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TMI Blog1987 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... he books printed was less than the entire supply of that book, the closing stock was taken as the difference between the total cost and the sale proceeds. This was the method adopted by the assessee in valuing the closing stock in the past years. The IAC (Asst), who made the assessment, was of the view that the method adopted by the assessee is not one which is recognised as per the principles of accountancy according to which the closing stock is to be valued at the cost price or market price whichever is lower. Thus he rejected the method adopted by the assessee and made an addition of Rs. 2,72,945. 2. On appeal, the CIT(A) held that the method of valuing the closing stock at the difference between the sale proceeds and the total cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that in the past more than two decades this very method adopted by the assessee was accepted by the Department and the same method has been followed in this year. Having accepted the said method, the Department cannot can not turn round and say that the method is not a correct one. This is a consistent method followed by the assessee and should be accepted. He further urged that the demand for the books would be only in June after the schools are reopened. So, on 31st March, there will be no demand for these books and the value of the same would be nil. Further, until the government recommends the same book for the next academic year, the book as on 31st March will have no value. Such an order was passed during this year. He placed st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing adopted by the trader consistently and regularly cannot be discarded by the departmental authorities on the view that he should have adopted a different method of keeping account or of valuation. In British paints Indian Ltd vs. CIT. West Bengal lll. Calcutta (1978) 111 ITR 53 (Cal) the Calcutta High Court held that the method adopted and regularly followed over the periods and accepted by the Revenue should not be departed from unless there is good reason for the same. The ratio laid down in the above cases would squarely apply to the facts of the instant case. In our view, by the method adopted by the assessee in valuing the closing stock, the true profits can be derived properly. Hence, the IAC who made the assessment, was not justif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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