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TMI Blog2014 (1) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... losing stock, by the cost of stock in transit only in the year under appeal, having found no fault in the method of accounting followed by the assessee, and consequently not made any such addition in the earlier years - addition made by including the stock in transit in the closing stock, without making corresponding adjustments in the stock figures of earlier years, the accounts of the assessee would reflect for the year under appeal a distorted picture - any adjustment to the closing stock would have its corresponding impact in the opening stock of the succeeding year - such an adjustment to the closing stock in the first place is of no significance – Decided against Revenue. - ITA No.328/Hyd/2013 - - - Dated:- 12-7-2013 - Shri Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule 7- "Inventories (at cost )" forming part of the Balance Sheet as at 31.03.2005 that the assessee-company had opening and closing of the following inventories apart from raw materials and stores as at 31.03.2004 and 31.03.2005 respectively: Details of inventories As at 31.03.2005 (Rs.) As at 31.03.2004 (Rs.) Work-in-progress 1,65,80,148 78, 57,093 Finished goods 11,85,740 87,65.,340 Stock in transit 3,36,97,545 1,01,79,954 Total 5,14,63,433 2,68,02,387 However as noticed from the Profit Loss Account for the year ending 31.03.2005, the increase/decrease in stock was shown at Rs.11,43,455/- instead of Rs.2,35,17,59 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly deleted the addition made by the Assessing Officer and allowed the appeal of the assessee. 6. Aggrieved by the relief granted by the CIT(A), Revenue is in appeal before us. 7. We heard both the sides and perused the material on record, including the impugned orders of the Revenue authorities. It ;is an undisputed fact that it is the non-inclusion of the stock in transit in the closing stock, which resulted in the impugned addition. It is the case of the assessee that it has been following a consistent method of accounting, according to which, difference in the valuation of inventories was on account of stock in transit, which represented purchases taken into account by the assessee only on receipt of the goods. The reasoning g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the stocks, I find no reason to disturb the same in a particular financial year to bring some amount to tax for that single year unless it was amply prove that the method followed by the appellant consistently resulted in under-assessment/escape of income every year. The Assessing Officer did disturb the method followed by the appellant for the subject assessment year and held that there is under-assessment of closing stock, which is not correct. If the Assessing Officer gives the same treatment to the good-in- transit every year, this does not lead to any under-assessment." We do not find any infirmity in the above reasoning given by the CIT(A) for deleting the addition made by the Assessing Officer. In the absence of any justificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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