9911796707
TMI Blog1997 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... The account year consisted of 17 months. The AO found that the assessee had 6506 gms. of silver bullion, which was valued @ Rs. 6,500 per kg. The assessee had 5,462 gms. of closing stock of silver fancy ornaments, which was valued @ Rs. 5,000 per kg. Likewise, the assessee had 25,421 gms. of silver ornaments in closing stock which was valued @ Rs. 4,800 per kg. The AO did not accept the above valuation of the closing stock. Applying the sale rate as disclosed in the last sale bill of the above articles, the AO increased the value of closing stock which resulted in an addition of Rs. 1,862 in silver bullion account, Rs. 10,378 in silver fancy ornaments account and Rs. 30,505 in silver ornaments account aggregating in all to Rs. 42,745 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his account as well. He, therefore, deleted the impugned addition of Rs. 42,745. The Revenue is dissatisfied. 4. We have heard the arguments advanced by the learned representatives of the parties. The learned Departmental Representative highlighted the point that the assessee had itself submitted before the AO that the closing stock was valued on the basis of market rates on closing date of accounting year. He, therefore, submitted that the impugned addition made by the AO is justified. The learned counsel for the assessee, on the other hand, submitted that the recognised method of valuation of closing stock is at cost or market rate, whichever is lower. Since closing stock had consisted mostly of opening stock, the assessee had valued the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that all the five persons were villagers. Two of the sellers had also deposed in their affidavits that they were agriculturists, one of them deposed that he had no bank account and that they had sold the old gold ornaments on the condition that they would receive payments in cash. The copies of two affidavits were also filed before the CIT(A). It was argued before him that there were exceptional circumstances in which the assessee made payments in cash. The submissions of the assessee found favour with the CIT(A). He observed that the assessee is carrying on business in the town of Burhanpur, which is surrounded by many tribal villages. He further noted that as per Gold Control Act, the assessee is required to maintain complete addres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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