TMI Blog2016 (2) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer assessed the income of the assessee at ₹ 9,38,600 by making an addition of ₹ 8,52,513. On appeal by the assessee, the Commissioner of Income-tax (Appeals) restricted the said addition of ₹ 8,52,513 to ₹ 14,344. On further appeal by the Revenue, the Tribunal sustained the addition of ₹ 8,52,513 made by the Assessing Officer by holding that the said addition was made on the basis of sale instances and not on hypothetical basis. It was further held by the Tribunal that nothing was produced by the assessee to show the basis of wrong valuation. The assessee itself adopted the value of rice at ₹ 1050 per quintal and no reason had been given for revaluing the same at ₹ 950 per quintal. The sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staining the addition to the extent of ₹ 8,52,513 by not allowing the appellant to exercise the right granted to him by section 139(5) of the Income-tax Act, 1961 for revising of the Income-tax return to which he is legally entitled ? B. Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified on facts and in law in reversing the orders of the Commissioner of Income-tax (Appeals) and thereby confirming the addition to the extent of ₹ 8,52,513 as made by the Assessing Officer by failing to appreciate the fact that the Assessing Officer itself has in earlier as well as in future years accepted the similar method of valuation of closing stock of the appellant which is in clear d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to inadvertent mistake committed by the accountant. According to the assessee, the method of valuation of closing stock regularly being followed by it was to value the raw material at their cost price whereas the finished goods and other bye-products were to be taken at their realizable value which is discernible from the remarks of the auditor given on Form 3CB and 2CD of the tax audit report (annexure A4) for the year ending March 31, 1997 to March 31, 1999. The Assessing Officer, vide assessment order dated March 19, 2001 (annexure A2) rejected the revised valuation of the closing stock of the assessee and assessed the income at ₹ 9,38,597 by making an addition of ₹ 8,52,513. Feeling aggrieved, the assessee filed an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the Revenue supported the orders passed by the Assessing Officer as well as the Tribunal. 5. We have heard learned counsel for the parties. 6. The original return was filed on October 28, 1998 declaring the income at ₹ 86,080 which was subsequently revised to ₹ 1,14,162 on February 3, 2000. In the original return, the valuation of the closing stock was shown at ₹ 1,99,20,808.75 which was revised to ₹ 1,99,48,886. The closing stock included rice, rice bran, phak, husk and bardana and the assessee revised the value of rice husk, rice bran and bardana. The assessee took a plea that since the valuation of certain finished goods was wrongly adopted at higher rates, their realizable value needed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of ₹ 295 per quintal. The relevant findings recorded by the Tribunal read thus : We have not found any mistake in such a conclusion of the Assessing Officer which is based on sale instances and not hypothetical. What was the basis of wrong valuation has not been adduced before us by the assessee. This is an undisputed fact that the assessee himself adopted the value at ₹ 1050. What prompted the assessee to revalue the same at the rate of ₹ 950 has not been explained before us. Undisputedly, the original return was duly signed by the partner of the assessee firm. The learned Commissioner of Income-tax (Appeals) has not adduced any reasoning in coming to a particular conclusion. We are in agreement with the content ..... X X X X Extracts X X X X X X X X Extracts X X X X
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