TMI Blog2017 (12) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... ich reflects the fairest possible approximation of cost incurred, by the Institute of Chartered Accountants in their Accounting Standards. Therefore we do not find any justification in rejecting this method of valuation by AO. Moreover AO has also not furnished any reasonable explanation for rejecting the method consistently adopted by assessee. We are therefore inclined to allow this ground raised by assessee. As we have upheld the weighted average method for valuation of closing stock, we allow ground raised by the assessee wherein the books of accounts have been rejected by Ld. AO to the extent of the valuation of stocks. - ITA No. 6600/Del/2014 - - - Dated:- 22-12-2017 - SHRI G.D.AGRAWAL, PRESIDENT AND SMT. BEENA A PILLAI, JUDICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in law in confirming the above said addition despite the fact that the weighted average method is an approved method and the assessee has been following the same consistently. 5(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of ₹ 71,223/- made by AO invoking the provisions of Section 14A of the Act. (ii) That the addition has been confirmed ignoring the fact that the AO had invoked provisions of Rule 80 without pointing out any inconsistency in the amount of ₹ 29,120/- computed and added back by the assessee itself. 6. The appellant craves leave to add, amend or alter any of the grounds of appeal. 2. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the valuation made by assessee, and Ground No. 5 is in respect of the disallowance made under section 14A read with Rule 8D of the Act. She submitted that due to smallness of amount involved ground no.5 is not pressed. 4. Ground No. 3 and 4: Ld.AR submitted that during the year under consideration assessee has shown valuation of closing stock of ₹ 51.33 crores by following weighted average method. It has been submitted by ld.AR that this method is consistently followed by assessee in the earlier years which has not been disputed by revenue. Ld.AR filed before us year wise chart of method of valuation of closing stock adopted by assessee and accepted by the Department which is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... She placed reliance upon the relevant extract of Accounting Standard 2, which has also been approved by the ICAI, which is reproduced hereunder: 16. Cost of inventory is, other than the elementary dealt with in paragraph 13 shall be assigned by using the First in First - out, all weighted average cost formula. The formula used shall reflect the fairest possible approximation to the cost incurred in bringing the items of inventory to their present location and condition. 4.3. She thus submitted that valuation of inventory can be made either on FIFO method or weighted average method which is a well accepted method. 4.4. On the contrary Ld. DR placed reliance upon the order passed by authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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