AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1352
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....reinafter referred to as the "Act, 1961") has been filed by M/s Shri Ram Kutir Khandsari Udyog Pvt. Ltd. (hereinafter referred to as "Assessee") being aggrieved by order dated 10.07.2015 passed by Income Tax Appellate Tribunal, Lucknow Bench 'B', Lucknow (hereinafter referred to as the "Tribunal") in ITA No. 630/LKW/2014. The dispute relates to Assessment Year (hereinafter referred to as "A.Y.") 2010-11. Learned counsel for parties at the outset agreed that there are only two substantial questions of law which need be admitted in this appeal, read as under:- "(i) Whether on a true and correct application of the provisions of Section 145 the Tribunal was legally correct in upholding an addition of Rs. 63,05,208/- as had been....
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....hereinafter referred to as "CIT(A)"). CIT(A) allowed appeal by deleting addition of Rs. 63,05,208/- and also granting relief of Rs. 50,000/- in respect of addition of Rs. 1 lac towards transportation charges, etc. An appeal was filed by Revenue before Tribunal and Assessee preferred cross-objection. Tribunal while considering appeal of Revenue with regard to deletion of Rs. 63,05,208/- by CIT(A) accepted contention of Revenue that valuation of closing stock has to be made on the market price closing on 31.03.2010 and, hence set aside order of CIT(A) with respect to valuation of stock and restored order of A.O. However, with respect to deletion of Rs. 50,000/- in regard to transportation charges, etc., appeal of Revenue was not accepted. ....
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....O. while referring to judgment in Commissioner of Income Tax versus British Paints India Ltd. (supra) observed that valuation of stock should be done either at cost price or market price, whichever is lower, on the closing date which in the present case is 31.03.2010. In view thereof, he further observed that average price fetched to the Assessee between April, 2010 to August, 2010 will not be relevant for determining cost of closing stock as on 31.03.2010. He, thereafter, took the price of khandsari sugar received by Assessee as on 02.04.2010, i.e., Rs. 3060/- and on that basis, A.O. made valuation of closing stock which came to Rs. 63,05,208/-. CIT(A) while taking an otherwise view held that valuation of closing stock by Assessee, on t....
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....arn those receipts. In the second place, the account of profits & loss to be made up for the purpose of ascertaining that difference must be framed consistently with the ordinary principles of commercial accounting, so far as applicable and in conformity with the rules of the Act, 1961, or of that Act as modified by the provisions and schedules of the Acts regulating excess profits duty, as the case may be. For example, principles of commercial accounting require that in the profit and loss accounts of merchant's or manufacturer's business, the values of the stock- in-trade at the beginning and at the end of the period covered by the account should be entered at cost or market price, whichever is lower, although there is nothing abo....
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....ination of true income of Assessee. This is not only a right but a duty that is placed on the Officer, in terms of first proviso to Section 145 which concerns a correct and complete account but which, in the opinion of Officer does not disclose a true and proper income. 57. Profits of business could only be ascertained by comparison of assets and liabilities of the business at the opening and closing of the accounting year. The method that an Assessee adopts for closing is an integral part of accounting, within the meaning of section 145. There are different methods of valuation of closing stock. The popular system is cost or market, whichever is lower. However, adjustments may have to be made in the principle, having regard to the speci....