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2017 (2) TMI 1352 - HC - Income TaxUnder Valuation of closing stock - entitlement to value the article at market value OR cost price - valuation of closing stock being based on "realizable value" as had been quantified by actual realisation after the close of the accounting year - Held that:- Tribunal has not looked into this aspect of the matter that valuation can be made on the basis of actual cost price, marketing rate whichever is lower and instead it has taken only the market rate and that too as on 02.04.2010 that is just one day later to determining for valuation of stock in trade which is not consistent with the law laid down. In the matter of Sugar as we have noted above in Commissioner of Income Tax versus Ponni Sugars and Chemicals Ltd. (2008 (9) TMI 14 - SUPREME COURT ) Court allowed valuation of closing stock at levy price though it was less than cost of manufacturer of sugar. A.O. in fact has completely lost sight that the intention of valuation of stock in trade is not to penalize Assessee by computing a hypothetical income which has yet to be earned by Assessee but the object is that a proper valuation of entire stock must be available so that profit and loss in the particular Assessment Year must be asserted in the best possible manner. We, therefore, are of the view that Tribunal has erred in law in upholding valuation of closing stock on the basis of price received by Assessee on 02.04.2010 and not in the light of principles as discussed above that is the actual cost price or market rate whichever is lower - remand the matter to Tribunal to reconsider the valuation of closing stock
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