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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 ..... ngaged in the manufacturing and sale of the Bidis. For the assessment year under consideration, the assessee had filed the return on 31.12.1990 and a revised return was filed on 30.12.1991 declaring some additional income. For conducting the business of manufacturing and sale of Bidis, the assessee had branches in Gondia, Tumsar, Tiroda, Parashioni and Chakradharpur. The Assessing Officer noted while considering the case of the assessee, that the assessee was showing the valuation of opening and closing stock of the raw material (Tendu leaves) at average cost. According to the Assessing Officer, the assessee could not have shown the valuation of the opening and closing stock at the average cost as the assessee was liable to apply the metho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee so as to determine the true profits for tax purposes" and also "whether the assessee could have applied the average price principle" to the High Court under Section 256 (1) of the Act for decision. The Tribunal, however, rejected the application filed by the Revenue after holding that the findings recorded by the Tribunal were pure finding of facts and a substantial question of law did not arise for being referred to the High Court for a decision. After the application made by the assessee under Section 256 (1) of the Act was rejected by the Tribunal, the Revenue has filed this application before the High Court under Section 256 (2) of the Act. Shri Bhattad, the learned Counsel for the Revenue submitted that the 'av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was accepted by the Department. It is submitted that even in the next assessment year, the Revenue has accepted the method of valuation based on 'average price principle'. It is submitted that the assessee was having several branches and sub-branches at various places and it was not possible for the assessee to precisely use the raw material purchased at the earlier point of time first in point of time for the purpose of manufacturing. It is submitted that the 'average price principle' is not a flawed principle and it is used not only by the assessee but by several others dealing in the business of manufacturing of Bidis. It is submitted that the Tribunal has rightly considered the aforesaid facts for deciding the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to consume the stock of Tendu leaves secured by the assessee first in point of time for the purpose of manufacturing of Bidis. It is possible that some times the stock secured by the assessee at a later point of time could be consumed by the assessee, first in point of time and stock secured by the assessee at earlier part of the year could be consumed by the assessee a little later. In view of the aforesaid possibility, which arises out of the practical difficulty, the assessee was not in a position to scrupulously follow the First in First out method and some times, the method of last in and first out was followed by the assessee. In view of the said difficulty, the assessee showed the valuation of opening and closing stock at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he was adopting the method of 'last in and first out' and the assessee had stated that it was possible for some time, in view of the practical difficulty that the Tendu leaves purchased subsequently could be utilized first and vice versa. The finding of facts recorded by the Tribunal do not give rise to any substantial question of law. The Madhya Pradesh High Court has held in almost similar set of facts that no question of law arises for calling for the statement of the case from the Tribunal. The judgment, reported in Vol 188 Income Tax Reports, page 44 and relied on by the learned Counsel for the Revenue has no application to the case in hand. In the circumstances of the case, we dismiss the Income Tax Application filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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