9911796707
TMI Blog2012 (11) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... 24-5-2012 - Shri Joginder Singh, Shri R.C. Sharma, JJ. Appellant by Shri Arun Dewan Respondent by Shri P.D. Nagar O R D E R PER R.C. SHARMA, AM This is an appeal filed by the revenue against the order of the learned Commissioner of Income Tax (Appeals) dated 16.9.2011 for the assessment year 2007-08. 2. The only grievance of the revenue relates to deletion of addition of Rs. 9,88,363/- made on account of change in method of valuation of closing stock. 3. Rival contentions have been heard and record perused. From record we find that the assessee is engaged in the business of ginning and pressing of cotton. During the course of scrutiny assessment, the Assessing Officer found that the method of valuation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has himself showing excess profit of Rs. 9,88,363/- in the preceding year itself. Hence no addition could be made on this account this year as the assessee has already paid tax thereon in the preceding year itself. Detailed working of Rs. 9,88,363/- is enclosed, note on inventory valuation is enclosed and copy of Tax Audit Report with information relating to stock valuation are also enclosed. In his finding on the appellant s reply, the A.O. recorded in the assessment order that appellant s above submission is not justifiable as it could not fully convince the reason for deviation in method of valuation of closing stock. The appellant having given such a cogent explanation supported by relevant details, it was for the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AI wherein it has been laid down that inventories should be valued at the lower of the cost and net relisable value . Even in the tax audit report, the assessee has properly disclosed factum of change in method in column 12(b) of the tax audit report. Thus, we find that a bonafide change in the method must be accepted by the department and the assessee need not to revalue the opening stock provided the method is followed regularly thereafter. Vide notification dated 25.1.1996, the Central Government has also notified the accounting standards to be followed by any class of assessees u/s 145(2) of the Act. Sub-para 9 of said Notification reads as under :- A change in an accounting policy shall be made only if the adoption of a different a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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