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2023 (8) TMI 280 - ITAT CHENNAIAddition on account of valuation of stock - assessee being resident corporate assessee is stated to be engaged in trading of cloth and job work - AO alleged that the assessee reflected low value of closing stock - acceptability of closing stock declared by the assessee and accepted by the Commercial Tax Department - HELD THAT:- As assessee has maintained proper books of accounts and the same are subjected to Tax Audit. No infirmity has been pointed out by Ld. AO in the physical stock as maintained by the assessee. The assessee has valued the stock on the basis of net realizable value. The assessee’s submissions were that there was damage to the stock due to heavy rains and floods. It could also be seen that the assessee is registered with commercial tax department and filing its sales tax returns. Apparently, the trading results have been accepted by commercial department and there is no adverse material on record, in this regard. In such a case, shortage of stock as mathematically computed by AO could not be upheld. The decision of CIT vs. Anandha Metal Corp [2004 (7) TMI 49 - MADRAS HIGH COURT] supports the case of the assessee wherein it was held that unless the competent authority under the Sales Tax Act differs with the closing stock of the assessee, the return accepted by the Commercial Tax Department is binding on the income-tax authorities. AO has no power to scrutinize the return submitted by the assessee to the commercial tax department which has been accepted. AO did not have any jurisdiction to go beyond the value of the closing stock declared by the assessee and accepted by the Commercial Tax Department. We find that similar fact exists in the present case. Therefore, following the same, we delete the impugned addition - Decided in favour of assessee.
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