The ITO, Ward-1, Anand V. M/s. Doshi & Sons, Anand

ITA 2257/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6202 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHRY
• Assessee Lawyers: B T THAKKAR
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI D K TYAGI,JM & SHRI A N PAHUJA, AM ITA NO.2257/AHD/2009 (ASSESSMENT YEAR:-2006-07) INCOME-TAX OFFICER, WARD- 1,2 ND FLOOR, SP COMPLEX, MAYFAIR ROAD ,NEAR OLD CK HALL, ANAND V/S M/S DOSHI & SONS, P.B. NO. 14, SUBHASH ROAD, ANAND PAN: AABFD 8205 F [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI M R CHAUDHRY, DR ASSESSEE BY:- SHRI B T THAKKAR, AR O R D E R A N PAHUJA: THIS APPEAL FILED ON 22.7.2009 BY THE REVENUE AGAI NST AN ORDER DATED 7-05-2009 OF THE LD. CIT(APPEALS)-IV , BARODA FOR THE ASSESSMENT YEAR 2006-07, RAISES THE FOLLOWING GROUN DS:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF COMMISSION OF RS.1,57,500/- OVERLOOKING THE FACT THAT PAYMENT MADE TO ESSAR POLYMERS, WAS FALLING WITHIN THE AMBIT OF SECTION 40A(2 )(B) OF THE INCOME TAX ACT, 1961, WHO HAD NOT RENDERED ANY SERVICE IN LIEU OF THE COMMISSION. [2] THE CIT(A) ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE OF TELEPHONE EXPENSES OF RS.1,02,536/- TO RS.50,000/- AND DELETING SALARY EXPENSES OF RS.78,000/- THOUGH NO PROPER JUSTIFICAT ION FOR INCURRING SUCH EXPENDITURE WAS GIVEN DURING THE ASSESSMENT PROCEEDINGS. [3] THE CIT(A) ERRED IN DELETING THE ADDITION ON CLO SING STOCK AMOUNTING TO RS.7,81,248/- IGNORING THE FACT THAT TH ERE WAS INHERENT CONTRADICTIONS IN THE WRITTEN SUBMISSIONS. [4] THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR ALTE R THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL. THE ORDER OF THE CIT(A) ON THE ISSUES RAISED IN THE AF ORESAID GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2 ITA NO.2257/AHD/2009 2. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, F ACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INC OME OF RS.2,99,900/- FILED ON 02-11-2006 BY THE ASSESSEE, MANUFACTURING CASEIN, AFTER BEING PROCESSED ON 19-02-2007 U/S 143 (1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS TH E ACT], WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 15-11-2007.DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE ASSESSEE, INTER ALIA, PAID AN AMOUNT OF RS.1,57,500/- TOWARDS COMM ISSION TO M/S ESSAR POLYMER, A PERSON FALLING U/S 40A(2)(B) OF T HE ACT. TO A QUERY BY THE AO, THE ASSESSEE REPLIED THAT M/S ESSAR POLY MER HAD A STRONG MARKETING RESEARCH AND GOOD REPO WITH ASIAN PAINTS. THE AO, HOWEVER, DID NOT ACCEPT THE SUBMISSION OF THE ASSE SSEE ON THE GROUND THAT THE CONFIRMATION FILED BY THE ASSESSEE OF M/S ESSAR POLYMER REVEALED THE SAME TELEPHONE NUMBER AND MOBI LE NUMBER ,WHICH APPEARED IN THE LEDGER ACCOUNT OF TELEPHONE EXPENSES FOR THE MUMBAI OFFICE OF THE ASSESSEE. IN ORDER TO ASCERTAI N THE GENUINENESS OF COMMISSION PAYMENT, A NOTICE U/S 133 (6) OF THE ACT WAS ISSUED TO M/S ESSAR POLYMER. HOWEVER, THE REPLY OF M/S ESSAR POLYMER WAS EVASIVE AND DID NOT CONTAIN THE DETAILS REQUIRED BY THE AO IN THE NOTICE. IN FACT, M/S ESSAR POLYMER WAS OW NED BY ONE OF THE PARTNER, SHRI YOGESH RASHIKBHAI DOSHI (HUF) OF THE ASSESSEE. ACCORDINGLY, THE AO CONCLUDED THAT THE COMMISSION PAYMENT TO ONE OF THE PARTNER IS NOTHING BUT A BOGUS EXPENSE AND H AS NOTHING TO DO WITH STRONG MARKETING RESEARCH AND GOOD REPO WITH A SIAN PAINTS AS CLAIMED BY THE ASSESSEE. THEREFORE, THE AMOUNT OF R S.1,57,500/- WAS DISALLOWED. 3. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITI ON IN THE FOLLOWING TERMS:- 2.2 I HAVE CONSIDERED THE SUBMISSIONS. IN APPELLANT'S BUSI NESS, BULK ORDERS ARE OBTAINED THROUGH COMMISSION AGENTS. ESSAR POLYM ERS WAS 3 ITA NO.2257/AHD/2009 APPELLANT'S COMMISSION AGENT IN RESPECT OF ORDERS OF ASIAN PAINTS, A MAJOR CUSTOMER. SALES ORDER-WISE DETAILS OF COMMISSION WORKINGS WE RE FILED BEFORE THE ASSESSING OFFICER. IN RESPONSE TO INQUIRY U/S. 13 3(6), ESSAR POLYMERS CONFIRMED THAT IT ACTED AS COMMISSION AGENT. IN LETTER DATED 16- 12-2008 OF ESSAR POLYMERS ADDRESSED TO THE A.O., IT WAS ST ATED THAT ESSAR POLYMERS WAS IN THIS BUSINESS FOR LAST 15 YEARS HAVING BUSINESS RELATIONS AND KNOWLEDGE OF MARKETING FOR THE PRODUCT, CASEIN FOR T HE PAINT INDUSTRY. INCOME TAX ASSESSMENT ORDER ALONG WITH COPY OF RETURN OF I NCOME OF ESSAR POLYMERS WERE ALSO SUBMITTED TO THE ASSESSING OFFICER. A.O .'S OBSERVATION REGARDING COMMON TELEPHONE NOS. FOR ESSAR POLYMERS AND A PPELLANT'S MUMBAI OFFICE HAVE BEEN SATISFACTORILY ADDRESSED TO BY THE A PPELLANT. IN ANY CASE, THIS COULD NOT BE A REASON FOR HOLDING THAT COM MISSION PAYMENT WAS BOGUS. TO SUM UP, THERE WAS NO VALID REASON TO DISALL OW THE COMMISSION. ADDITION OF RS.1,57,500/-IS DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASS ESSEE SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE DETAILS OF COMMISSION PAID AND THE SALES WITH QUANTITY, FOR WHICH COMMISSION WAS PAID TO THE RECIPIENT , WERE PLACED BEFORE THE AO. IN RESPONSE TO A NOTICE U/S 133(6) OF THE ACT, THE R ECIPIENT M/S ESSAR POLYMERS, A PROPRIETORSHIP FIRM BELONGING TO YOGESH R ASIKLAL DOSHI (HUF), OWNING OFFICE AT MUMBAI AND HAVING OVER 15 YEARS OF EXPERIENCE, CONFIRMED HAVING RECEIVED THE COMMISSION. THE RECIPIENT WAS REGULAR LY ASSESSED TO TAX AT MUMBAI WHILE TAX WAS DEDUCTED AT SOURCE FROM THE COMMISSI ON AND PAYMENT HAD ALSO BEEN MADE BY ACCOUNT PAYEE CHEQUES. SINCE SIMILAR COMM ISSION PAID FOR IN SEVERAL YEARS IN THE PAST HAD BEEN ALLOWED BY THE AO I N THE PRECEDING ASSESSMENT YEARS AND M/S ESSAR POLYMERS WAS PAID COMMISSION IN RESPECT OF ORDERS OF ASIAN PAINTS, THE LD. CIT(A) ALLOWED THE CLAI M. THE RENDERING OF SERVICE BY THE SAID COMMISSION AGENT WAS NOT DOUBTED BY THE AO IN THE YEAR UNDER CONSIDERATION . THESE FACTS WERE NOT DISPUTED BY THE RE VENUE. THE LD. DR DID NOT PLACE ANY MATERIAL BEFORE US IN ORDER TO CONTROV ERT THE AFORESAID FINDINGS OF THE LD. CIT(A) SO AS TO ENABLE US TO TAKE A DIFFEREN T VIEW IN THE MATTER. IN THESE 4 ITA NO.2257/AHD/2009 CIRCUMSTANCES, WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE FINDINGS OF THE LD. CIT(A).THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSE D. 6. GROUND NO.2 IN THE APPEAL RELATES TO DISALLOWAN CE OF TELEPHONE EXPENSES AND SALARY EXPENSES. THE AO NOT ICED THAT THE ASSESSEE HAD TWO OFFICES ONE AT ANAND AND OTHER AT MUMBAI. THE COMPARATIVE EXPENSES OF THESE OFFICES REVEALED AS U NDER: EXPENSES ANAND MUMBAI ELECTRICITY 88,389/- 17,934/- INSURANCE PREMIUM 38,545/- 19,489/- POSTAGE & COURIER 5,870/- 13,477/- SALARY 2,20,459/- 78,000/- TELEPHONE 57,574/- 1,02,536/- SINCE ALL THE MAJOR ACTIVITIES HAPPENED AT ANAND O FFICE AND THE FACTORY WAS ALSO SITUATED AT ANAND, THE AO ASKED TH E ASSESSEE TO ESTABLISH GENUINENESS OF EXPENSES AT MUMBAI OFFICE SINCE THE ASSESSEE DID NOT FURNISH RELEVANT DETAILS WHILE THE TELEPHONE NUMBERS APPEARING IN THE LEDGER ACCOUNT OF TELEPHON E EXPENSES HAPPENED TO BE TELEPHONE NUMBERS OF SHRI YOGESH R. DOSHI, THE AO CONCLUDED THAT THESE EXPENSES DID NOT RELATE TO THE BUSINESS ACTIVITY OF THE ASSESSEE. ACCORDINGLY, EXPENDITURE OF RS.1, 80,536/- TOWARDS SALARY AND TELEPHONE AT MUMBAI OFFICE WERE DISALLO WED. 7. ON APPEAL, THE LEARNED CIT(A) DELETED THE DISALL OWANCE WITH THE FOLLOWING OBSERVATIONS:- 3.2 I HAVE CONSIDERED THE SUBMISSIONS. IN LETTER DATE D 17-12-2008 TO THE ASSESSING OFFICER, IT WAS SUBMITTED BY THE APPELLANT THAT SHRI R.M. DOSHI, TO WHOM SALARY OF RS.78,000/- WAS PAID WAS ATTEND ING MUMBAI 5 ITA NO.2257/AHD/2009 OFFICE, AND HE HAD BUSINESS EXPERIENCE FOR 15 YEARS. IT W AS EXPLAINED THAT HE KEPT TRACK OF MARKETING TRENDS AND ADVISED THE FIRM ON INVENTORY PROCUREMENT. SHRI R.M. DOSHI WAS ASSESSED TO TAX AND WAS SHO WING THE SALARY RECEIVED FROM THE APPELLANT IN HIS INCOME TAX RETU RN. THERE WAS THUS NO JUSTIFICATION FOR MAKING DISALLOWANCE OF THE SALARY PAI D AT MUMBAI OFFICE. IN THE SAME LETTER OF APPELLANT, I.E. DATED 17.12.2 008, IT WAS ALSO SUBMITTED THAT MUMBAI OFFICE WAS ALSO FOR DEVELOPING SOUTH INDIA MARKETING AND FOLLOW-UP FOR TIMELY PAYMENT FROM VARIOUS PARTIES, INCLUD ING ASIAN PAINTS. IN VIEW OF THIS, A.OS OBSERVATION THAT APPELLANT DID NO T FURNISH REPLY TO HIS QUERY ABOUT MUMBAI OFFICE'S ACTIVITIES IS NOT CORRECT. WHEN THE MUMBAI OFFICE WAS FUNCTIONING FOR APPELLANT'S BUSINESS, TELEPHON E EXPENSES WOULD NATURALLY BE INCURRED AND HAVE TO BE ACCEPTED AS FOR B USINESS. HOWEVER, SINCE THE TELEPHONE AT MUMBAI OFFICE WAS ALSO SHARED BY E SSAR POLYMERS, THE EXPENDITURE WAS NOT EXCLUSIVELY FOR APPELLANT 'S BUSINESS. OUT OF THE TELEPHONE EXPENSES OF RS.1,02,536/-, RS.50,0 00/- IS CONSIDERED AS TOWARDS ESSAR POLYMERS' WORK. DISALLOWANCE OF RS.1,80, 536/- IS UPHELD TO THE EXTENT OF RS.50,000/- ONLY AND THE BALAN CE IS CANCELLED. 8. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASS ESSEE SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AS IS APPARENT FROM THE AFORECITED UNDISPUTED FACTS, TH E ASSESSEE PLACED BEFORE THE LD. CIT(A) THE RELEVANT DETAILS SUB MITTED BY THEM TO THE AO IN THEIR LETTER DATED 17-12-2008,REVEALING ACTIVITIE S DONE BY MR. R.M. DOSHI, WHO PROVIDED SERVICES FROM MUMBAI OFFICE. EV EN THOUGH AO ALLOWED EXPENSES ON TRAVELLING, STATIONERY, OFFICE EXPENSES, CONVEYANCE ETC. INCURRED IN MUMBAI OFFICE, ONLY EXP ENSES TOWARDS SALARY AND TELEPHONE WERE DISALLOWED. THE LD. CIT(A ) FOUND THAT SHRI R.M. DOSHI, HAVING EXPERIENCE OF 15 YEARS ,KEP T TRACK OF MARKETING TRENDS AND ADVISED THE FIRM ON INVENTORY PROCUREMENT. SHRI R.M. DOSHI WAS ASSESSED TO TAX AND WAS SHOWING THE SALARY RECEIVED FROM THE ASSESSEE IN HIS RETURN. ACCORDIN GLY, THE LD. CIT(A) DELETED THE DISALLOWANCE OF SALARY. AS REGARDS TELE PHONE EXPENSES, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO RS. 5 0,000 INCURRED BY M/S ESSAR POLYMERS. THE REVENUE DID NOT PLACE ANY MATERIAL BEFORE US, CONTROVERTING THESE FINDINGS OF FACTS RE CORDED BY THE LD. 6 ITA NO.2257/AHD/2009 CIT(A) . IN THE ABSENCE OF ANY BASIS, WE ARE NOT IN CLINED TO INTERFERE. ACCORDINGLY, GROUND NO.2 IN THE APPEAL IS DISMISSED . 10. GROUND NO.3 IN THE APPEAL RELATES TO THE ADDITI ON OF RS.7,81,248/- TOWARDS CLOSING STOCK. THE AO NOTICED THAT THE ASSESSEE WAS ENGAGED IN MANUFACTURING ACTIVITY OF C ASEIN, A MILK BYPRODUCT, PURCHASED BY THEM FROM NEARBY VILLAGES. AFTER PROCESSING THE SAME, THE PRODUCT WAS PREPARED AS PER THE REQUI REMENT OF THE PARTY. THE MAIN PHYSICAL/CHEMICAL CHARACTERISTICS O F THE CASEIN WERE ACIDITY, SOLUBILITY AND VISCOSITY AND ON THIS BASIS THE QUALITY OF THE PURCHASES WAS DECIDED. TO A QUERY BY THE AO, THE AS SESSEE EXPLAINED THAT THAT THE FIRM MARKED THE PURCHASE LOT A ND TOOK PHYSICAL STOCK AT THE END OF EACH YEAR AND THE VALUE ADOPTED BASED ON T HE PURCHASE PRICE. THE ASSESSEE FURNISHED FOLLOWING WORKING OF THE CLOSING STOCK B EFORE THE AO : CLOSING STOCK AS ON 31/03/2006 LOT NO. DATE OF PURCHASE QTY. IN KG. RATE IN KG. AVERAGE RATE AVERAGE COST 1 29-03-2006 1000 235 235 235000 TOTAL 1000 2 04-01-2006 1250 149.4 160 1496160 25-01-2006 200 153.5 22-12-2005 5130 162.4 25-11-2005 1921 154.35 06-12-2006 850 188 TOTAL 9351 3 07-03-2006 2143 133 135 130135 24-03-2006 3833 141.5 28-03-2006 4025 129.3 TOTAL 10001 4 01-03-2006 3235 72.25 86 929359 04-01-2006 2860 72.3 12-12-2005 1136.5 100.2 7 ITA NO.2257/AHD/2009 06-12-2005 840 101.25 25-11-2005 2735 102 TOTAL 10806.5 5 11-11-2005 3354 51.5 60 1099440 18-10-2005 10487 49 01-10-2005 4483 101.25 TOTAL 18324 6 01-03-2006 3622 39.6 38 989748 24-03-2006 4025 39.6 29-03-2006 2100 38.5 03-02-2006 3422 39.6 20-02-2006 3530 40.7 19-01-2006 3690 39.6 14-12-2005 1901 42.5 26-12-2005 3756 39.6 TOTAL 26046 TOTAL 75528.5 6099842 10.1 SINCE THE AFORESAID WORKING REFLECTED EXCESS CASEI N OF 2,208 KGS WORTH RS.L,60,533 /-, THE AO ASKED THE ASSESSEE TO EXPLAIN. SINCE THE ASSESSEE DI D NOT FURNISH THE DETAILS REGARDING INWARD, CONSUMPTION AND O UTWARD OF CASEIN AS ALSO WAS NOT ABLE TO EXPLAIN THE DIFFERENCE IN CLOSING STOCK OF RS.1,60,533/- OF 2,208 KGS CASEIN, THE AO ADDED AN AMOUNT OF RS. 7,81,248/- , INCLUDING THAT OF EXCESS CASEIN OF 2208KGS. WORTH RS.2,02,385(2208X91.66), CALCULAT ED AS UNDER: STOCK AS DISCUSSED ABOVE 67,20,557/- STOCK AS PER ASSESSEE 59,39,309/- UNDER VALUE OF CLOSING STOCK 7,81,248/- . 11. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDIT ION IN THE FOLLOWING TERMS:- 4.2 I HAVE CONSIDERED THE SUBMISSIONS. THE EXCESS STOCK OF CAS EIN OF 2208 KGS WAS INFERRED BY THE AO ON THE BASIS OF HANDWRIT TEN DETAILS SUBMITTED WITH LETTER DATED 22-12-2008 FILED BY THE A PPELLANT REGARDING AVERAGE PURCHASE PRICE OF DIFFERENT LOTS. THIS INFERENCE WAS MADE BY THE ASSESSING OFFICER WITHOUT GIVING AN OPPORTUNITY TO THE APP ELLANT TO EXPLAIN THE SAME. THE TOTAL QUANTITY OF CASEIN AS PER TYPED STATE MENT FOR CLOSING STOCK (ALSO FILED WITH LETTER DATED 22-12-08) WAS 73320 KGS, WHEREAS IT WAS 8 ITA NO.2257/AHD/2009 75528.500 KGS. AS PER THE HANDWRITTEN SHEET. SINCE THE HANDWRITTEN SHEET WAS FILED IN SUPPORT OF WORKING OF LOTWISE AVERAGE PURCHA SE RATE, TOTAL QUANTITY AS PER THIS SHEET WAS NOT THE TOTAL QUANTITY OF CLOSING STOCK OF CASEIN ON 31-3-2006. TOTAL QUANTITY OF CLOSING STOCK OF CASEI N WAS 73320 KGS. ONLY AS PER TYPED STATEMENT. AFTER VERIFYING THESE PAP ERS, IT IS SEEN THAN AO'S INFERENCE REGARDING EXCESS CLOSING STOCK OF CASEIN IN QUANTITATIVE TERMS TO THE EXTENT OF 2208 KGS IS NOT CORR ECT. THE APPELLANT IS FOLLOWING THE SAME METHOD OF VALUATION OF CLOSING STOCK YEA R BY YEAR, FULL DETAILS REGARDING WHICH WERE FILED. SIMILAR DETAILS FO R OPENING STOCK VALUATION WERE ALSO FILED WITH THE SAME LETTER DATED 22-12-08. WORKING PARTNER HAD ALSO EXPLAINED TO THE ASSESSING OFFICER, THE P ROCESS OF LOTWISE IDENTIFICATION FOR VALUING CLOSING STOCK. WORKING OF LOTWISE PURCHASE RATE HAD BEEN FILED. THUS, THE APPELLANT HAD FILED ALL TH E NECESSARY DETAILS IN SUPPORT OF METHOD OF VALUATION OF CLOSING STOCK FOLLOWED B Y IT. IN THIS SITUATION, THERE WAS NO JUSTIFICATION FOR DISTURBING THE METHOD OF VALUATION REGULARLY FOLLOWED FROM YEAR TO YEAR BY THE APPELLANT, IN WHICH NO DEFICIENCY WAS THERE. MOREOVER, THE A.O. HAS NOT DISTURBED THE VALUE OF OPENING STOCK AND ONLY DISTURBED VALUATION OF CLOSING STOCK. T HIS WOULD CAUSE DISTORTION IN THE PROFIT OF A PARTICULAR YEAR IN T HE CASE OF G.N. MARSHALL & CO. RELIED UPON BY THE APPELLANT, THE MUMB AI HIGH COURT HELD THAT ASSESSEE VALUING ITS CLOSING STOCK BY WRITING DOWN THE COST PRICE OF GOODS DEPENDING ON THE AGE OF STOCK IN A GRADED MANNER, WHICH WAS ACCEPTED BY THE DEPARTMENT IN ALMOST ALL THE YEARS SHOULD NOT BE DISTURBED. IN APPELLANT'S CASE ALSO, I FIND NO JUSTIFICATI ON FOR ADOPTING A DIFFERENT METHOD FROM THAT FOLLOWED BY THE APPELLAN T. ADDITION OF RS.7,81,248/- IS DELETED. 12. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASS ESSEE RELIED ON THE FINDINGS OF THE LEARNED CIT(A). 13. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE DID NOT CHANGE ITS METHOD OF V ALUATION OF CLOSING STOCK IN THE YEAR UNDER CONSIDERATION. THE SAME ME THOD IS STATED TO HAVE BEEN FOLLOWED WHILE VALUING THE STOCK EVEN IN THE PRECEDING YEARS WHILE COMPLETE DETAILS OF PURCHASES AND SALES WITH QUANTITY AS ALSO OF OPENING AND CLOSING STOCK WERE SUBMITTE D DURING THE ASSESSMENT PROCEEDINGS. THE G.P DURING THE YEAR WAS 17.52% AS COMPARED TO 12.46% IN THE PRECEDING YEAR. THE LD. CIT(A) FOUND THAT EXCESS STOCK OF 2208 KGS WAS WORKED OUT BY THE AO FROM THE 9 ITA NO.2257/AHD/2009 DETAILS SUBMITTED FOR PURCHASE OF VARIOUS LOTS IN S UPPORT OF WORKING OF RATES APPLIED FOR CALCULATING VALUE OF CLOSING S TOCK AT THE YEAR END. AS POINTED OUT BY THE LD. CIT(A), THE TOTAL QU ANTITY OF CASEIN AS PER TYPED STATEMENT FOR CLOSING STOCK FILED WITH L ETTER DATED 22-12- 08 WAS 73320 KGS, WHEREAS IT WAS 75528.500 KGS. AS PER THE HANDWRITTEN SHEET. SINCE THE HANDWRITTEN SHEET WAS FILED MERELY IN SUPPORT OF WORKING OF LOTWISE AVERAGE PURCHASE RATE , TOTAL QUANTITY AS PER THIS SHEET WAS NOT THE TOTAL QUANTITY OF CLO SING STOCK OF CASEIN AS ON 31-3-2006. TOTAL QUANTITY OF CLOSING STOCK OF CASEIN WAS 73320 KGS. AS CONCLUDED BY THE LD. CIT(A), AFTER PERUSING THE RELEVANT DOCUMENTS. SINCE THE ASSESSEE CONSISTENTLY FOLLOWED SAME METHOD OF ACCOUNTING OF STOCK EVEN IN THE PRECEDING YEARS, THE LD. CIT(A) DELETED THE ADDITION. THE LD. DR DID NOT DISPUTE TH ESE FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) NOR PLACED BEFORE US ANY MATERIAL, SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER. IN THESE CIRCUMSTANCES, WE HAVE NO HESITATION IN UPHOLDING T HE FINDINGS OF THE LD. CIT(A).THEREFORE, GROUND NO. 3 IN THE APPEA L IS ALSO DISMISSED. 14. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.4 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS DISMISSED. 15. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 15 -07-2011 SD/- SD/- ( D K TYAGI ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 15-07-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S DOSHI & SONS, P.B. NO. 14, SUBHASH ROAD, ANA ND 10 ITA NO.2257/AHD/2009 2. INCOME-TAX OFFICER, WARD-1,2ND FLOOR, SP COMPLEX , MAYFAIR ROAD ,NEAR OLD CK HALL, ANAND 3. CIT CONCERNED 4. CIT(A)-IV, BARODA 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD