TaxTMI 
TaxTMI 
2026 (3) TMI 538
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....ed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2015-16. 2. The grounds of appeal raised by the Revenue are as under: i) "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 3,03,91,873/- without appreciating the findings of the AO that there was huge difference in the cost per unit of the opening stock and closing stock of assessee." ii) The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal." 3. The solitary grievance of the Revenue against the order of the Ld. CIT(A) pertains to the deletion of addition made ....
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.... to be 15227, sales made to be 1628, he found the assessee to have shown closing stock 15311 numbers. Based on the figures so reported, as per the AO the closing stock quantity was 28826 numbers and not 15311 shown by the assessee and accordingly found the assessee to have short reported quantity of stock by 13515 units. 7. Before the Ld.CIT(A) the assessee, we have noted explained the o discrepancy in the quantity of closing stock to have occurred due to typographical error of having mentioned the figure of opening stock again as stock manufactured during the year. He submitted the actual quantity of stock manufactured, duly supported with excise records, and demonstrated that there was no discrepancy in the closing stock reported by th....
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....so accepted, there is no discrepancy in closing stock and no impact on profit. Therefore, the addition made by the AO is held to be non sustainable and is hereby deleted." 8. The Ld.CIT(A), we find, has found as a matter of fact the reporting of units manufactured to be an incorrect and a typographical error of repeating the figure of opening stock of 15227 units against the units manufactured. He found the assessee to have supported his contention of having actually manufactured only 1712 units with documentary evidences, i.e. excise records, ledger of purchase of raw material etc. Accordingly, he rejected AO's finding of the assessee having more than the stock reported in its tax audit report. 9. The Ld.DR, except for relying on the....
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.... being undervalued, his order reveals that he found that despite the tax audit report revealing the opening and closing stock quantity to be almost the same, i.e. 15227 units and 15331 units respectively, yet he found a stark difference in the value of both, the opening stock value being Rs. 1.24 Crs. and the closing stock value being Rs. 28,50,755/-. 12. This we find the assessee had explained was on account of the closing stock being damaged due to rains and therefore being valued at their market value which was far reduced due to damage. The assessee had pointed out this method of valuation to be in accordance with accounting principles of valuing stock at cost or market price whichever is less. The assessee had also submitted evidenc....