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2018 (3) TMI 895 - AT - Income TaxAdditions on account of suppression of closing stock - defects in the LIFO method adopted - AS-2 by Institute of Chartered Accountants of India (ICAI) - Held that:- It is well settled that the consistent method of accounting or stock valuation followed by the assessee cannot be disturbed by the AO, without pointing out the defects in the method. LIFO is a well accepted and recognised method of valuation of closing stock. In our view, AS-2 by Institute of Chartered Accountants of India does not state that valuation of closing stock under LIFO method cannot be done. The act mandates that the valuation of inventory should be made in accordance with the method of accounting regularly employed by the assessee. Thus the AO, is wrong in disturbing the method of accounting regularly employed by the assessee for valuation of closing stock. Hence the addition is bad in law. - Decided in favour of assessee TDS u/s 194C - tds on payments made for melting charges and hall marking charges - assessee submits that the recipient parties have already offered this receipt to tax in their computation of total income and have accordingly paid tax on the same - Held that:- The second proviso to section 40(a)(ia) of the Act provides that in such cases no disallowance can be made u/s 40(a)(ia) of the Act. The courts have held that this proviso is retrospective in nature. Thus we set aside this issue to the file of the AO for verification and denovo adjudication of this issue of disallowance u/s 40(a)(ia) of the Act in accordance with law. - Decided in favour of assessee for statistical prposes.
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