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TMI Blog2022 (2) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, "B" Bench, Kolkata (in short the 'Tribunal') in ITA No.2127/Kol/2016 for the assessment year 2011- 12. The revenue has raised the following substantial questions of law for consideration : "I) Whether on the facts and circumstances of the case, the Learned Income Tax Appellate Tribunal has erred in law in confirming deletion of Rs. 14,43,06,905/- made by the order of the Learned Commissioner of Income Tax (Appeals), which amount was added by the Assessing Officer on account of difference in stock valuation as the assessee unlawfully followed the Last In First Out (LIFO) method of accounting for valuation of closing stock in violation of the accounting Standard-2 ? II) Whether on the facts and circumstances of the case, the Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter. In the assessment order, the survey report has been extensively extracted and the crux of the same is an alleged admission by the assessee admitting a stock difference of Rs. 8,82,68,862/- and agreeing to pay a sum of Rs. 3 crores as additional advance tax. The assessing officer would state that out of the admitted amount only a sum of Rs. 1 crore has been paid and, therefore, the assessment was taken up for consideration and the assessing officer faulted the assessee in not arriving at the value of the stock by applying the First in First out (FIFO) method and instead of which the assessee adopted the Last in First out (LIFO) method. After noting the factual details, the assessment was completed. Aggrieved by the same, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of search and seizure and survey operation. It is submitted that in the said circular the Board has categorically spelt that no attempt should be made to obtain confession as to undisclosed income when search and seizure or survey operation is being conducted. After having elaborately heard the learned counsels for the parties and carefully considering the arguments and the materials of record, we find that the assessing officer could not have based his conclusion solely on the alleged admission of the director of the assessee during the survey operations. At this juncture, it would be relevant to take note of the circular issued by the CBDT which reads as follows: "Instances have come to the notice of the Board where assessees have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee's own case in the respect of the assessment year 2009-10, the matter travelled upto the tribunal and the method of valuation of closing stock adopting LIFO method was approved. Therefore, the tribunal concluded that consistency has to be maintained in the matter. Learned counsel for the appellant would vehemently contend that in terms of the statutory rule, the accounting standard as prescribed under the rule ought to have been followed. The learned counsel submits that it is mandatory for the assessee to follow the Accounting Standard -2 in terms of the relevant rules from the year 1999 and the relevant rules of the year 2006 is applicable. Section 145 of the Act deals with the method of accounting. Sub-Section (1) of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the closing stock done adopting LIFO method was approved. Therefore, in our considered view, the tribunal was right in affirming the order passed by the CIT(A). An identical issue came up for consideration in the case of Commissioner of Income Tax vs. Sharad Mohanlal Shah reported in [2019] 108 taxmann.com 353 (Guj.) wherein it was held that the assessee therein was following the LIFO method and the CIT(A) therein as well as the tribunal concurrently held that such method was already recognised in law and in any case consistently followed in several orders and, therefore, the appeal filed by the revenue was dismissed. The Special Leave Petition filed before the Hon'ble Supreme Court was dismissed as reported in [2019] 108 taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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