TMI Blog1993 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... stock was being valued at market rate. This year, however, it valued the closing stock after bifurcating the stock into levy sugar and free sugar. Under Government regulations, a part of the sugar produced by the assessee, as may be prescribed from time to time, has to be surrendered in levy, while the assessee is free to sell the balance in open market. Payment for sugar acquired as levy was Rs. 167 per bag, while the ruling rate for free sugar in the open market was Rs. 270 per bag. The cost price was worked out at Rs. 177.90 per bag. This year, the assessee noted that out of the stock of about 40,557 bags, 28,217 bags were to be surrendered against levy, while the balance 12,340 bags were available to it for sale in the free market. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that it was entitled to value the sugar at cost or market price whichever was lower. In its order under reference, the Tribunal did not accept the submissions made on behalf of the assessee. However, it gave certain reliefs to the assessee in valuing the closing stock in the following manner. "No doubt, an assessee can value closing stock at cost or market price, whichever is lower. But, in our view, it has first to determine how it proposes to value the stock. At the stage of valuation of closing stock, 28,217 bags were not surrendered as levy. As pointed out by the learned Departmental representative, the policy of the Government for levy was determined from time to time. In our view, therefore, no part of the stock could be ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner has accepted the assessee's stand that it can bifurcate its closing stock into two categories and value them separately in determining its income for the year. In this connection she invited our attention to pages 15 and 16 of the paper book containing the order of the Appellate Assistant Commissioner wherein the Appellate Assistant Commissioner has bifurcated the closing stock into two categories, one of 28,217 bags classified as "levy sugar" and the other 12,340 bags classified as "free sugar". The former was valued at Rs. 167 per bag, while the latter was valued at Rs. 177.90 per bag. Again, it is pertinent to note that the former was valued at the selling rate while the latter was valued at cost. On a query made by the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal holding that the closing stock should be valued without making any bifurcation. On a due consideration of the submissions made by the parties and after perusing the material already brought on record, we are not inclined to interfere with the decision of the Tribunal. It is pertinent to note that, all along in the past, the assessee was valuing its closing stock at market rate. However, it was only in the year under reference that the assessee found that if it values the closing stock by bifurcating the stock into "levy sugar" and "free sugar", it would be able to reduce its tax burden. We are making this observation as no material has been brought on record to show the circumstances under which the assessee was obliged to bifurca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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