TMI Blog2016 (10) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... ng accepted from year to year in the absence of any contrary findings by the Assessing Officer. We hold that no addition is maintainable made on account of value of closing stock and the order of the CIT-A is justified and the grounds raised are dismissed. - Decided in favour of assessee. - I.T.A. No. 202/KOL/2015 - - - Dated:- 4-10-2016 - Shri P. M. Jagtap, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For The Revenue : Shri Niraj Kumar, CIT, Ld. Sr. DR For The assessee : Shri S. M Surana, Advocate, Ld. AR ORDER Shri S. S. Viswanethra Ravi, JM :- This appeal by the Revenue is directed against the order dated 13-11-2014 of the Commissioner of Income Tax(Appeals),XXX, Kolkata for the assessment year 2011-12. 2. In this appeal, the Revenue has raised the following effective grounds:- (i) That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting the addition on undervaluation of closing stock for ₹ 8,73,46,711/- without considering the fact that the assessee has never claimed the value of stock of gold for the F. Yr. 2004-05, 2005-06 in the valuation of closing stock for the A. Yr. 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apphire 3340.580 ct 291,518.00 Semi Precious 11372.620 278,995.00 Imitation Stone 5086.449 ct. 202,795.00 Total 142,624,442.00 5. Basing on above information as provided by the Assessee, the AO summarized the valuation of stock as under: Total value of stone other items ₹ 7,69,29,855/- Add: Gold Value ₹ 6,56,94,587/- Total value of stock Rs.14,26,24,442/ Total Gold stock in terms of pure Gold 107167.19 grams Less : Gold deposit as claimed by the Assessee 39083.07 grams Net gold stock in terms of pure gold 68084.12 grams 6. The AO was of the view, that the assessee deliberately undervaluing stock by following LIFO method of valuation of gold stock and proposed FIFO method of valuation of stock of gold to be appropriate for valuation of gold s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings relating to assessment year 2009-10 but in the F.Yr. 2010-11 the assessee considered the value of stock of gold for F. Yr. 200:4-05 2005-06. This discrepancy is of a very serious nature and contradicts the claim made by the assessee that he has consistently followed the LIFO method of closing stock. 10. The AO did not accept the submission of the assessee regarding application of LIFO method for valuation of stock of gold. The AO applied gold rate as it was existing in F.Y 2010-11 ₹ 1993.50 per gram and modified the value of gold stock at ₹ 8,73,46,711/- and added the same to the total income of the assessee on account of under valuation of stock. 11. The CIT-A observed that the AO did not give any reason for rejection of LIFO method for valuation of gold stock and also found fault with the application of rate of gold per gram in F.Y.2010-11 to FY s 2004-05, 2005-06, 2006-07 and 2010-11 and found the assessment order made without any basis. The CIT-A deleted the addition of ₹ 8,73,46,711/-as made by the AO by following the first appellate order dt:08-02-2013 for A.Y.2009-10. 12. Having aggrieved by the order of CIT-A, the Revenue before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the said jewellery being old conventional jewellery was not sold during the year and was available at the close of the year. The balance stock was out of the purchases made during the year less sales made by the assessee. The Assessing Officer while re-computing the value of stock has accepted the weights in grams of stocks but had only revalued the stock by adopting a figure higher than rate disclosed by the assessee. We find no merit in the said addition being made by the Assessing Officer where the valuation of closing stock has been changed vis-a-vis its value and not because of any difference in the quantity of stock. The assessee was consistently following a particular method of accounting which is being accepted from year to year and in the absence of any contrary findings by the Assessing Officer, there is no merit in not adopting the method of valuation of stock being consistently followed by the assessee. Further we find support from the ratio laid down by the Hon'ble Supreme Court in Chainrup Sampat Ram Vs. CIT 24 ITR 481 (SC) (supra) wherein it has been held that the value of stock cannot be appreciated higher than the cost because the closing stock is not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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