TaxTMI 
TaxTMI 
2022 (6) TMI 223
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....e, purchase bills, most of sale bills, stock statement furnished to the bank and audit report filed by the assessee. 3. When the quality wise stock of Rice/Paddy is not maintained properly, then how it was possible to ascertain quantity of stock, quality wise at any point of time which further defies the very purpose of maintaining books of account especially in the case of this assessee who is dealing in different qualities of rice/paddy. 4. The Ld. CIT(A) has not put light on the fact that the quantum of opening stock of broken rice at 45725 qtls. seems disproportionate considering the fact that the production of broken rice in one year is only 7819 qtls. To add further, this ultimately affects the quantum of closing stock of broken rice. 5. The appellant craves leave to add, amend, modify or delete any or more ground(s) of appeal." 3. Brief fact of the case is that the Revenue agitated the grounds related and deleting all the additions of under valuation of closing stock amount of Rs. 4,23,32,795/- by the Ld. CIT(A). The assessee is a rice seller. The Ld. AO is aggrieved about the improper maintenance of stock register by the assessee-firm. As per t....
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....nclusion of the above discussion is that the assessee has under-valued its closing stock or to vary the narration it has adopted an imaginary figure of closing stock squarely with a view to minimizing its tax liability. It has claimed that it had consistently been following the same method of valuation of its closing stock but I wonder what method it has deployed. There is no pattern, no method, no coherence and only cut and paste of Bills of certain parties have been adopted for showing the valuation at the desired figure. The Stock Register in itself falsifies the whole of the claim of the assessee as regards the authenticity of its Closing stock. The assessee has no explanation as to how the quality of stock which remained with it at the close of the year was the same as purchased from the parties which have been shown in the Closing stock valuation. The other potent factor which belies the claim of the assessee is that the purchase bills which the assessee has adopted for its closing stock valuation carry no mention of the quality of Rice. No basis of the opening stock of quality-wise rice has been given. The scanned copy of the closing stock valuation furnished by the assessee....
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.... 322 of the paper book filed at this office which was submitted to the then JCIT while making the assessment under section 143(3) of the A.Y. 2011-12. It is very strange on how the valuation of opening stock can be challenged when the same has been accepted by the predecessor AO in the immediate preceding assessment year. The Closing stock of A.Y. 2011-12 is the opening stock of A.Y. 2012-13. When the closing stock of A.Y. 2011-12 has been accepted; the opening stock in that scenario cannot be rejected without any supporting evidence. Thus, the objection of the AO is dismissed and explanation of appellant is valid. Thus, the vary basis of not accepting the closing stock valuation is bad in law and the grounds of appeal are allowed. Further the AO has adopted the bank rate for the purpose of valuation of closing stock. The Bank rate in stock statements cannot be adopted for the purposes of valuation of closing stock. The Hon Tile ITAT Amritsar bench in the case of ITO Vs. S.M. Builder & Developers ITA No. 164/2014 held as under: "The above issue is squarely covered against the Revenue and in favour of the assessee by the consolidated order dated 26.03.2015 of the I....
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....ll.) (vi) Ashok Kumar vs. ITO, reported in 201 CTR 178 (J & K) (vii) CIT vs. Das Industries, reported in 303 ITR 199 (All.) (viii) CIT vs. Sri Padmavathi Cotton Mills, reported in 236 ITR 340 (Mad.) (ix) Jai Sharda Rice Mills. Vs. ITO reported in 36 TTD 254 (ITAT, Asr.) (x) CIT vs. Riddhi Steel and Tubes (P) Ltd. reported in 220 Taxman 148 (Guj.) (xi) CIT vs. Apcom Computers P. Ltd. reported in (2007) 292 ITR 630 (Mad.). 35. In the facts and circumstances, the arguments made by the Ld. DR in his written submissions and counter submissions cannot help the Revenue and accordingly, we find no infirmity in the order of the Ld. CIT(A) in the case of M/s. Ishar Infrastructure Developers (P) Ltd. in ITA No. 198(Asr)/2013 in the impugned year." Keeping in view the above discussion, we do not find any infirmity in the order of the Ld. CIT(A) and the same is upheld." Similarly, the same finds support from following judicial pronouncements: - CIT vs. M/s. Santosh Box Factory P. Ltd. (P & H HC) (Judgment attached) - CIT vs. Sheena Exports ITA No. 382 of 2011 (P & H HC) Thus, relying on t....