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Dy. CIT Central Circle-1 (2) Pune Versus Shri VastuPal Ranka Prop. M/s. Ranka Jewellers

Addition on account of under valuation of stock by adopting FIFO method - clinching evidences regarding unaccounted purchases were found during the course of search action - Held that:- Respectfully following the decision of the Coordinate Bench of the Tribunal in the case of the sister concern under identical circumstances and in absence of any contrary material brought to our notice we find no infirmity in the order of Ld.CIT(A) deleting the addition to held that there was no reason to reject .....

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ssee by : Shri Suhas Bora Revenue by : Shri M.K. Singh ORDER PER R.K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 12-04-2013 of the CIT(A), I, Pune relating to the Block Period 01- 04-1996 to 24-10-2002. 2. The only effective ground raised by the Revenue reads as under: On the facts and circumstances of the case the Ld.CIT(A) has erred in deleting the addition of ₹ 12,37,818/- made by the Assessing Officer on account of under valuation of stock by adopt .....

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Directors and various other persons forming part of Ranka group from 24-10-2002 onwards. In response to the notice u/s.158BC the assessee filed return of income on 30-09-2003 declaring undisclosed income of ₹ 25 lakhs. 2.2 During the course of assessment proceedings the Assessing Officer observed from the various details furnished by the assessee that the assessee of Ranka Group, i.e. M/s. Ranka Jewellers, Raviwarpeth, Ranka Jewellers Pvt. Ltd., Ranka Jewellers, Karve Road are following av .....

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erage price. According to the Assessing Officer, this method of valuation holds good if there are no unaccounted purchases and sales. However, during the course of search evidences were found that the assessees of Ranka group were indulging in making unaccounted purchases and sales. If the unaccounted purchases are also taken into consideration for the purpose of determining the average price, the average price is increased in comparison to the average price determined by the assessee, for the p .....

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t in the regular returns and hence the issue is out of the purview of Chapter XIVB. It was further contended that both the closing stock and opening stock should be valued on the same line and hence effect will be negligible. 3. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that during the course of search at the business premises of Ranka Jewellers, Karve Road gold jewellery weighing 87913.24 gms was found and valued in the books at  .....

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sor in the case of M/s. Ranka Jewellers, Raviwarpeth which has subsequently been upheld by the Pune Bench of the Tribunal vide ITA Nos. 801, 820 and 994/PN/2006 order dated 06- 06-2011 the Ld.CIT(A) deleted the addition of ₹ 12,37,818/-. 3.2 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 4. After hearing both the sides, we find an identical issue had come up before the Tribunal in the case of M/s. Ranka Jewellers Vs. Addl.CIT vide ITA Nos. 801, 820 and 984/PN/2 .....

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egularly and the same was being accepted by the department in the past. During the course of assessment proceedings, the A.O. held that the average cost method followed by the assessee is not correct and the assessee should have followed the FIFO method for valuing the stock. The A.O. was thus of the view that the closing stock should be valued as per the closing purchase rate in the month of March by adopting the FIFO method. Accordingly he held that there was under value of stock as per books .....

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