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2014 (5) TMI 267 - AT - Income TaxDeletion made - Undervaluation of closing stock – Held that:- The assessee has valued the stock at -weighted average cost in the current year and the same method was followed by assessee in earlier years and it was accepted by the Department while finalizing the assessment u/s. 143(3) - The assessee has also adopted the same method for arriving at the "cost of goods sold". The method of valuation is also in consonance with the IT. Act and the Accounting Standards prescribed by ICAI - No material has been brought on record by Revenue to controvert the facts - the AO has started to value the stock at close intervals of each month but finally that was not made the basis of addition - The AO has left that observation/calculation without drawing a conclusion however finalized the valuation on an ad-hoc basis - CIT (A) has rightly deleted the addition made to closing stock – Decided against Revenue. Rejection of books of accounts u/s 145(3) of the Act – Failure to include making charges in the value of closing stock – Held that:- CIT(A) had deleted the entire addition of Rs. 40 lacs made by the AO which also included the under valuation on account of non-inclusion of making charges which was surrendered and accepted by the assessee during the course of assessment proceedings - the addition can be sustained only with respect to the under valuation for making charges amounting to Rs. 3,31,266/- which was accepted by Assessee out of the total addition of Rs. 40 lacs which was deleted by CIT(A) – Decided partly in favour of Revenue.
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