Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1744 - AT - Income TaxRevision u/s 263 - deviation from the method of valuation of the stock prescribed u/s 145 / 145A - CIT proposed the valuation of closing stock by taking the average of opening stock and purchase price. - Held that:- In the instant case, we find that it is not in dispute that the assessee is consistently following the same method of valuation of closing stock which was also followed in the year under consideration. The profit was deduced in accordance with the method adopted by the assessee. Therefore, in our considered view, the Pr. Commissioner of Income Tax-1, Bhubaneswar was not justified in disturbing the consistent method of valuation. Further, we find that there is no direction in the impugned order to value the opening stock also by adopting the same method which was suggested in the valuation of closing stock. As in the case of Chainrup Sampatram [1953 (10) TMI 2 - SUPREME COURT] has held that it is a misconception to think that any profit "arises out of the valuation of the closing stock" and the situs of its arising or accrual is where the valuation is made. Valuation of unsold stock at the close of an accounting period is a necessary part of the process of determining the trading results of that period, and can in no sense be regarded as the "source" of such profits.” Thus the impugned order passed by Pr. Commissioner of Income Tax-1, Bhubaneswar cannot be sustained - Decided in favour of assessee.
|