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TMI Blog2020 (6) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... find no merit in the methodology adopted by the assessee in valuing its closing stock. On the other hand, the Assessing Officer had applied the G.P. rate of 9.22% in order to compute the value of closing stock i.e. sale value less 9.22%. We are of the view that the value of closing stock as computed by the Assessing Officer needs to be accepted as such. However, same method is to be applied for valuation of opening stock, which is to be re-determined by reducing the value of opening stock by 9.22%. It is an admitted position that same rate needs to be applied to compute the value of opening stock and/or closing stock. It may also be pointed out that the value of closing stock as on the close of the year would be the value of opening stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he original grounds as raised in the Memo of Appeal, the action of the CIT(A) in not directing the Assessing Officer to compute the opening stock of the succeeding year consistent with the valuation of closing stock as proposed by him in assessment in the subject year is arbitrary and fallacious. It is prayed that requisite directions to the effect be kindly issued by the Hon ble Tribunal. 4. The issue raised by the assessee is against the addition of ₹ 2.90 crores (approx.) on account of valuation of closing stock. The additional ground of appeal raised by the assessee does not require any investigation into the facts, hence is admitted. 5. Briefly in the facts of the case the assessee had furnished return of income declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame against which the assessee is in appeal before us. 6. The Ld.AR for the assessee pointed out that raw material was valued at cost but the finished goods/semi finished goods were valued at sale price rate minus 25%, to compute the value of closing stock. He further pointed out that the Assessing Officer had applied G.P. rate @ 9.22% to work out the value of closing stock. He thus stated that the additional ground of appeal has been raised that the closing stock should be the opening stock of next year. He also stressed that in case the method of valuation of closing stock is revised then the value of the opening stock also needs revision. In the alternate, he pointed out that in case the value of closing stock declared by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee before us is that where consistent method has been followed from year to year then the same should not be disturbed. However, the assessee is unable to point out the basis for adopting 25% as the benchmark for working out the value of closing stock; though, the said benchmark was applied from year to year but the same has no basis. Accordingly, we find no merit in the methodology adopted by the assessee in valuing its closing stock. On the other hand, the Assessing Officer had applied the G.P. rate of 9.22% in order to compute the value of closing stock i.e. sale value less 9.22%. We are of the view that the value of closing stock as computed by the Assessing Officer needs to be accepted as such. However, same method is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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