TMI Blog2013 (3) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... discrepancy tends to balance itself out over a period of years if the same method is consistently followed. This is because the closing stock of one year becomes the opening stock of the succeeding year and any addition made to the valuation of the closing stock to increase the profits for that year automatically gets neutralised when the same figure of closing stock is taken as the opening stock of the succeeding year. There is also no finding to the effect that the true profits of the business cannot be determined having regard to the method of valuation of stock employed by the assessee. As decided in India Motor Parts & Accessories Pvt. Ltd. vs. CIT (1965 (2) TMI 84 - MADRAS HIGH COURT) the method of valuing the slow moving and obsoles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed in cross-appeals. 2. The following questions stated to be substantial questions of law have been proposed by the revenue: "2.1 Whether learned ITAT erred in deleting the addition of Rs.90,35,298/- made by the Assessing officer on account of provisions for impairment of stock? 2.2. Wether learned ITAT/CIT (A) erred in deleting the addition of Rs.5,00,00,000/- made by the Assessing officer on account of Sales of VSAT equipment?" 3. We may straightaway say that so far as the second question is concerned, the learned standing counsel for the revenue fairly stated that the addition was made on the basis of the sales tax assessment and that the Tribunal deleted the addition on the basis of the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain items of stock together with their realisable rate as on 31.03.2003 and 31.03.2004. The assessing officer rejected the assessee's claim for reduction in the value of the closing stock made on the basis of the net realizable value being less than the cost and made an addition of Rs.90,35,298/- to the business profits. 5. On appeal the CIT (Appeals) noted that though the assessee was right that there was some diminution in the value of inventory, complete details were not available. He, therefore, restricted the addition to 50% i.e. Rs.45,17,649/-. 6. Both the revenue and the assessee filed cross-appeals before the Tribunal. The Tribunal recorded the following findings: - (a) The claim of the assessee that the value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned standing counsel fairly stated that the assessee can value the stock at the lower of the cost or the net realisable value as it is a recognised and accepted method. He, however, submitted that the claim of the assessee was not supported by any details. But this submission is contrary to the finding of the Tribunal which has referred to the assessee's letter dated 27.12.2006 submitted before the assessing officer along with the necessary details in support of the valuation. These details have also been extracted by the Tribunal in para 11 of its order. We are, therefore, unable to accept the contention of the revenue that the claim of the assessee remains unsupported. It is also to be noted that on a question of valuation of the closin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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