AI Drafter 
TaxTMI 
TaxTMI 
2016 (10) TMI 1243
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.... (i) That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting the addition on undervaluation of closing stock for Rs. 8,73,46,711/- without considering the fact that the assessee has never claimed the value of stock of gold for the F. Yr. 2004-05, 2005-06 in the valuation of closing stock for the A. Yr. 2009-10 during the course of assessment proceedings for the A. Yr. 2009-10. But the same was claimed in the course of Assessment proceedings for the A. Yr. 2011-12 in the valuation of closing stock. This discrepancy is of a very serious nature and contradicts the claim made by the assessee that it has consistently followed the UFO method of closing stock. (ii) That on the facts and in the circum....
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....0,822.00 Emerald 4498.475 ct. 1,966,376.00 Pearls 8039.979 grams 606,345.00 Blue Sapphire 3190.980 ct. 546,735.00 Multi Sapphire 3340.580 ct 291,518.00 Semi Precious 11372.620 278,995.00 Imitation Stone 5086.449 ct. 202,795.00 Total 142,624,442.00 5. Basing on above information as provided by the Assessee, the AO summarized the valuation of stock as under: Total value of stone & other items Rs. 7,69,29,855/- Add: Gold Value Rs. 6,56,94,587/- Total value of stock Rs.14,26,24,442/ Total Gold stock in terms of pure Gold 107167.19 grams Less : Gold deposit as claimed by the Assessee 39083.07 grams Net gold stock in terms of pure gold ....
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.... provide sufficient evidence and proof regarding as to how the rates for F.Y's 2004-05, 200506 and 2006-07 were derived by the assessee. In the absence of any documentary proof it is not possible to accept the rates pertaining to F.Y's 2004-05, 2005-06 and 2006-07 as claimed by the assessee. Further, it is seen during the course of assessment proceeding for the A.Yr. 2009-10 the assessee has claimed the value of closing stock comprising only of closing stock of rate of F.Y.- 2006-07 and F.Y.- 2007-08 and not of F.Y. - 2004-05 and 2005-06. The same was duly reflected in para no. 11 of assessment order u/s.143(3) dated 27/12/2011, the same is reproduced as below. The scanned copy of the relevant page of the assessment order as well a....
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....-02-2013 for A.Y.2009-10. 12. Having aggrieved by the order of CIT-A, the Revenue before this Tribunal by raising aforementioned grounds. The Ld. DR relied on the order of AO. 13. At the time of hearing, the Ld.AR submits that the appellant Revenue challenged the order of CIT-A passed for A.Y 2009-10 before this Tribunal and submitted that the Tribunal upheld the order of CIT-A. 14. Heard rival submissions and perused the material evidence on record. We find that the observation of the Coordinate Bench that the AO did not give any justifiable reason for rejection of LIFO method which has been followed consistently by the Assessee and which method the Revenue has been accepting for earlier years. The relevant portion of which is rep....
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....cost of inventories. The explanation of the assessee in this regard was that the opening stock of 31950 gms was valued at Rs. 482/- per gram and similar value be adopted to work out the value of closing stock. It as further explained that the said jewellery being old conventional jewellery was not sold during the year and was available at the close of the year. The balance stock was out of the purchases made during the year less sales made by the assessee. The Assessing Officer while re-computing the value of stock has accepted the weights in grams of stocks but had only revalued the stock by adopting a figure higher than rate disclosed by the assessee. We find no merit in the said addition being made by the Assessing Officer where the valu....
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....Court in the case of Chainrup Sampat Ram vs CIT reported in 24 ITR 481 (SC) in support of this proposition. 7.4. We find that the assessee has been consistently following LIFO method of accounting for valuation of its closing stock of gold which has been accepted by the department in the earlier years even in scrutiny assessment proceedings of the assessee. Then there is no justifiable reason to reject the same method during the year under appeal. In this regard, we place reliance on the decision of the Hon'ble Apex Court in the case of United Commercial Bank vs CIT reported in 240 ITR 355 (SC) wherein the principles were laid down for valuation of assets at page 366. We find that the following decisions also support the case of th....