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TMI Blog2012 (7) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be correct, if the contention of the assessee is accepted that the machinery lying in closing stock is the one sold on 29.10.07 to M/s. Finolex Cables Ltd. and not the one sold to M/s.Salzer Cables Pvt. Ltd. on 08.04.2007. 2. Whether CIT(A) is correct in holding that the addition on account of variation of closing stock value is Rs.11,92,736/- and not Rs.98,41,022/- given the facts of the case. 3. If there is variation in value of closing stock as held by CIT(A), the explanation given by the assessee to substantiate its value would be incorrect. In such circumstances, does it not amount to acceptance that assessee has not given the correct picture in regard to closing stock, and therefore the addition made by the A.O. has to be up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee at Rs.13,32,448. 5. Aggrieved by the relief granted by the CIT(A), Revenue is in appeal before us. 6. Shri Shrinivas, learned Departmental Representative for the Revenue argued vehemently stating that this is a case where the CIT(A) prematurely shifted the onus to the assessing officer without appreciating the fact that the assessee failed to furnish the details of the exact stock of finished product and the work in progress linked to the sales made after 1.4.2007. 7. The learned counsel for the assessee, reiterating the contentions urged before the lower authorities, strongly supported the order of the CIT(A). He submitted that the method adopted by the assessing officer for working out the value of the machines in closing st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Single Spoolers Type S 631 -2 Nos. which are the subject matter of sale on 29.10.2007 for a sum of Rs.30,72,000, before the detection of differences later on. In this regard, we perused the order of the CIT(A) in general and para 8.4 and 8.5 in particular, where the CIT(A) has given proper reasoning while restricting the addition to Rs.11,92,731. The said paragraphs are reproduced for the sake of completeness of this order- "8.4 During appeal proceedings, the appellant was then asked to provide exact details of the two machines lying in stocks so that their price can be determined in relation to the sale prices given above and the exact valuation of stocks can be made. The appellant provided details of the two machines in stock and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly." Thus, the Single Spoolers Type S 631 -2 numbers, which are part of the finished goods valued at Rs.13,32,448, whose details are available at page 38 of the paper-book, were sold to Finolex Cables Ltd., vide sale invoice bearing Rs.30,72,000 in the month of October, 2007 and not in the month of April, 2007. Considering the G.P. rate of 17.8% in respect of the said machines and also considering the sale price of Rs.30,72,000, the finished product valued at Rs.13,32,448 is certainly a case of under valuation. Therefore, in our opinion, the said order of the CIT(A) is reasonable and it does not call for any interference. Accordingly, grounds raised by the revenue are dismissed. 9. In the result, appeal of the Revenue is dismissed. CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue may be sent back to the file the CIT(A) for fresh examination in the light of the judgment of The Apex Court noted above, for which there is concurrence from the learned Departmental Representative. 14. In view of the mutually agreed position on this issue, we are of the opinion that the matter should be set aside to the file of the CIT(A) with a direction to adjudicate the same afresh, considering the recent decision of the Apex Court in the case of Alom Extrusions Ltd. (319 ITR 306). The CIT(A) shall accordingly adjudicate this issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. 15. In the result, Cross-Objection of the assessee is partly allowed. 16. To sum up, appeal of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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