2008 (8) TMI 192

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....ng stock by the assessee from FIFO method to average cost method was justified? (ii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in deleting the addition of Rs. 17,33,319 made on account of change in the method of valuation of closing stock?" 2. The undisputed facts of the case are that the assessee, i.e., H. P. State Civil Supplies Corporation prior to the assessment year 1992-93 was following the "first in first out" (FIFO) method for evaluating the costs of its inventories. In the assessment year in question, the assessee changed the system and started following the system of "average cost valuation". The Assessing Officer came to the conclusion that the assessee could....

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....l accepted the explanation of the assessee that it faced practical difficulty in segregating the stock because the stocks were kept in more than 250 different locations throughout the State of H. P. The appeal was allowed and now the Revenue has challenged this order in this appeal before this court. 4. Shri Vinay Kuthiala, learned counsel for the Revenue, has relied upon the judgment of the apex court in the Calcutta High Court in CIT v. National and Grindlays Bank Ltd. [1984] 145 ITR 457. In this case, the Calcutta High Court held that the change in the method of valuation of closing stocks if done bona fide and consistently followed in subsequent years cannot be disallowed. Shri Kuthiala also relied upon the judgments of the apex cour....