TaxTMI 
TaxTMI 
2022 (3) TMI 1138
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....t") relevant to the Assessment Year 2011-12. 2. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs. 2,28,68,440/- on account of under valuation of stock. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in restricting the addition on account of low GP to Rs. 3,00,000/- as against total G.P. addition of Rs. 36,34,633/- made by the A.O. 3. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 4. It is, therefore, prayed that the orde....
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....sed to hold that the value of DEPB increases the value of closing stock. The stock is valued at cost or market price whichever is less. If it is presumed that the market price vis-a-vis cost price is less due to the DEPB effect, then the stock has to be valued at market price and not cost price. Now, if this is done, then this finding is in favour of the appellant because the appellant has valued the stock at cost, which as per AO's logic, is higher than the market price. Therefore, there is no logic in the Finding of the AO. Secondly, one cannot randomly alter the valuation of closing stock, which is followed consistently year after year. The change in the valuation of closing stock, is only warranted when it is altered in ord....
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..... To this effect, no doubt has been raised by the AO. As per the AO the amount of DEPB should have been factored while valuing the closing stock. The DEPB is given to the parties who are engaged in the export business. It is the incentive that is given to the parties in order to promote the export activities. Therefore the exporters generally take into consideration such incentive while determining the sales price of the export product. 8.2 The Government is giving DEPB benefit to the parties so as to give them leverage to stand in the competitive international market. The DEPB has nothing to do with the cost of the closing stock. Accordingly to our understanding, the order passed by the AO is perverse. We also note that this Tribunal be....
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.... 13. In the result, all these appeals are accordingly dismissed. 8.3 It is the established practice that the closing stock of one year becomes the opening stock of the subsequent year. Accordingly if the AO increases the value of closing stock for the year under consideration then it is the duty to give the corresponding effect in the opening value of the closing stock. Thus there will not be any impact on the income declared by the assessee except the increase in the amount of income in one year and decrease in the amount of income in the subsequent year. On this reasoning as well, we are also not convinced with the findings of the AO. 8.4 In view of the above and after considering the fact in totality we are not inclined to ....
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....mation of profit of the appellant. The AO has not brought any comparative instance to hold that the appellant's GP was below industrial average. The AO has altered the book results without even rejecting the books of account and resorting to provisions of section 145 of the I T Act. Once when the books are accepted as such, then the book results also should have been accepted. No irregularity in purchase or sale was noticed during the assessment proceedings. It appears that, no efforts were also made to inquire on these issues. Therefore, in the absence of any specific instance, the estimation made by the AO is on arbitrary basis. So far as the finding of the AO that similar addition made in the preceding year got sustained in the ....