2003 (4) TMI 617

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....aring the total income at Rs. 23,353. In the impugned assessment year, the assessee employed the method of valuation of closing stock, consistently adopted by it from assessment year 1965-66. Under this assessment, goods lying in the closing stock, which are less than one year were valued at cost; those lying in closing stock for a period of one to two years, were valued at cost less 25 per cent; goods lying in closing stock for a period between two to three years were valued at cost less 50 per cent, and those which were lying in stock for a period between three to four years, were valued at cost, less 75 per cent. Lastly, goods which were lying in stock for more than four years were valued at cost less 100 per cent. The assessee used to m....

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....bunal. In this case, as stated above, we are concerned with assessment year 1987-88. To complete the chronology, we may mention that even for assessment year 1988-89, the Assessing Officer once again accepted the method of valuation of closing stock adopted by the assessee and ultimately from assessment year 1990-91 all along, the assessee's method of valuation has been followed and accepted by the Department. In short, out of almost 45 years, the method of valuation of the assessee has been accepted by the Department for 43 years. Now, in the present case, we are concerned with assessment year 1987-88. The Assessing Officer passed an order and made an addition of Rs.3,61,500 on account of undervaluation of the closing stock by rejecting....

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.... number of years, then the same method should be continued. That, to interfere with the method of valuation after it was allowed to be followed for 43 years and particularly in this case, where we are concerned with 1987-88, would cause immense practical difficulties not only for the assessee but also for the Department, because if the contention of the Department was to be accepted, it would require rewriting of the opening stock for all these years, which would result in greater injustice to both the parties. In the alternative, he contended that in this matter, on facts, the method of valuation of closing stock followed by the assessee cannot be said to be unscientific or incorrect. That, the method followed by the assessee does indicate....

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....ts/ demerits of the method of valuation adopted by the assessee for three reasons. Firstly, we are confining our judgment to the fact of this case and it will not be cited as a precedent in any other matter. Secondly, on facts, it cannot be disputed that out of last 45 years, the assessee has been following this method for about 43 years to the knowledge of the Department. That, out of these 43 years also, the Department has accepted this method of valuation in large number of years and to accept the Department's contention at this stage and that too, for assessment year 1987-88 may result in practical difficulties, not only for the assessee, but also for the Department. The Department has not suggested any alternate method. However, if we ....