Case Law Details
Keshri Export Vs ITO (ITAT Surat)
Introduction: The Keshri Export vs. ITO (Income Tax Officer) case, as heard by the Income Tax Appellate Tribunal (ITAT) Surat, pertains to the Assessment Year 2017-18. This case revolves around the dispute concerning the valuation of closing stock and whether the assessing officer had the authority to make additions to the value of the closing stock without rejecting the books of account maintained by the assessee.
Background and Assessment: The case begins with the filing of the return of income by the assessee, Keshri Export, for the Assessment Year 2017-18. The return declared a total income of Rs. 6,72,826. The Income Tax Department subsequently selected the case for scrutiny, and notices were issued to the assessee under various sections of the Income Tax Act.
Valuation of Closing Stock: During the assessment, the assessing officer focused on the valuation of closing stock, particularly the discrepancy in the valuation method used by the assessee. The assessee had valued its closing stock of finished goods at a lower rate per carat than the opening stock, resulting in a difference.
Assessing Officer’s Decision: The assessing officer, in response to the discrepancy in valuation, made an addition to the assessee’s income. This addition was based on the assumption that the closing stock should have been valued at the same rate per carat as the opening stock.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
