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TMI Blog1983 (2) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the closing stock at cost. According to the ITO, he had noticed that the assessee had valued the opening stock at the market price while it had valued the closing at cost. According to the ITO, the assessee had, thus, changed the method of valuation of the stock adopting the cost price of closing stock. The ITO worked out that the assessee had undervalued the closing stock of Rs. 63,690. He, therefore, included this amount in the total income of the assessee. 3. In appeal before the CIT(A), it had submitted on behalf of the assessee that, since under the law the assessee is entitled to value on the stock at market price or at cost whichever is low, the ITO was not justified in making the addition of Rs. 63,690 in the manner he did. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the various written submissions made before the ITO during the course of assessment proceedings in order to support his contention that the CIT(A) had rightly deleted the addition of Rs. 63,690. In particular the ld. counsel for the assessee invited our attention to page 9 of his paper book containing market quotations and pointed out that the cost price of the closing stock was always lower than the market price. 5. We have carefully considered the rival submissions of the parties as well as the material placed before us and we do not find any merit in the submissions made on behalf of the revenue. In our view, the CIT(A) has given very cogent and valid reasons for accepting the stand taken on behalf of the assessee. Again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public are not substantially interested as according to him 60% of the shares of the assessee company were held by 5 or less persons. The assessee in its letter dt. 22 November 1977, stated before the ITO that in determining this issue the shares held by the cousin brothers and sisters of Shri Jyoti Prakash Maskara should not be considered as they do not fall within the definition of "relative" contained in s. 2(41) of the Act. The ITO, however, did not accept the stand taken on behalf of the assessee as he was of the view that cousin brothers and sisters would also fall within the definition of "relative". The ITO, therefore, framed the assessment on the assessee treating it as a company in which the public were not substantially intereste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 433 . . . . . . Total . 4630 "4.4. This is less than 50% of the total shareholding which was 10,751 shares at the relevant time. I do not agree with the view of Income-tax Officer that for the definition of the terms "relative" in the context of some what penal provisions of Income-tax Act levying higher rate of taxation on company in which public are not substantially interested included cousins also. Term brother will not include cousins in its natural sense. "Brother" is a male human being considered in his relation to another person having the same parent or having one parent in common. It is in this sense that the term brother has been used in s. 2(41), it cannot include cousin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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