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Income Tax Appellate Tribunal, C/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal is filed by the Revenue, aggrieved by the order of the Learned Commissioner of Income Tax(A)-3, Chennai dated 27.5.2016 pertaining to assessment year 2012-13.
The grievance of Revenue in its appeal is with regard to deletion made towards difference in valuation of finished goods, traded goods, suppression for sale of fabric in yarn quantity and sales price of waste cotton.
The ld.D.R submitted that the valuation of these items are done at market price or cost whichever is lower. According to him, there was a discrepancy in the value adopted by the assessee and he pointed out the valuation of stock as follows:
Sl. Description Value(Rs.) No. 1 Opening Stock 257.00 2 Production 240.02 3 Sales 242.20 4 Closing Stock 223.74 According to ld.D.R, the value of the closing stock cannot be below the cost of production, which is `240.02.
On the other hand, ld.A.R submitted that the crops lying with the assessee are at different stages and it cannot be valued at market price. Certain closing stock was in a position of packet and kept at go-down, certain stocks are unpacked condition and certain closing stock under the process of finishing but not ready for packing.
According to ld.A.R, it is not possible to adopt the cost or market price whichever is less. He further submitted the closing stock is valued on the stages of completion. He submitted that no reason has been given by the ld. Assessing Officer except stating that valuation is not at average rate, is arrived at by him for altering the valuation. He relied on the order of Ld.CIT(A).
I have heard both the parties and perused the material on record. In principle, I agree with the contention of the ld.A.R is that valuation of closing stock to be done on the basis of the stages of completion, the average rate cannot be considered to value the same. However, the Ld.CIT(A) not called for a Remand Report, directly deleted the addition. Hence, in my opinion, it is appropriate to remit the issue to the file of ld. Assessing Officer to value the closing stock on the basis of stages of completion. Accordingly, the entire issue in dispute is remitted to the file of ld. Assessing Officer for fresh consideration.
In the result, the appeal of Revenue is partly allowed for statistical purposes.
Order pronounced on 21.12.2017