2014 (4) TMI 695

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..... During the course of scrutiny assessment, the AO made addition by disregarding the valuation of closing stock. However, the CIT(A) has further enhanced the assessment. Before the CIT(A) it was contended that assessee is in agreement for adopting the computation method as made by the AO in the assessment year 2007-08 with respect to valuation of stocks i.e. at average cost. Accordingly, the valuation of opening/closing stock was reworked out by the assesse for AY 2006-07 in the same manner as adopted by the department in the assessment order for A.Y.2007-08 and the details of the same were also filed before the CIT(A). It was requested to the CIT(A) to take the same on record and accept the revised and reworked computation of the valuation....

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....rom the per unit average sale prices of different categories of products to arrive at per unit manufacturing cost. The working, where opening/Closing Stock was valued by adopting the average rate and applying the average rate to the quantities of stock valued by co. at net realisable value, filed with AO. The working of the co. was accepted with the net addition of Rs.68,02,926/-. However, the CIT(A) did not give the benefit of increase in opening stock of A.Y.2006-07, which was worked out by the AO at "average cost" and enhanced the addition to Rs.6,14,64,078/-. 5. The contention of the learned AR was that the CIT(A) has enhanced the income without giving show cause notice of such enhancement. As per learned AR, for CIT(A)'s power of en....