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2017 (6) TMI 1270 - ITAT KOLKATAAddition on account of under-valuation of closing stock - difference in the valuation of closing stock of finished goods - as per assessee average selling price adopted by the Assessing Officer for working out the difference in the value of closing stock of finished goods was not correct - Held that:- The working in this regard was furnished by the assessee to show the average selling price of the corresponding items of finished goods lying in the opening stock on the basis of sales made in the month of March. In the working so furnished, the gross profit @ 12% was reduced by the assessee from the average selling price worked out by it to show that the net realisable value so determined was correctly taken for the purpose of valuation of closing stock of finished goods. As rightly contended by the D.R., all these workings prepared and furnished by the assessee for the first time before the CIT(Appeals) in support of an altogether new stand taken to explain the difference in the valuation of closing stock of finished goods was not forwarded by him to the Assessing Officer for giving an opportunity to verify the same, as required by Rule 46A of the Income Tax Rules, 1962 and there is thus a clear violation of the said Rule by the ld. CIT(Appeals) while giving relief to the assessee on this issue. Both the sides have agreed that if the actual cost of the relevant finished goods lying in the opening stock can be ascertained from the relevant stock records, the same has to be adopted for the purpose of valuation of closing stock unless the assessee is in a position to show that in case of certain items of finished goods lying in the closing stock, the net realisation value is lower than the cost so ascertained. Keeping in view this submission made by both the sides, we set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after verifying the actual cost of the relevant items of finished goods lying in the closing stock from the relevant stock record maintained by the assessee. Appeal of the Revenue and that of the assessee both are treated as allowed for statistical purposes.
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