Case Law Details
Brief of the Case: ITAT Kolkata held In the case of Das Plaza vs. ITO that the closing stock has to be taken at the end of the year not in the middle of the year. If any addition has to be made that to be made only difference in the value as at the end of the year. If the value of the opening stock is lesser, the stock has to be valued as per the method valuation followed by the assessee.
Facts of the Case
A survey u/s 133A was conducted on the assessee. During the course of the survey, stock to the extent of Rs.7, 17,217/- was found, which was undisclosed in the opinion of the revenue. The value of the stock was taken after written the percentage of the gross profit @ 20%. The assessee submitted that the value was not correctly taken and has made the calculation on the basis of average cost method as has been regularly followed by the assessee. The Assessing Officer was not satisfied as in his opinion the average prices of the items were shown much below the rate disclosed in the opening stock and, therefore, he made the addition of Rs.7,17,217/-. Also, It was noted by the survey team that there is an excess stock of belts and bags of Rs. 42,677 and Rs.65,048/-.
Contention of the Assessee
The assessee submitted that the value was not correctly taken and has made the calculation on the basis of average cost method as has been regularly followed by him.
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