Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

The Commissioner of Income-tax, Panchkula Versus Sh. Kuldeep Chand Jain (HUF)

Addition made u/s 145(3) on account of valuation of closing stock - ITAT deleted the addition - whether invoking of provisions of Section 145(3) were validly invoked as the assessee had valued the closing stock on LIFO basis as per his previous practice? - Held that:- We do not find any merit in the appeal. The assessee is engaged in the business of sale and purchase of jewellery. The Tribunal had noticed that the assessee was following LIFO method for valuing its closing stock from year to year .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng the addition made by the Assessing Officer as on the basis of the doctrine of consistency in relation to method of calculation of inventory as also the decision of the jurisdictional High Court in assessee's own case, recorded findings in favour of the assessee. - ITA No. 165 of 2014 (O&M) - Dated:- 8-9-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN, JJ. For The Appellant : Mr. Yogesh Putney, Advocate For The Respondent : Ms. Radhika Suri, Senior Advoate with Ms. Rinku Dahiya, Advocate AJ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he addition made u/s 145(3) at ₹ 58,28,390/- on account of valuation of closing stock by ignoring the fact that invoking of provisions of Section 145(3) were validly invoked as the assessee had valued the closing stock on LIFO basis as per his previous practice? 2. A few facts necessary for disposal of the present appeal as mentioned therein are that the assessee filed the return of income on 24.9.2009 for the assessment year 2009-10 declaring a total income of ₹ 9,15,800/-. Notice u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order dated 13.12.2011 (Annexure A-1) by making an addition of ₹ 58,29,237/- on account of undervaluation of closing stock. The Assessing Officer observed that the assessee has failed to give any reasonable and justified explanation for not rejecting his books of account and for accepting his method of valuation of closing stock by adopting Last In First Out (LIFO) method. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Panchkula [hereinafte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

filed by the revenue upholding the deletion of ₹ 58,28,390/- on account of valuation of inventory by the assessee and allowed the cross-objections filed by the assessee against addition of ₹ 1,50,000/- and restored the matter to the Assessing Officer to re-decide the same. Hence, the present appeal by the revenue. 3. Learned counsel for the revenue submitted that the true value of the closing stock could not be ascertained or determined by adopting the LIFO method and, therefore, va .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iate from the method of accountancy being followed by the assessee. The Assessing Officer has failed to show that the true value could not be determined except to urge so. Reference was made to the following judgments:- I. United Commercial Bank v. Commissioner of Income Tax (1999) 240 ITR 355 (SC); II. Commissioner of Income-Tax v. Sant Ram Mangat Ram (2005) 275 ITR 312 (P&H); 5. After hearing learned counsel for the parties, we do not find any merit in the appeal. The assessee is engaged i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aluation of closing stock of gold ornaments. The Tribunal in ITA No. 1378/Chd/2010 relating to the assessment year 2007-08 in the case of the assessee upheld the decision of the CIT(A) deleting the addition made by the Assessing Officer with the following observations:- 10. We have heard the rival contentions and perused the record. The assessee is engaged in the business of sale and purchase of jewellery. The assessee, in order to value its closing stock is following LIFO method which is one of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in ITA No. 1378/Chd/2010 relating to assessment year 2007-08 in DCIT Vs. Shri Kuldeep Chand Jain, HUF, vide order dated 24.04.2012, had held as under: 4. We have carefully perused the rival submissions, facts of the case and relevant record. The brief facts of the case are that the appellant is a wholesale & retail sarafa merchant. The assessee filed return of income on 31.10.2007, declaring income of ₹ 29,20,088/-. A survey u/s 133A of the Act was conducted, on the business premises o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lacs as deemed income. 5. In the course of assessment proceedings, the assessee informed the AO, that LIFO method of accounting was followed in valuation of closing stock. The contention of the assessee was not found acceptable by the AO. The AO referred to A.S.-2, that specifies of only three methods of determining the cost of inventories i.e. specific identification method, FIFO and Weighted average cost method. The AO made an addition of ₹ 32,08,977/- following the weighted average cos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2,08,977/- to see that during the A.Y. 2003-04, 2005-06 and 2006-07 assessment for which was completed u/s 143(3), the method of valuation of closing stock has been accepted by the AO including by the AO who has passed the assessment order for the year under appeal. Therefore, the AO cannot reject the method of valuation of closing stock which is consistently followed by the appellant and has also been accepted by the AO in the past. I agree with the appellant that rule of consistently has to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ordingly, made assessment. This being the position, we do not find any valid ground to accept the argument of Shri Bindal that the method adopted by the assessee for valuation of the stock was legally impermissible and on that account, the additions made by the Inspecting Assistant Commissioner should be restored. In United Commercial Bank v. CIT (1999) 240 ITR 3545, their Lordships of the Supreme Court held that the method which was consistently followed by the appellant bank for valuing the st .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he previous assessment years, it is held that the method of valuation of closing stock could not be rejected. Therefore, the addition made by the AO which by her order of rectification u/s 154 stands reduced to ₹ 19,45,073/- on account of difference in valuation of closing stock is deleted. This ground of appeal is allowed. 6. A bare perusal of the findings of CIT(A) reveals that on the basis of the doctrine of consistency in relation to method of calculation of inventory as also the decis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) in deleting the addition of ₹ 58,28,390/- by holding that the assessee had been consistently following the LIFO method of valuation of its inventory. 7. Apex Court in United Commercial Bank's case (supra) dealing with a case of valuation of stock held that a method of accounting adopted by the tax-payer consistently and regularly cannot be discarded by the revenue on the view that different method of keeping accounts or of valuation ought to have been adopted by the assessee. The bro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

et price. (3) A method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the departmental authorities on he view that he should have adopted a different method of keeping accounts or of valuation. (4) The concept of real income is certainly applicable in judging whether there has been income or not, but, in every case, it must be applied with care and within their recognized limits. (5) Whether the income has really accrued or arisen to the assessee must be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer

Notification: All Industry Rates of Duty Drawback Schedule

Notification: Exempts inter-state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 09/2017-IT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 08/2017-IT(R) to reduce CGST rate on specified supplies of Works Contract Services

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-CT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services.

News: Tax on fuel more important for a dry state like Gujarat

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: For an ayurvedic medicine to be classified under Chapter 30 has to pass the test whether it is for cure of any disease. If the same is only meant for care, then such product would not fall under medicament.

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Highlight: Demand of interest - the period of limitation that applies to a claim for the principal amount should also apply to the claim of interest thereon.

Highlight: Government issues new notifications under CGST, IGST and UTGST to grant fresh exemptions in respect of certain supplies.

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117 of the Central Goods and Services Tax Rules, 2017

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Manpower Service provider

Forum: Construction of single unit bungalow

Forum: Duty Drawback & Input Credit - under GST

Article: SIMPLIFIED E-WAY BILL UNDER GST

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version