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TMI Blog2017 (3) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... odowns in the places where the branches and the sub-branches of assessee are located. Tribunal found that during the last years where the said method of accounting had affected the assessee, the assessee did not change the method of valuation and even the Revenue did not point out the said fact to the assessee. The Tribunal rightly held that merely because the change of the method would help the Revenue in a particular year, the Assessing Officer is not at liberty to change the method of valuation that was followed by the assessee for a considerably long period. In the instant case, the assessee has not claimed that he was adopting the method of 'last in and first out' and the assessee had stated that it was possible for some time, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e average cost as the assessee was liable to apply the method, i.e., First in First out and first utilize the Tendu leaves that were secured by the assessee in the earlier point of time for manufacturing of the Bidis. The Assessing Officer issued a show-cause notice to the assessee and after considering the reply of the assessee came to a conclusion that the pattern of consumption of the raw material showed that the opening stock was being consumed in the first few months from the earlier purchases. It was further observed that since Tendu Patta is a commodity, that is, perishable, it would be but natural for the assessee to consume Tendu Patta, that is, purchased earlier, first in point of time and then use the Tendu Patta purchased later. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned Counsel for the Revenue submitted that the 'average price principle' could not have been applied to the case of the assessee only because the assessee was following the said method of valuation in the regular course of his business. It is submitted that if the method followed by the assessee would adversely affect the Revenue, it would be permissible for the Revenue to challenge the average price principle followed by the assessee. The learned Counsel relied on the judgment of the Hon'ble Supreme Court in the case of Commissioner of Income Tax...Versus...British Paints India Ltd., reported in Vol. 188 Income Tax Reports, page 44 to substantiate his submission. It is submitted that since Tendu leaves is a perish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has rightly considered the aforesaid facts for deciding the matter in favour of the assessee. It is submitted that a similar question like the one involved in this case came up for consideration before the Madhya Pradesh High Court and it was held by the said High Court that the method of 'last in and first out' is also a recognized method of accountancy and if the value of the stock is computed on the basis of the average, no question of law arises for calling for the statement of the case from the Tribunal. It is submitted that the findings recorded by the Tribunal do not give rise to any substantial question of law and hence, the application is liable to be dismissed. We do not find any force in the submissions ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id difficulty, the assessee showed the valuation of opening and closing stock at average cost. The assessee did not follow the said method of valuation only for the relevant assessment year but was following the said system of valuation from year to year and in the preceding years the said system of valuation was accepted. Even in the subsequent year the same method of accounting was accepted by the Revenue. The Tribunal recorded a finding of fact on the basis of the material on record that no fault could be found with the method of valuation, by applying the 'average price principle'. The Tribunal found that in some years, by adopting the method of average price principle, even the assessee would have been adversely affected. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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