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2017 (2) TMI 164 - AT - Income TaxReopening of assessment - Disallowance of undervaluation of stock - assessee of following FIFO method for valuation of inventory - Held that:- We find that the assessee had submitted complete details showing summary of fabric purchased and sold specifically showing the quantity, rate and value of the opening stock, purchases and closing stock before the authorities below and as such no defect has been pointed out by Revenue accept that FIFO method of valuation of inventory is followed by the assessee on cost basis while the AO followed average method for valuation of inventory. The Revenue has accepted the method followed by the instant assessee consistently for past several years and also for succeeding year and per-se no such contrarian stand of the Revenue was brought on record except for the impugned assessment year by learned DR or authorities below to disprove this contention of the assessee , and also more-so the tax impact is revenue neutral as the closing stock/inventory of the relevant previous year is opening stock/inventory of the immediately succeeding financial year. The assessment order dated 30-11-2010 passed u/s 143(3) of the Act for assessment year 2008-09 in the case of instant assessee wherein no addition has been made by Revenue on account of method of valuation of inventory is placed on record in file. Revenue has not been able to bring on record that how by following FIFO method of valuation of inventory based on cost, the profits of the assessee could not be computed correctly so as that it infringes on Section 145/145A of the Act. Appeal filed by the assessee is allowed.
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