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2022 (6) TMI 223 - AT - Income TaxUnder valuation of closing stock of rice - improper maintenance of stock register by the assessee-firm - unable to produce quality-wise closing stock before the Ld. AO - as per AO Quality of rice is not mentioned in stock register maintained by the assessee, purchase bills, most of sale bills, stock statement furnished to the bank and audit report filed by the assessee - CIT-A deleted the addition - HELD THAT:- The assessee-firm was unable to explain the valuation of quality wise closing stock of rice. The valuation of assessee-firm was submitted in Bank which was on basis of average rate of rice & paddy. This valuation submitted in bank is not supported in books of accounts. Respectful observation in the case of CIT(Central) Gurgaon v. Sheena Exports [2012 (4) TMI 465 - PUNJAB AND HARYANA HIGH COURT] that stock statement submitted in is unverified. The assessee later on through its regular books & day to day stock register had substantiated its claim related valuation of stock. Here is the lack of explanation before the Assessing Authority. CIT(A) also failed plug of the lacuna in factual matrix. The Ld. CIT-DR pointed out the documents are accepted by the Ld. CIT(A) without allowing opportunity to the Ld. AO. The additional evidence was accepted without considering legal provision. He prayed for sending back the matter to the Ld. Assessing Authority for proper verification of stock. On other hand, the method of valuation was adopted by the Ld. AO in closing stock that should be considered to opening stock also. So, both the valuation of opening and closing stock will be in the order. The asses see-firm should get proper opportunity to explain its method of valuation before the Ld. AO. The impugned order is set aside and the matter is restored back to Ld. AO for denovo adjudication after considering the assessee's evidences. The assessee, in turn, is directed to substantiate its case - Appeal of revenue allowed for statistical purposes.
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