allowed any deduction on account....

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.... value with respect to the goods kept for sale at discount. He relied on the orders of the AO and the CIT(A). 4. We have considered rival submissions carefully and have perused the orders of the AO and the CIT(A) and also copies of various documents filed by the assessee in its compilation before us. We find that method of valuation of stock of the assessee is admittedly lower of "cost or market value" We find that survey action was taken at the premises of the assessee under Section 133A of the Act on 14.10.2003, and during the survey action, the value of stock was worked out at cost price. The department has made a suitable deduction on account of "Gross Profit" out of physical stock found at the time of survey at its sale price in orde....

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....ue", no further deduction for discount sale could be allowed to the assessee, and more so since the assessee has already been allowed deduction of "Gross Profit" out of sale price of the goods while valuing the physical stock found at the time of survey. In these view of the matter, we hold that there is no merit in the ground no.1 of the assessee's appeal, and accordingly the order of the CIT(A) on this issue is confirmed and the ground no.1 of the assessee's appeal is dismissed. 5. The ground no.2 of the assessee's appeal reads as under: "2. The ld.CIT(A) erred in rejecting the claim of the stock, which was received but the bills for which were not credited in the books of accounts, pending for accounting. In fact bills were there but i....

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....rs of the AO and the CIT(A). We find that the assessee has produced bills amounting to Rs.2,42,501/- and has claimed in its return of income before the department. Merely because there was delay in making the claim and the claim was not made at the time of survey itself or at the time of making statement of the partner of the assessee-firm, it could not be said that the facts should not have been verified by the AO and credit of the bills of Rs.2,42,501/- claimed to be available at the business premises of the assessee at the time of survey was not allowable. There is no material before us to suggest that any exercise to verify the genuineness of the bills of Rs.2,42,501/- was made by the AO at any stage of the assessment and no reason for ....