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Facts
The assessee's appeal against the CIT(A)'s order concerned the valuation of closing stock. The Assessing Officer had made an addition of Rs. 26,07,495/- to the assessee's income due to a difference in the valuation of closing stock.
Held
The Tribunal noted that the assessee's contention regarding the nature of closing stock (talk time unsold) and the offer of differential value as commission income required verification. The matter was remanded to the Assessing Officer for fresh examination and a speaking order.
Key Issues
Valuation of closing stock and whether the differential value offered as commission income was correctly considered by the Assessing Officer.
Sections Cited
250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH ‘SMC’, SURAT
Before: Shri Sanjay Garg
Year : 2013-14 Mohmedajim Rasid Patel Ward-1(4) बनाम/ Nabipur Income Tax Officer v/s. Bharuch – 392 210 Bharuch – 392 001 (Gujarat) "थायी लेखा सं./PAN: BQYPP 7770 F (अपीलाथ&/ Appellant) ('( यथ&/ Respondent) Assessee by : Shri Krutarth Desai, Advocate Revenue by : Shri Ajay Uke, Sr.DR सुनवाई की तारीख/Date of Hearing : 08/01/2026 घोषणा की तारीख /Date of Pronouncement: 19/01/2026 आदेश/O R D E R The present appeal has been preferred by the assessee against the order of office of the Learned Commissioner of Income Tax, Appeals, ADDL/JCIT (A)-1 Gurugram [hereinafter referred to as ‘CIT(A)’] dated 26/03/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2013-2014.
The sole issue involved in this appeal relating to the issue of the valuation of the closing stock. The assessee is engaged in the business of distribution of sim-card talk time. The Assessing Officer (AO), during the assessment proceedings, noted that there was a difference of valuation of the Mohmedajim Rasid Patel vs. Ward-1(4) ITO Asst. Year : 2013-14 2 closing stock which he found of Rs.26,07,495/- and added the same to the income of the assessee.
The Ld. CIT(A) confirmed the addition so made by the AO.
Before this Tribunal, the Ld. Counsel for the assessee has submitted that the closing stock shown by the assessee was not in terms of the value of the sim-card, rather it was in the nature of talk time that remained unsold. He has submitted that the differential value of the closing stock was offered for taxation and was offered as commission income received of Rs.32,24,603/-. That the AO, while making valuation of the closing stock, has not considered the said amount of Rs.32,24,603/-. He has submitted that the said commission income offered by the assessee was out of the stock sold part of the payment made by the assessee.
5. This issue, in my view, requires verification at the ends of the AO. The AO will verify the above contention of the assessee and if found correct, will not make any addition on this issue. The assessee will furnish the necessary details and explanation, in this respect, and thereafter the AO will examine and verify the same and pass a speaking order on this issue.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 19 /01/2026. ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 19/01/2026 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS Mohmedajim Rasid Patel vs. Ward-1(4) ITO Asst. Year : 2013-14