Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 1051 - HC - Income TaxWrong valuation of the closing stock - method of valuation of closing stock - return subsequently revised under section 139(5) - Held that:- The closing stock included rice, rice bran, phak, husk and bardana and the assessee revised the value of rice husk, rice bran and bardana. The assessee took a plea that since the valuation of certain finished goods was wrongly adopted at higher rates, their realizable value needed to be rectified. The assessee in the revised return filed under section 139(5) of the Act also had not depicted the true and correct value of the finished goods. Accordingly, the Assessing Officer assessed the income of the assessee at ₹ 9,38,600 by making an addition of ₹ 8,52,513. On appeal by the assessee, the Commissioner of Income-tax (Appeals) restricted the said addition of ₹ 8,52,513 to ₹ 14,344. On further appeal by the Revenue, the Tribunal sustained the addition of ₹ 8,52,513 made by the Assessing Officer by holding that the said addition was made on the basis of sale instances and not on hypothetical basis. It was further held by the Tribunal that nothing was produced by the assessee to show the basis of wrong valuation. The assessee itself adopted the value of rice at ₹ 1050 per quintal and no reason had been given for revaluing the same at ₹ 950 per quintal. The stock had to be valued either at the market rate or at the cost price but the assessee had adopted a different view which was not realistic. Further, for husk, the original value was taken at ₹ 55 per quintal which was revised to ₹ 48 per quintal but in the case of Pooja Fats Pvt. Ltd., a sister concern of the assessee, the closing stock of husk was valued at ₹ 60 per quintal. For rice bran, the value of rice was worked at ₹ 328 per quintal which was revised to ₹ 280 per quintal whereas during the relevant financial year, it was at the rate of ₹ 295 per quintal. - Decided against assessee
|