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TMI Blog2023 (9) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly caught the mistake of the assessee for under valuation of closing stock. We note that CIT(A) made the computation of closing stock by adopting average rate per carat, which is a superior approach as compared to the approach adopted by assessing officer. We accept the above approach adopted by CIT(A). However, we do not find any further superior approach, than the approach so adopted by CIT(A), because CIT(A), by following accounting standards, ICDS and accounting principles, granted the partial relief to the assessee. Thus, in our opinion, the assessee does not deserve further relief on the basis of the plea that assessing officer ought to have rejected books of accounts to make addition on account of under valuation of closing stock. On a careful reading of the order of CIT(A) the findings thereon, we do not find any valid reason to interfere with the decision and findings of the CIT(A), hence we dismiss the appeal of the assessee. Assessee not applicable on the facts of present case. Rejection of entire books of account was not warranted, when the AO find fault in the valuation of stock only. Appeal filed by the assessee is dismissed - Shri Pawan Singh, JM And D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal; the accountant Chintan Raval also left the organisation in 2017. Further, partner of Keshri Exports Shri Valjibhai Gabani, who was primarily responsible for looking after the accounts, administration and legal matters passed away on 10-12-2021. (6) With the other partners after taking appropriate legal advice, eventually filed the appeal before the Tribunal was field on 16-3-2023. (7) Keshri Exports confirms that in past, there has never been any delay in such filing or any compliance. (8) This affidavit is done to assert the above facts. (9) For this affidavit, e-stamp bearing e-certificate been used. 5. Based on the reasons mentioned in the above affidavit, the ld Counsel contended that delay in filing the appeal may be condoned. 6. On the other hand, ld DR for the Revenue argued that reasons mentioned in the affidavit, are not sufficient reasons to condone such huge delay. The assessee needs to explain each day of delay which the assessee has failed to do so, hence delay may not be condoned. 7. We heard both the parties on this preliminary issue. We note that primarily, delay occurred in filing the appeal is on account of that the unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Want of diligence or inaction can be attributed to an applicant/assessee only when something, required to be done by him, is not done. When nothing is required to be done, courts do not expect the applicant/assessee to be diligent. Where an appeal is admitted by the High Court and is not expected to be listed for final hearing for a few years, an assessee is not expected to visit the court regularly to ascertain the current position but await information from his counsel about the listing of the appeal. 9. We note that in assessee`s case the delay is not on account of any dilatory tactics, deliberate inaction or negligence on the part of the applicant, therefore having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 10. Briefly stated, the relevant material facts are as follows. The assessee has filed his return of income on 30.09.2017, declaring total income of Rs. 6,72,826/-. The return of income was processed u/s 143(1) of the Income Tax Act, 1961. Later on, the assessee`s case was selected for scrutiny under CASS. Accordingly, notice u/s 143(2) of the Act was issued on 28.08.2018 and duly served upon to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arrived at by the assessing officer by adopting the rate at which opening stock has been valued as under: Closing stock in quantity Total Value Rate Difference in rate Total under valuation 4826 5,12,39,523/- 10,617/- 1,227/- 59,21,502/- (4826 x 1227) Thus, an addition of Rs. 59,21,502/- was made by the Assessing Officer on account of undervaluation of closing stock. 13. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has partly deleted the addition made by the Assessing Officer. Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before us. 14. The Ld. Counsel for the assessee argued that assessing officer cannot make addition on account of valuation of closing stock without rejecting books of accounts, and relied on several case law, which we have gone through. Apart from this, ld Counsel submitted written submission, which are reproduced below (to the extent relevant for our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer may be upheld. 16. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We also considered the various decisions relied by ld. counsel for assessee. We find some merit in the tested proposition canvassed by ld DR for the Revenue that for each mistake it is not necessary for the assessing officer to reject the books of accounts of the assessee. A heavy onus is on the assessing officer to reject the audited books of accounts, if there is any mistake in the audited books of accounts or any bills, vouchers, documents or in any evidences, the assessing officer may reject such bills, vouchers, documents, and evidences and may make line by line addition, without having rejected books of accounts. While scrutinizing the expenditure u/s 143(3) of the Act, or valuation of any item, if the expenses claimed are not having any nexus to the business of the assessee or if there is deficiency in the vouchers or there is no bills supporting the incurrence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r point of time. Accordingly, I direct the Assessing Officer to adopt average rate per ct to compute the value of closing stock. The computation of closing stock by adopting average rate per ct is as under: 1 Rate per ct adopted by the Assessee to arrive value of opening stock Rs.11844 2 Rate per ct adopted by the appellate to arrive value of closing stock Rs.10617 3 Average rate per ct [(Rate per ct of opening stock + Rate per ct of Closing stock/2] [(11844 + 10617/2= 11231 Rs.11231 4 Under value of Rate per ct [Average Rate per ct (-) Rate per ct adopted by the appellate arrive value of closing stock] 614 5 Quantity of closing stock 4526 6 Total under valuation by adopting average rate per ct (Under value of Rate per ct X quantity of closing stock) Rs.29,63,164 9.10 As per above computation, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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