Gopu Nandilath Gopalakrishnan Vs CIT -2 (ITAT Cochin)
This appeal before the Income Tax Appellate Tribunal, Cochin Bench arose from an order dated 12.08.2025 passed by the National Faceless Appeal Centre for Assessment Year 2017–18. The assessee, an individual engaged in the business of dealing in domestic appliances, filed a return of income on 03.11.2017 declaring income of ₹2,06,37,450. The assessment was completed under Section 143(3) on 27.12.2019 at a total income of ₹6,07,26,452, after the Assessing Officer made an addition of ₹3,77,16,583 on account of revaluation of closing stock.
The Assessing Officer held that the assessee had valued closing stock by excluding the VAT component and, invoking Section 145A of the Income-tax Act, revalued the closing stock by including the tax element. This adjustment was confirmed by the Commissioner of Income Tax (Appeals). Aggrieved, the assessee approached the Tribunal.
Before the Tribunal, the assessee contended that once the Assessing Officer adopted the inclusive method of valuation for closing stock under Section 145A, consistency required that the opening stock also be revalued on the same basis. Reliance was placed on a coordinate bench decision supporting this principle. The Department, however, argued that there was no requirement to disturb the opening stock.
