TMI Blog2014 (4) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... g/closing stock at average cost and fresh adjudication – Decided in favour of Assessee. - ITA No. 4940/Mum/2011 - - - Dated:- 11-4-2014 - Shri R. C. Sharma, AM And Dr. STM Pavalan, JM,JJ. For the Petitioner : Ms. Vasanti B. Patel For the Respondent : Mr. M. L. Perumal ORDER Per R. C. Sharma (A. M.) : This is an appeal filed by the assessee against the order of CIT(A), dated 21-1-2011 for the assessment year 2006-07, in the matter of order passed under Section 143(3) of the I.T. Act. 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in manufacturing and trading of garments. During the course of scrutiny assessment, the AO made addition by disregarding the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have considered rival contentions and found that the AO has added Rs.3,11,67,958/- towards the under Valuation of stock, being the difference between the net amount of increase in the value of Closing Stock Minus the Increase in the value of the Opening Stock. The A.O. on the issue of valuation of stock applied the cost price per unit which was sale price as reduced by Gross profit margin arrived at the figures of addition of Rs.3,11,67,958/-. 4. In appeal before the CIT(A), the assessee company represented that since the Gross margin on different category of products differ, it is not correct to value the stock by deducting the average margin from the per unit average sale prices of different categories of products to arrive at pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to value the stock by deducting the average gross profit margin from the per unit average sales prices of various categories of products to arrive at per unit manufacturing cost. From the record, we also found that in the assessment year 2007-08, the AO has framed assessment under Section 143(3), wherein the AO made the reworking where opening/closing stock valued by adopting the average rate and applied the average rate to the quantities of Stock valued by Co. at net realizable value. In appeal before the CIT(A), with regard to the ground taken for addition of Rs.3,17,72,533/- towards suppression of the value of stock, was withdrawn by the assessee by accepting the addition made by the AO. In the assessment year 2008-09, scrutiny assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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