TMI Blog2022 (6) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... A) also failed plug of the lacuna in factual matrix. The Ld. CIT-DR pointed out the documents are accepted by the Ld. CIT(A) without allowing opportunity to the Ld. AO. The additional evidence was accepted without considering legal provision. He prayed for sending back the matter to the Ld. Assessing Authority for proper verification of stock. On other hand, the method of valuation was adopted by the Ld. AO in closing stock that should be considered to opening stock also. So, both the valuation of opening and closing stock will be in the order. The asses see-firm should get proper opportunity to explain its method of valuation before the Ld. AO. The impugned order is set aside and the matter is restored back to Ld. AO for denovo adjudication after considering the assessee's evidences. The assessee, in turn, is directed to substantiate its case - Appeal of revenue allowed for statistical purposes. - I.T.A. No. 107/Asr/2017 - - - Dated:- 12-5-2022 - DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER Appellant by : None Respondent by : Sh. Ram Mohan Singh, CIT-DR ORDER Per Anikesh Banerjee, JM The instant appeal was filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm calculated the average rate of rice in stock statement which was furnished in the bank by the assessee-firm. This said report was considered by the Ld. AO as mother valuation. Accordingly, revalued the closing stock of rice paddy amount to Rs. 27,44,91,196/- as against valuation declared by the assessee amount to Rs. 23,21,58,401.29. As a results the valuation of excess closing stock amount of Rs. 4,23,32,795/- was added with the total income of the assessee. 4. Aggrieved assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) has deleted the entire additions of the assessee-firm. 5. Aggrieved Revenue filed an appeal before us for further adjudication. 6. The Ld. CIT-DR argued against the deletion of the addition of excess valuation of closing stock amount of Rs. 4,23,32,795/-. Reliance was placed in the order of Ld. AO which is reproduced as under: H). The assessee has been furnishing stock statements to the bank wherein it has been giving quality wise details of paddy but no quality wise detail of Rice has been given in any of the monthly stock statement furnished by the assessee to the bank. Even in the Stock Audit Report, Auditor has not been able t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Month of Submission of Stock statement to the Bank Average Rate of Rice reported in Stock Statement furnished to the bank 30.04.2011 Rs.2350 30.06.2011 Rs.2450 31.07.2011 Rs.2550 31.08.2011 Rs.2550 30.09.2011 Rs.2500 31.10.2011 Rs.3000 30.11.2011 Rs.3000 31.12.2011 Rs.3250 31.01.2012 Rs.3000 29.02.2012 Rs.2800 25.03.2012 Rs.2800 It is also pertinent to mention here that the Auditors in their Stock Statement Report had adopted the average cost of Rice at Rs. 3000/- as on 29.11.2011. But looking to the fact that the assessee itself had adopted average rate in the last two months of February and March, 2012 at Rs. 2,800/-, the same rate is adopted and the resultant val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Dy. Commr. of Income Tax, Circle-1, Bathinda vs. Ishar Infrastructure Developer (P) Ltd.; Bathinda, has been taken as the lead case. The relevant portion of the findings of the Tribunal are reproduced as under: 31. In view of the above discussion, the decision of Smt. Shakuntla Thukral (supra) as relied upon by the Ld. DR is not applicable to the facts and circumstances of the present case. 32. The decisions relied upon by the Ld. CIT(A) of the Hon'ble Punjab Haryana High Court, in the cases of M/s. Santosh Box Factory, M/s. Sidhu Rice Mills and in the case of M/s. Devi Dayal Rice Mills are squarely applicable to the facts of the present case as the Revenue has not brought on record during the assessment proceedings or before the Ld. CIT(A) or even before us that physical verification of the stock has actually been done and accordingly stock statements so submitted before the bank authorities and DP register cannot be relied upon. 33. In the case of CTT vs. Veerdip Roller (P) Ltd. (2010) 323 ITR 341 (Guj), the facts are that the AO made addition on account of difference in the value of closing stock furnished to the bank and the value of the stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Ld. CIT-DR, considering the submissions and relevant materials on record, our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 9.1. The assessee-firm was unable to explain the valuation of quality wise closing stock of rice. The valuation of assessee-firm was submitted in Bank which was on basis of average rate of rice paddy. This valuation submitted in bank is not supported in books of accounts. Respectful observation in the case of CIT(Central) Gurgaon v. Sheena Exports 207 Taxman 75 [2012] (P H) that stock statement submitted in is unverified. The assessee later on through its regular books day to day stock register had substantiated its claim related valuation of stock. Here is the lack of explanation before the Assessing Authority. The Ld. CIT(A) also failed plug of the lacuna in factual matrix. The Ld. CIT-DR pointed out the documents are accepted by the Ld. CIT(A) without allowing opportunity to the Ld. AO. The additional evidence was accepted without considering legal provision. He prayed for sending back the matter to the Ld. Assessing Authority for proper verification of stock. On other hand, the method of valuation w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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