M/s Roopshree Jewellers (P) Ltd Vs ITO (ITAT Kolkata)
We find that the assessee had duly reflected in the audited financial statements under Significant Accounting Policies with regard to inventory valuation as under:-
Gold : At cost including making charges under LIFO method
Diamond : At cost or net realizable value whichever is lower under LIFO method
Pearl & Emerald : At cost under LIFO method
We find that the said accounting policy is part and parcel of the audited financial statements which has been approved by the shareholders in the general body meeting. It is not in dispute that the assessee had been following LIFO method regularly for valuation of closing stock since its inception. It is not in dispute that the LIFO method adopted by the assessee had been accepted by the revenue in the past. It is not in dispute that the LIFO method is also one of the recognized methods for valuation of closing stock. The ld AO had observed that as per AS-2 issued by ICAI, the assessee is not permitted to adopt LIFO method for valuation of closing stock.
The ld AR pleaded before us that the LIFO method is also recognized in AS-2 and in this regard , he placed reliance on the decision of Pune Tribunal in the case of Sandvik Asia vs DCIT reported in 69 ITD 59.
