2023 (6) TMI 1518

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....nt passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 28.12.2018 by the Assessing Officer, Ward 1(3), Delhi (hereinafter referred to as 'ld. AO'). 2. The ground Nos.1 and 2 raised by the assessee are challenging the confirmation of the addition by the ld. CIT(A) in respect of difference in valuation of closing stock in the sum of Rs. 27,64,859/-. 3. We have heard the rival submissions and perused the material available on record. The assessee is a company engaged in the business of purchase and sale of liquor. During the course of assessment proceedings, the assessee was asked to furnish the details of opening stock and closing stock with quantitative details together with its value. The method ....

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....aluation of closing stock alone at weighted average rate, but, had accepted the value at cost price in respect of opening stock. When the ld. AO resorts to disturb the method of valuation adopted by the assessee, he is expected to value both opening stock as well as the closing stock by applying the same method in order to avoid distortion in figures. In the instant case, as stated earlier, the assessee has been consistently following the method of valuation of stock at cost price based on FIFO method. There is absolutely no reason to take a divergent stand during the year by the ld. AO of disturbing the method thereof. It is not in dispute that the quantitative details submitted by the assessee in respect of opening stock, purchases, sales....

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.... the premises from the existing shop to the new premises on 03.09.2015. The assessee had entered into rent agreement in August 2015 for the said new premises and made payment of rent of Rs.23,20,000/- during the year under consideration. The ld. AO sought to disallow this rent payment on the ground that no business was carried on by the assessee from the said premises and that no sale of liquor had happened from the said premises during the year. The ld. AO also stated that the application form for shifting the retail vend of licence from existing premises to the new premises was made only on 26.07.2016 which falls in AY 2017-18. This disallowance made by the ld. AO was upheld by the ld. CIT(A). 7. Before us, the ld. AR submitted that th....

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....ises in AY 2017-18. Hence, it goes to prove that the business in the new premises was actually carried on by the assessee only from AY 2017-18 onwards and, accordingly, the rent paid thereon for AY 2017-18 has been duly allowed as deduction by the ld. AO while completing the scrutiny assessment for AY 2017-18 vide order u/s 143(3) dated 03.12.2019. But as far as AY 2016-17, i.e., the year under consideration is concerned, the assessee had not made an application in the prescribed format before the Excise Authorities for shifting of the licence. Hence, the ld. AO was duly justified in holding that the new premises was never utilized by the assessee for the purpose of its business during the year under consideration. Accordingly, we confirm t....