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TMI Blog2015 (7) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly valued the closing stock on the basis of market price close to 31.03.2010. Hence, in the facts of the present case, this judgment of Hon'ble Apex Court rendered in the case of Chainrup Sampatram vs. CIT (1953 (10) TMI 2 - SUPREME Court) is also not applicable. From this Para of AS – 2, it comes out that only those events occurring after Balance Sheet Date are relevant which confirm the conditions existing at the balance Sheet Date. It means that if for the condition of stock on the balance Sheet Date or other factors existing at the balance Sheet Date, lesser prices has been realized in future, it can be said that such fall in price in future is because of conditions existing at the balance Sheet Date and in that situation, such reduced prices can be adopted as price on balance sheet date but in the present case, this is not a claim of the assessee that there was any defect in the goods at balance sheet date or any other factor was existing at the balance sheet date for which, the prices had fallen after 02.04.2010 and hence, this Para of AS – 2 is also not applicable in the facts of the present case. In fact, this Para supports our observations in Para 7 above. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has suppressed the valuation of closing stock. The assessee has taken the average sale price of sugar pertaining to period of April 2010 to August 2010 for valuation. The Assessing Officer rejected the valuation made by the assessee and valued the closing stock based on the principle in the case of CIT vs. British Paints India Ltd., reported in 188 ITR 44 (SC). 3. Learned D.R. of the Revenue supported the assessment order. He also placed reliance on a judgment of Hon'ble Apex Court rendered in the case of CIT vs. British Paints India Ltd. 188 ITR 44 (SC). 4. As against this, Learned A.R. of the assessee supported the order of learned CIT(A). He also placed reliance on a judgment of Hon'ble Apex Court rendered in the case of Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC). He also submitted that the relevant portion i.e. Para 22 of accounting standard AS-2 on valuation of inventories is available on pages 68 to 75 of the paper book and the valuation done by the assessee is in line with AS-2 and therefore, the order of CIT(A) should be approved. Regarding the judgment of Hon'ble Apex Court rendered in the case of CIT vs. British Paints India Ltd. (Supra cited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receding period i.e. from 01/04/2010 to the date of finalisation of balance sheet in the month of August, 2010. We also find that as against the actual sale price realized by the assessee during April 2010 to August 2010, the Assessing Officer has adopted the selling price realized by the assessee as on 02/04/2010 instead of average selling price during April 2010 to August 2010 for working out the net realizable value. This goes to show that the assessee has taken advantage of falling prices to reduce the value of closing stock but the A.O. has correctly valued the closing stock on the basis of market price close to 31.03.2010. Hence, in the facts of the present case, this judgment of Hon'ble Apex Court rendered in the case of Chainrup Sampatram vs. CIT (Supra) is also not applicable. 7. Now, we consider the purpose of valuing the closing stock at market price if it is lower than cost. This concept is to book loss, if any, which has taken place up to the balance sheet date due to fall in price up to that date. This cannot be stretched to include future losses because of fall in price after the balance sheet date because that loss is of the next year and should be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increased in the present year. We direct the A.O. to give this consequential benefit to the assessee in the next year if not already given. 11. Ground No. 2 is as under: 2. The Commissioner of Income-tax (Appeals), Lucknow has erred in law and on facts of the case in deleting the addition made by the Assessing Officer of ₹ 1,00,000/- on account of Transportation and installation charge. During the assessment proceeding Assessing Officer has observed that the assessee has not debited transportation and installation charges in the profit and loss account. The CIT(A) has not appreciating the facts brought in the light by the Assessing Officer and restricted the addition of ₹ 50,000/-. 12. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). 13. We have considered the rival submissions. We find that an estimated addition of ₹ 1,00,000/- was made by the Assessing Officer in respect of transportation charges allegedly paid by the assessee in respect of old plant machinery purchased by the assessee during the present year. Against this addition of ₹ 1,00,000/- made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure on transportation of old Plant Machinery purchased from a neighboring party, the action of Ld. CIT(A) in sustaining addition to the extent of ₹ 50,000/- is wholly unjustified on the facts of the case. 18. It was submitted by Learned A.R. of the assessee that in absence of any material or evidence, the finding of the Assessing Officer that the assessee has incurred expenditure on account of transportation and installation of plant machinery, the CIT(A) was not justified in sustaining the addition of ₹ 50,000/-. 19. Learned D.R. of the Revenue supported the assessment order. 20. We have considered the rival submissions. We find that a clear finding has been given by learned CIT(A) that the assessee could not produce any evidence in support of its claim that the assessee did not incur any expenditure on transportation of old plant machinery and the same was delivered by the supplier free of cost. Considering these facts, we do not find any reason to interfere in the order of CIT(A) on this issue. Ground No. 2 is rejected. 21. Ground No. 3 is as under: 3. Because with regard to valuation of closing stock of sugar, the reliance placed by the ..... 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