TMI Blog2018 (12) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... in a later year on the same issue, involving identical facts unless and until a cogent case is made out by the Assessing Officer on the basis of change in facts. For that we rely on the order of the Hon’ble Supreme Court in RadhaSoamiSatsang vs. CIT [1991 (11) TMI 2 - SUPREME COURT]. - Decided against revenue - ITA No.2127/Kol/2016 - - - Dated:- 27-7-2018 - Shri S. S. Godara, JM And Dr. A.L.Saini, AM For the Appellant : Md. Usman, CIT(DR) For the Respondent : Shri Anil Kochar, Advocate ORDER PER DR. A. L. SAINI: By way of this appeal, the Revenue has challenged the correctness of the order dated 19.08.2016, passed by the ld. Commissioner of Income Tax (Appeals)-4, Kolkata in the matter of assessment u/s 143(3) of the Income Tax Act, 1961( the Act ) for the Assessment Year 2011-12. 2. The grievances raised by the Revenue are as follows: 1. That in facts and circumstances of the case and in law, the Ld. CIT(A) is erred in giving relief of ₹ 14,43,06,995/- stating that the quantitative analysis which has been prepared by Registered Valuer at the time of Survey and what is recorded in stock register has no difference except for 215 gms which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. weighing (Gold: 129110.665 gms), silver 15 kg,Diamonds 723.15 cts.) approx and totaling to ₹ 113,726,138/-. But taking the average cost/revaluation of stock in trade will come to ₹ 20,19,95,000/- as on 25.03.2011 and thus there is stock value difference of ₹ 88,268,862/- and based on the appreciation value of stock; I am tendering a cheque of ₹ 3 crore as additional income tax. 5. On verification of audited books of accounts of assessee, it was found that assessee had not accounted the stock difference and not revalued the value of stock, which is contrary to the submission made on the date of survey. Further it was found that assessee has made total tax payment of ₹ 13,247,630/- only and retracted from his original assurance of paying ₹ 3 Crore additional tax on the basis of discrepancies found on the date of survey. Considering all the points, assessee was summoned u/s 13l on 22.01.2014, along with a show cause notice to appear and explain the discrepancies recorded in Final Survey Report. In response, the assessee submitted a written submission before the Assessing Officer. The assessee explained that he valued the stock atco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 gms which is due to mis-weighing of items. Further, the valuation of stock made by the assessee was well-established and was consistently being followed by the assessee in the earlier years. The ld. CIT(A) allowed the assessee s appeal by following the judgment of the Hon ble ITAT Kolkata in the assessee s case for Assessment Year 2009-10 in ITA No.51/Kol/2013. 8. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. 9. The ld. DR for the Revenue submitted before us that as per Companies (Accounting Standard) Rules, 2006, the assessee should follow the Mandatory Accounting Standard No.2 Valuation of Inventories . TheAccounting Standard-2, mandates that the assessee should follow only the first-in, first-out (FIFO) Method or weighted average, as a cost formula to value the inventory. The ld. DR for the Revenue submitted that in assessee s case under consideration, the stock is being valued by applying the last-in, first-out (LIFO) method which is not a recognized method as per Accounting Standard-2. The LIFO method has been deleted by the Institute of Chartered Accountant of India (ICAI). TheLIFO method is a method which does not follow the accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned; the principle is that it should be valued at cost or net reliable value whichever is lower. We note that so far the method of valuation of closing stock is concerned, the assessee has been following the norm to compute the value of closing stock at cost and net reliable value whichever is lower by applying the LIFO method. We note that quantitative analysis which has been prepared by the Registered Valuer at the time of survey and what is recorded in the stock register has no difference except for 215 gms which is due to mis-weighing of items. We note that the valuation of stock made by the assessee was well-established and was consistently being followed by the assessee in the earlier years. Once adopted method of valuing closing stock should be followed consistently unless there is cogent reason to change it. We note that it is a well settled legal position that factual matters which permeate through more than one assessment year, if the Revenue has accepted a particular's view or proposition in the past, it is not open for the Revenue to take a entirely contrary or different stand in a later year on the same issue, involving identical facts unless and until a cogent cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any which is not in dispute. There is no deviation in the method of accounting employed during the year as could be evident from the tax audit report, wherein the tax auditor had not reported any deviation adopted by the assessee. It was submitted that the valuation of the closing stock of last year which was the opening stock this year was duly accepted by the ld AO in the earlier year and therefore cannot be disturbed. The increase during this year has been valued at LIFO method taking the value of purchase during the year and such method was also followed from year to year and every year. Therefore there was no reason to disturb the valuation of closing stock. It was further submitted that LIFO method is a recognized method for the purpose of valuation of the closing stock. The assessee placed reliance on the decision of Hon'ble Madhya Pradesh High Court in the case of CIT vs J.P.Patel reported in 263 ITR 421 (MP) wherein it was held that LIFO method is well recognized method and once a recognized method has been taken recourse to and the same has been adopted , there is no reason to discard the same. As the issue is squarely covered in favour of the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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