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TMI Blog2011 (12) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... l, Chandigarh Bench, Chandigarh (for short 'the Tribunal'). The questions are identical and for facility of reference, the facts are taken ITR No. 358-359 of 1995. In the said case, the Tribunal has referred the following substantial question of law for the consideration of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in sustaining the addition of Rs.1,13,765/- made by the Assessing Officer on account of suppressed valuation of the closing stock, whereas the assessee was consistently following a particular method of accounting in the past for the purposes of the valuation of the stock?" The assessee earned its income from manufacture and sale of vegetable ghee out of edible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther appeal by the Revenue set aside the said deletion relying upon the judgment of Hon'ble Supreme Court in Commissioner of Income Tax Vs. Britsh Paints India Ltd. (1991) 188 ITR 44. The Hon'ble Supreme Court in the aforesaid judgment has held that any system of accounting which excludes, for the valuation of stock-intrade, all costs other than the cost of raw-materials for the goods-in-process and finished products, is likely to result in a distorted picture of the true state of the business for the purpose of computing the chargeable income. It observed as under: "21. Any system of accounting which excludes, for the valuation of the stock-in-trade, all costs other than the cost of raw materials for the goods-in-process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in Britsh Paints India Ltd. case (supra) has also found that the system of accounting regularly employed by the assessee, the correctness of which has not been questioned in the past, is not a ground to permit the assessee to continue with the valuation method. It observed as under: "12. It is not only the right but the duty of the Assessing Officer to consider whether or not the books disclose the true state of accounts and the correct income can be deduced therefrom. It is incorrect to say, as contended on behalf of the assessee, that the officer is bound to accept the system of accounting regularly employed by the assessee the correctness of which had not been questioned in the past. There is no estoppel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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