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2015 (9) TMI 1284 - AT - Income TaxRejection of declared valuation of closing stock - Held that:- Find considerable cogency in the assessee's contention mentioned in the Ld. CIT(A) order that all the purchases and direct expenses under different heads and also sales were verifiable and supported by documentary evidence. The correctness of the declared profit as reflected in the Trading account was well proved and substantiated by the method of accounting regularly employed was not disputed. Thus on facts and in law there was no warrant and legal justification for rejection of declared valuation of closing stock. Find force in the assessee's contention that AO was wrong to hold that the closing stock was not correctly valued on the basis of which by applying FIFO method he made an addition of ₹ 2,11,326/- on the basis of difference in value of unsold closing stock by that method and also rejected the account books which were duly audited by applying the provisions of section 145 on the sole basis of difference in unsold closing stock. Further, the AO has violated the provisions of law by adopting the FIFO method on his own without pointing out the defects in LIFO method which is a prescribed method without pin pointing the defects in the method constantly applied by the assessee on the basis of which if proper profit cannot be deduced. AO has wrongly applied the FIFO method and wrongly rejected the LIFO method as applied by the assessee - Decided against revenue. Disallowance of expenditure under the head Job Work - Held that:- Expenditure on job work was genuinely incurred in the course of business. Such expenditure being incidental and relating to job work receipts did not warrant any disallowance as the same had been claimed in the preceding as well as succeeding years, which was accepted by the Department, therefore, the impugned disallowance is not sustainable in the eyes of law - Decided against revenue. Expenditure under the head Trade Tax on purchases disallowed - Held that:- As regards addition incurred under the head trade tax on purchase was genuinely incurred in the course of business, hence, the same is also not sustainable in the eyes of law, hence, delete the same. - Decided against revenue. Carry forward of loss not claimed by the assessee in computation of income - assessee has submitted this was a mistake - Held that:- The assessee made application u/s. 154 of the I.T. Act which has not been disposed off by the AO. As find that Ld. CIT(A) in his finding has observed that this carry forward of loss cannot be allowed at appellate stage because the same was not claimed in the assessment and this matter is still pending u/s. 154 before the AO, therefore, Ld. CIT(A) has rejected the said ground, which is in my opinion is contrary to the law and principle of natural justice. In view of above, in the interest of justice,direct the AO to decide the Application u/s. 154 filed by the assessee first and then decide the issue in dispute by passing a speaking order, after giving adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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