TMI Blog2016 (5) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Appeals) was right in deleting the addition. - Decided in favour of assessee. - ITA No. 196 /Chd/2014 - - - Dated:- 3-5-2016 - Shri H. L. Karwa, Vice President And Ms. Rano Jain, Accountant Member For the Appellant : Shri S.K. Mittal, DR For the Respondent : Shri Rakesh Cajla ORDER Per Rano Jain, A. M. The appeal filed by the Revenue is directed against the order of learned Commissioner of Income Tax (Appeals), Patiala, dated 26.12.2013, relating to assessment year 2010-11, passed under section 250(6) of the Income Tax Act, 1961 (in short 'the Act'). 2. The facts of the case are that the assessee is a jeweler. During the course of assessment proceedings, the Assessing Officer rejected the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Appeals) from the Assessing Officer and after considering all this, the learned CIT (Appeals) allowed the appeal of the assessee, mainly relying on the order of the I.T.A.T., Chandigarh Bench in the case of ACIT Vs. Jagdish Chand, 90 TTJ 943 (Chd). 4. Aggrieved by this, the Department has come up in appeal, raising the following grounds of appeal : 1. In the facts and circumstances of the case, Ld. CIT(A) has erred in not sustaining the action of the AO regarding rejection of books of account u/s 145(3) and thereby deleting the additions of ₹ 12,35,287/- in gold ornaments account, ₹ 22,12,8367- in diamond jewellery account for low G.P. for undervaluation of closing stock of gold and diamond jewellery and ₹ 3,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the AS-2 prescribed WAC method for inventory valuation in cases involving identical goods or items. 4. It is prayed that the order of Ld. CIT(A) be set aside and that of the AO restored. 5. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard and finally disposed of. 5. The learned D.R. vehemently argued the case of the Revenue relying on the order of the Assessing Officer and further stated that the Assessing Officer has very meticulous being able to bring on record the fact that there are so many discrepancies in the books of account maintained by the assessee and only after that he has rejected the books of account and made the addition. 6. The learned counsel for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Chainrup Sampatram vs. CIT (1953) 24ITR 481 (SC). The average cost of opening and purchases is also an accepted method of valuation at cost approved by the accounting standards issued by the Institute of Chartered Accountant of India. In the present case, it is further not contested by the Revenue that similar method of accounting was followed by the assessee in earlier year. For all the above reasons, we are of the view that the method of valuation adopted by the assessee was correct and addition made on account of enhancement of value of stock is no justified. The Id. CIT(A) rightly deleted the addition. His action is hereby confirmed. In this connection, reliance may be made on the decision of ITAT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the A.O. is that in place of WAC method FIFO method should be adopted. As regards cash sales, in the case of R.B.Jessaram Fatehchand Vs. CIT 75 ITR 33(Bom) ,it is held that non- inclusion of addresses of customers in respect of cash transaction can not be basis for rejection of Books of Account. The fixation of an arbitrary rate by the A.O for the stones/diamond and further adding 10% of gold in diamond jewellery without any evidence, in my opinion is not correct. The appellant is valuing the closing stock on the basis of weighted average cost method consistently. Further, The sale of articles being sold is as per market and customer preference in the type of business of the appellant. Therefore in view of nature of business a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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