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TMI Blog2013 (12) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... der of Commissioner of Income Tax (Appeals)-II, Agra dated 31.10.2006, arising out of the penalty proceedings under Section 271 (1) (c) of the Income Tax Act, 1961 of the Deputy Commissioner, Income Tax, Circle-VI, Jhansi. The proceeding was drawn against the assessee for imposing penalty after the finding recorded by the Assessing Authority in respect of the assessment year 2001-02, that the assessee had under-valued the stock-in-trade, was confirmed upto High Court. The High Court, dismissing the Income Tax Appeal No. 94 of 2006 on 24.4.2006, held as follows:- "In the present case the assessing officer has rejected the valuation of the assessee and has applied the lowest value applicable on the day of acquisition as the cost and has th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the U.P. Trade Tax Act, the valuation of closing stock is not very relevant and therefore, the Trade Tax Authorities may not be seriously concerned with the question. Because of the above reasons, we are unable to find any question of law on which this appeal can be admitted. It is accordingly dismissed." The notice was given for penalty on the ground of concealment of income under Section 271 (1) (c) of the Act on the finding confirmed by the High Court, that the appellant had grossly under-valued the stock-in-trade at the end of the year. The said addition was made in view of assessee's inability to explain the valuation of its closing stock, which was stated to be at market price, either with reference to the purchase or the sale rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than the purchase price. The AO applied the lowest of the purchase rates for each of the commodities constituting the assessee's closing stock as obtaining in the month of its purchase. The AO did not estimate such value. He accepted the lowest of the purchase price, available. In the absence of any other material produced by the assessee he accepted the lowest of purchase price as the value of the closing stock. As observed by the High Court in Income Tax Appeal No. 94 of 2006 arising out of assessment proceedings, there was no material or explanation of reducing the value of stocks much lower than the purchase and even lower in the market price as obtaining in the month of purchase. We do not find that the Tribunal committed any error ..... X X X X Extracts X X X X X X X X Extracts X X X X
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