9911796707
TMI Blog2013 (9) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... ing substantial question of law:- "Whether the Income Tax Appellate Tribunal was justified in confirming the deletion of Rs.75,84,346/- on account of low valuation of closing stock made by the CIT (Appeals) specially when the matter is covered by the decision of Apex Court in the case of CIT vs. British Paints India Ltd. 188 ITR 49 (SC) in favour of the appellant." The brief facts of the case are that the assessee is a cooperative society, who is engaged in the manufacturing and sale of sugar in its factory at Majhola in District Pilibhit. The assessee has filed the loss return subject to carry forward of unabsorbed losses and depreciation of earlier years. But the A.O. has passed an order under Section 143(3), where he made the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee but such loss is simultaneously compensated by release of free sale sugar which is permitted to be sold at higher price in the open market. The levy sugar and free sale sugar both should be valued by uniform method of either the cost price or the market price, which ever is lower but valuation as adopted by the assessee leads to incorrect results. For rejecting the earlier method of accounting, learned counsel relied on the ratio laid down in the case of CIT vs. British Paints India Ltd. 188 ITR 49 (SC), where it was observed that estoppel is not applicable in the taxation matter and every assessment year is independent assessment year. Learned counsel also took an example of M/s L.H. Sugar Factory Ltd. where the closing stock of lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the A.O. for changing the said method. The identical addition in the earlier year was deleted. By considering the totality of the facts and circumstances of the case, it may be mentioned that the method valuation of closing stock is cost or market value whichever is lower. In case of levy sugar, the market value is lower than the cost. Hence, such stocks are valued as market price while the free sale sugar is valued at cost because market price of the free sale sugar was higher than the cost. When it is so, then the assessee is entitled to value its closing stock at cost price of market price which ever is lower. Moreover, in this regard, there is a concurrent finding of both the appellate authorities and in the peculiar facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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