Shri Manoj Chandulal Shah, Ahmedabad V. The Jt.CIT.,Range-10, Ahmedabad

ITA 2330/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89244 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 14-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: S N DIVETIA
• Keywords: Earning of tax free income; Proportionate interest
• Section: 40A(3); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO. 2330/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2008-2009 MANOJ CHANDULAL SHAH PROP: LAXMI DYE CHEM 409, B-GANESH PLAZA OPP: NAVRANGPURA BUS STAND AHMEDABAD. PAN : AIOPS 9835 P VS JCIT, RANGE - 10 AHMEDABAD. !./ ITA NO. 2448/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2008-2009 ACIT, CIRCLE - 10 AHMEDABAD. VS MANOJ CHANDULAL SHAH PROP: LAXMI DYE CHEM 409, B-GANESH PLAZA OPP: NAVRANGPURA BUS STAND AHMEDABAD. +, / (APPELLANT) -. +, / (RESPONDENT) ASSESSEE(S) BY : SHRI S.N. DIVETIA REVENUE BY : SHRI M.K. SINGH, SR.DR / DATE OF HEARING : 23/03/2015 / DATE OF PRONOUNCEMENT: 10 /04/2015 // O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD DATED 20.7.2011. 2. THE FIRST ISSUE INVOLVED IN THIS APPEAL OF THE A SSESSEE IS REGARDING THE DISALLOWANCE OF SALES PROMOTION EXPENSES OF RS. 3,87,730/-. ITA NO.2330 AND 2448/AHD/2011 2 3. THE AO OBSERVED THAT THE ASSESSEE HAD INCURRED E XPENSES OF RS.2,31,730/- ON GOLD AND SILVER COINS, RS.1,02,000 /- ON COMPUTER BAGS AND RS.54,000/- ON CALENDARS. THE PAYMENT OF ALL THESE EXPENSES WAS MADE IN CASH. AS THE PAYMENTS WERE IN CONTRAVENTIO N OF SECTION 40A(3) OF THE ACT, ALL THE EXPENSES CLAIMED FOR SALES PROM OTION WERE DISALLOWED AND ADDED TO THE INCOME. FURTHER, THE AO ALSO CAL LED FOR DETAILS IN RESPECT OF THE PERSONS TO WHOM THE ABOVE ITEMS WERE GIVEN, AND THE SAME WERE NOT PROVIDED TO THE AO. 4. ON APPEAL, THE CIT(A) HELD THAT SINCE THE PAYMEN T MADE WAS IN CONTRAVENTION OF SECTION 40A(3) OF THE ACT, THE EXP ENDITURE OF RS.3,87,730/- WAS NOT ALLOWABLE, AND CONFIRMED THE ACTION OF THE AO. 5. BEFORE US, THE AR OF THE ASSESSEE RELIED ON THE ORDER OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ANUPAM TE LE SERVICES V. ITO, (2014) 43 TXMANN.COM 199 (GUJ) WHEREIN IT WAS HELD THAT WHERE THE PRINCIPAL COMPANY INSISTED THAT ON PAYMENT BY CHEQU E SUPPLY WOULD BE DELAYED, CASH PAYMENT MADE BY AGENT IN BANK ACCOUNT OF PRINCIPAL HAD TO BE ALLOWED. 6. ON THE OTHER HAND, DR SUPPORTED THE ORDERS OF TH E LOWER AUTHORITIES. 7. WE HAVE HEARD RIVAL SUBMISSIONS, PERUSED THE ORD ERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE F IND THAT IN THE CASE OF ANUPAM TELE SERVICES (SUPRA) THE HONBLE HIGH COURT OBSERVED THAT IN THAT CASE THE ASSESSEE WAS A DISTRIBUTOR OF RECHARG E VOUCHERS OF TATA TELE SERVICES P. LTD. THE TATA TELE SERVICES P. L TD. INSISTED FOR CASH PAYMENT AS CHEQUE PAYMENTS FROM A COOPERATIVE BANK TOOK A LONGER TIME FOR CLEARANCE. FURTHER, NON-CASH PAYMENT BY T HE ASSESSEE WOULD HAVE SEVERELY AFFECTED THE BUSINESS OF THE ASSESSEE INASMUCH AS THE SAME WOULD HAVE RESULTED IN DELAY OF SUPPLY OF RECH ARGE VOUCHERS. IN ITA NO.2330 AND 2448/AHD/2011 3 THESE CIRCUMSTANCES, IT WAS THE GENUINE EXPEDIENCY OF BUSINESS WHICH REQUIRED THE ASSESSEE TO MAKE PAYMENT IN CASH WHICH TATA TELE SERVICES P. LTD. PROMISED TO DEPOSIT IN ITS BANK AC COUNT AND NO MATERIAL WAS BROUGHT TO SHOW THAT THE SAID PROMISE WAS NOT F ULFILLED BY TATA TELE SERVICES P.LTD. IN THE ABOVE CIRCUMSTANCES, THE HO NBLE HIGH COURT HELD THAT RIGOURS OF PROVISION OF SECTION 40A(3) SH OULD NOT APPLY. 8. IN THE INSTANT CASE, WE FIND THAT NO SUCH MATERI AL COULD BE BROUGHT ON RECORD BY THE ASSESSEE. THE ASSESSEE HA S NOT BROUGHT ANY MATERIAL TO SHOW THAT THE SUPPLIER OF GOLD AND SILV ER COINS, COMPUTER BAGS AND CALENDARS HAD INSISTED FOR CASH PAYMENT AN D PAYMENT BY CHEQUE BY THE ASSESSEE WOULD HAVE SEVERELY AFFECTED THE BUSINESS OF THE ASSESSEE. IN THE ABOVE CIRCUMSTANCES, THE FACT S OF THE INSTANT CASE ARE FOUND TO BE DISTINGUISHABLE FROM THE FACTS OF T HE ABOVE CITED CASE, INASMUCH AS, THE ASSESSEE COULD NOT PROVE THE BUSIN ESS EXPEDIENCY FOR MAKING OF PAYMENTS IN CASH BY THE ASSESSEE IN EXCES S OF THE LIMIT PRESCRIBED UNDER SECTION 40A(3) OF THE ACT. WE, T HEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE FINDINGS OF T HE CIT(A). THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. THE SECOND ISSUE INVOLVED IS REGARDING THE DISAL LOWANCE OF EXPENDITURE OF RS.4,26,837/-. 10. THE AO OBSERVED THAT THE ASSESSEE WAS IN RECEIP T OF CERTAIN EXEMPT INCOME. THE PROVISIONS OF SECTION 14A WAS I NVOKED AND THE DISALLOWANCE UNDER RULE 8D WAS WORKED OUT. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION, THE EXPENSES OF RS.4,26,8 37/- WAS DISALLOWED AND ADDED TO THE INCOME. 11. ON APPEAL, THE CIT(A) OBSERVED THAT THERE WAS N O DISPUTE ABOUT EARNING OF DIVIDEND INCOME AS DECLARED IN THE PROFI T & LOSS ACCOUNT. THE DIVIDEND INCOME IS EXEMPT FROM INCOME-TAX. NO EXP ENDITURE FOR EARNING THIS EXEMPT INCOME WAS DISALLOWED. IT WAS ADMITTED FACT THAT ITA NO.2330 AND 2448/AHD/2011 4 CERTAIN EXPENDITURE WERE INCURRED FOR EARNING DIVID END INCOME, AND THEREFORE THE PROVISION OF SECTION 14A ARE CLEARLY APPLICABLE. THE CIT(A) OBSERVED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOYCEE MFG. CO. LTD. VS. DCIT, 328 ITR 81 (BOM) HEL D THAT THE DIVIDEND INCOME AND INCOME FROM MUTUAL FUNDS FALLING WITHIN THE AMBIT OF SECTION 10(33), AS WAS APPLICABLE FOR THE ASSESSMENT YEAR 2 002-03, IS NOT INCLUDIBLE IN COMPUTING THE TOTAL INCOME OF THE ASS ESSEE, AND CONSEQUENTLY, NO DEDUCTION CAN BE ALLOWED IN RESPEC T OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO SUCH INCOME BY VIRTUE OF THE PROVISIONS OF SECTION 14A(1). HE, THEREFORE, HELD THAT THE AO WAS JUSTIFIED IN MAKING THE DISALLOWANCE OF PROPORTIONA TE EXPENSES OF RS.4,26,837/- AS COMPUTED UNDER RULE 8D OF THE IT R ULES. 12. BEFORE US, THE AR SUBMITTED THAT THE DISALLOWAN CE WAS NOT JUSTIFIED AS INVESTMENT OF RS.53,02,298/- AS ON 31. 3.2007 AND RS.81,17,311/- AS ON 31.3.2008 WAS MADE OUT OF INTE REST FREE FUNDS AVAILABLE OF RS.1,41,60,707/- AS ON 31.3.2008 IN HI S CAPITAL ACCOUNT, AND THE OPENING BALANCE OF RS.83,52,269/- AS ON 31. 3.2007 AS PER THE BALANCE SHEET. FURTHER, IT WAS ARGUED THAT ON PER USAL OF THE DETAILS OF INVESTMENT WILL SHOW THAT THE SAME INCLUDES DEPB AG GREGATING TO RS.5,36,882/-, WHICH SHOULD HAVE BEEN EXCLUDED FROM THE SAME. 13. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIE S. 14. WE FIND THAT THE DR COULD NOT DISPUTE THE CONTE NTION OF THE ASSESSEE THAT THE INTEREST FREE FUNDS AVAILABLE WIT H THE ASSESSEE WERE MORE THAN THE INVESTMENT GIVING RISE TO EXEMPT DIVI DEND INCOME. IN THESE CIRCUMSTANCES, THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DISALLOWING THE PROPORTIONATE INTEREST EXPENDITURE UNDER SECTION 14A OF THE ACT. THE ABOVE VIEW FINDS SUPPORT FROM THE DEC ISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT S TATE FERTILIZERS AND CHEMICALS LTD., (2013) 258 ITR 323 (GUJ). FURTHER, THE DR FAIRLY CONCEDED BEFORE US THAT THE DEPB SHOULD NOT HAVE BE EN TAKEN INTO ITA NO.2330 AND 2448/AHD/2011 5 CONSIDERATION FOR MAKING DISALLOWANCE UNDER SECTION 14A OF THE ACT. AS THE WORKING OF THE AMOUNT OF RS.4,26,837/- WHICH WA S DISALLOWED UNDER SECTION 14A BY THE LOWER AUTHORITIES IS NOT BROUGHT ON RECORD NOR FILED BEFORE US BY BOTH THE PARTIES, WE REMIT THE MATTER BACK TO THE FILE OF THE AO FOR RE-COMPUTING THE AMOUNT DISALLOWABLE UND ER SECTION 14A IN THE LIGHT OF THE OBSERVATIONS MADE HEREINABOVE. TH US, THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 15. THE THIRD ISSUE INVOLVED IN THIS APPEAL IS REGA RDING THE DISALLOWANCE OUT OF PERSONAL SET OF BOOKS OF RS.69, 096/-. 16. AT THE TIME OF HEARING, THE AR OF THE SUBMITTED THAT HE IS NOT PRESSING THIS GROUND OF APPEAL, AND THEREFORE, THE SAME IS DISMISSED, AS NOT PRESSED. 17. THE GROUND NO.4 OF THE APPEAL OF THE ASSESSEE A ND THE SOLE GROUND OF THE APPEAL OF THE REVENUE IS DIRECTED AGA INST THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.8,86,933/- ON ACCOUNT OF UNDER VALUATION OF STOCK AND DELETION OF ADDITION OF RS.7 ,36,983/- MADE ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK OF OTHE R ITEMS ON ESTIMATED BASIS. 18. THE AO OBSERVED THAT THE INSPITE OF REPEATED RE QUEST, THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF QUANTITY TALLY OF OPENING STOCK, MONTH-WISE PURCHASES AND SALES AND CLOSING STOCK. THE AO VERIFIED THE CORRECTNESS OF CLOSING STOCK ON THE BASIS OF SOME O F THE SALE BILLS PRODUCED IN THE CASE OF ONE ITEM BETA NAPHTHOL FO R WHICH CLOSING STOCK WAS SHOWN AT 24,425 KGS., AND THE VALUE HAD BEEN DE CLARED AT RS.22,62,243/- AND AFTER REDUCING THE GROSS PROFIT FROM THE SALE VALUE, THE COST PRICE OF THIS ITEM OF BETA NAPHTHOL WAS ARRIVED AT RS.144.330 PER KG. THE AO, THUS, ARRIVED AT UNDER VALUATION AT RS.51.71 (RS.144.330 AS PER AO MINUS RS.92.62 AS PER ASSESSE E). THE UNDERVALUATION WAS THUS DETERMINED AT RS.12,63,017/ -. SINCE THE ITA NO.2330 AND 2448/AHD/2011 6 ASSESSEE FAILED TO FURNISH THE EVIDENCES IN SUPPORT OF CLOSING STOCK, THE AO MADE ADDITION OF RS.20.00 LAKHS ON ACCOUNT OF UN DER VALUATION OF CLOSING STOCK INCLUDING THE VALUE OF BETA NAPHTHOL. 19. ON APPEAL, THE CIT(A) OBSERVED THAT THE AO AT P LACE HAD MENTIONED THAT SHRI MILAN GANDHI, CA DULY AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE ATTENDED FROM TIME TO TIME, AND PRODUC ED BOOKS OF ACCOUNTS AND FILED DETAILS, AND ON THE OTHER HAND, HE HAD ALLEGED THAT THE ASSESSEE HAD NOT FURNISHED DETAILS EVEN AFTER R EPEATED REQUESTS. ONCE THE BOOKS OF ACCOUNTS ARE PRODUCED, IT CANNOT BE ACCEPTED THAT THE CERTAIN DETAILS WERE NOT PRODUCED. THE DETAIL S CAN BE COLLECTED FROM THE BOOKS OF ACCOUNT. HE OBSERVED THAT IT WAS NOTED FROM THE AUDIT REPORT THAT NO STOCK REGISTER WAS MAINTAINED. IN THE ABSENCE OF THE STOCK REGISTER, THE CLOSING STOCK CANNOT BE ASC ERTAINED ON COST. THE AUDITOR HAD WRONGLY MENTIONED THAT THE CLOSING STOC K CANNOT BE ASCERTAINED ON COST PRICE. HE OBSERVED THAT IT IS THE SETTLED POSITION OF LAW THAT THE CLOSING STOCK CAN BE VALUED AT COST PR ICE OR MARKET PRICE WHICHEVER IS LESS. THE AO TRIED TO ASCERTAIN THE COST PRICE OF THE ITEM BETA NAPHTHOL BUT NO EXERCISE WAS CARRIED OUT IN TH E CASE OF OTHER ITEMS. HE COULD HAVE ASCERTAINED THE COST PRICE O F THE ABOVE CRUDE METHOD IN CASE OF ATLEAST MAJOR ITEMS OF STOCK. T HE AO HAD MADE THE ADDITION OF RS.7,36,983/- (RS.20,00,000/- TOTAL EST IMATED UNDERVALUATION IN CLOSING STOCK MINUS RS.12,63,017/ - CLOSING STOCK OF BETA NAPHTHOL) ON ACCOUNT OF UNDERVALUATION OF OTHE R ITEMS OF CLOSING STOCK, ROUGHLY VALUED BY THE ASSESSEE FOR RS.1,81,9 9,401/- (RS.2,04,61,644/- DECLARED STOCK MINUS RS.22,62,243 /- CLOSING STOCK OF BETA NAPHTHOL). HE OBSERVED THAT THERE ARE 25 ITE MS OF CLOSING STOCK AND OF VARYING QUANTITY. HE OBSERVED THAT IT WAS A N ADMITTED FACT THAT THE CLOSING STOCK AT THE YEAR END WILL BE THE OPENI NG STOCK OF SUCCEEDING YEAR. HE OBSERVED THAT IT WAS NOT UNDERSTOOD HOW THE AMOUNT OF RS.7,36,983/- CAN BE BIFURCATED FOR ARRIVING AT THE CORRECT VALUE OF OPENING STOCK OF SUCCEEDING YEAR. THEREFORE, HE OB SERVED THAT CLOSING ITA NO.2330 AND 2448/AHD/2011 7 STOCK CAN BE ASCERTAINED ONLY AT COST PRICE OR MARK ET PRICE WHICHEVER IS LESS, AND HELD THAT ADDITION CANNOT BE MADE ON ESTI MATE BASIS. HE OBSERVED THAT THE AO HAD NOT GIVEN ANY REASON TO UN DERVALUATION OF CLOSING STOCK OF OTHER ITEMS, AND THEREFORE, DELETE D THE ADDITION OF RS.7,36,983/-. 20. REGARDING CLOSING STOCK OF BETA NAPHTHOL OF 24, 425 KGS., HE OBSERVED THAT APPLYING THE FIFO METHOD FOR SALES, I T CAN BE REASONABLY CONCLUDED THAT THE PURCHASES OF 15,500 KGS DATED 21 .3.2008 WERE AVAILABLE IN THE CLOSING STOCK. THE BALANCE STOCK OF 8,925 KGS. (24,425 KGS. DECLARED CLOSING STOCK MINUS 15,500 KGS. PURCH ASES DATED 21.3.2008) WAS AVAILABLE OUT OF THE PURCHASES OF 10 ,500 KGS. DATED 17.3.2008. IF THE QUANTITY OF 8,925 KGS. WAS VALUE D AT 116.45 PER KG. AND ADDED TO THE VALUE OF PURCHASES DATED 21.3.2008 , THE CORRECT VALUE OF CLOSING STOCK OF BETA NAPHTHOL AT COST PRICE WOU LD BE ASCERTAINED. THE WORKING ON THIS BASIS WILL BE FOR RS.31,49,176/ -. HE OBSERVED THAT THE ASSESSEE VALUED THE CLOSING STOCK AT RS.22,62,2 43/-, THEREFORE, IT WAS UNDER VALUED BY RS.8,86,933/-, AND THEREFORE, H E CONFIRMED THE ADDITION TO THE EXTENT OF RS.8,86,933/- AND DELETED THE BALANCE AMOUNT OF ADDITION. 21. BEFORE US, THE AR OF THE ASSESSEE ARGUED THAT T HE AO HAD ARRIVED AT THE COST OF BETA NAPHTHOL AT A DERIVED VALUE BY CONSIDERING THE SALE PRICE MINUS GROSS PROFIT. THIS METHOD OF ASCERTAI NING COST IS NEITHER SCIENTIFIC NOR ACCEPTED UNDER ACCOUNTING PRINCIPLES . IT WAS SUBMITTED THAT THE GP RATE OF 4.64% WAS THE ANNUAL RATE AND T HE AVERAGE PROFIT EARNED FROM ALL THE TRANSACTIONS THROUGHOUT THE YEA R SO THAT IT CANNOT BE SAID THAT THE ASSESSEE WOULD EARN SAME RATE OF G P IN ALL THE TRANSACTIONS. THEREFORE, THE METHOD ADOPTED BY THE AO SHOULD BE REJECTED. FURTHER, IT WAS SUBMITTED THAT IT WOULD BE NOTICED FROM SOME OF THE INVOICES ANNEXED IN THE PAPER BOOK THAT THE NORMAL RATE WAS AROUND RS.107/- PER KG AND THE COST PRICE WAS NEVER RS.144.43 PER KG. ITA NO.2330 AND 2448/AHD/2011 8 AS WORKED OUT BY THE AO. THEREFORE, THERE AS NO U NDERVALUATION AS ALLEGED BY THE AO. IT WAS FURTHER SUBMITTED THAT T HE CIT(A) WAS NOT JUSTIFIED IN VALUING THE CLOSING STOCK BY APPLYING FIFO METHOD WHEN THE ASSESSEE WAS FOLLOWING AVERAGE COST METHOD. 22. ON THE OTHER HAND, THE DR SUPPORTED THE ORDER O F THE AO. 23. THE DR COULD NOT POINT OUT ANY SPECIFIC MISTAKE IN THE FINDINGS OF THE CIT(A). THE DR COULD NOT DISPUTE THE FINDINGS OF THE CIT(A) THAT THE ADDITION OF RS.7,36,983/- IN RESPECT OF CLOSING STO CK OF ITEMS OTHER THAN BETA NAPHTHOL WAS WITHOUT ANY REASON OR BASIS TO SHOW THAT THESE WERE ACTUALLY UNDERVALUED BY THE SAID AMOUNT. THUS , THE CIT(A)S FINDING IN THIS RESPECT REQUIRES NO INTERFERENCE BY US. FURTHER, IN RESPECT OF VALUATION OF CLOSING STOCK OF BETA NAPH THOL, WE FIND THAT THE AO VALUED THE SAME BY TAKING INSTANCES OF ONE SALE AS THE SALE PRICE, AND THEREFROM REDUCING THE COMPOSITE AVERAGE GROSS PROFIT RATE OF THE COMPLETED YEAR OF ALL ITEMS AS ACTUAL GP RATE OF TH E SAID INSTANCE OF SALE. NO MATERIAL WAS BROUGHT ON RECORD BY THE AO TO SHOW THAT THE ACTUAL GP RATE ACHIEVED BY THE ASSESSEE ON THAT PAR TICULAR SALE INSTANCE WAS 4.64%. 24. ON THE OTHER HAND, THE CIT(A) CALCULATED THE CO ST OF THE CLOSING STOCK OF BETA NAPHTHOL ON THE BASIS OF ACTUAL PUR CHASE PRICE ON THE BASIS OF LAST TWO INVOICES. IN THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE METHOD ADOPTED BY THE CIT(A) WAS MORE PRO PER THAN THE METHOD ADOPTED BY THE AO. WE, THEREFORE, DO NOT FI ND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. 25. IN RESPECT THE GROUND OF APPEAL OF THE ASSESSEE , WE FIND THAT THE SOLE ARGUMENT OF THE AR IS THAT THE CIT(A) VALUED T HE CLOSING STOCK OF BETA NAPHTHOL AT COST BY USING FIFO FORMULA, WHER EAS, THE CIT(A) SHOULD HAVE ADOPTED AVERAGE COST FORMULA. WE FIND THAT NO MATERIAL WAS BROUGHT BEFORE US BY THE AR TO SHOW THAT THE AS SESSEE WAS ITA NO.2330 AND 2448/AHD/2011 9 CONSISTENTLY USING AVERAGE COST FORMULA FOR VALUING ITS CLOSING STOCK AT COST. FURTHER, NO WORKING OF THE AVERAGE COST OF BETA NAPHTHOL COULD BE FURNISHED BEFORE US BY THE ASSESSEE TO SHOW THAT ANY PREJUDICE WAS ACTUALLY CAUSED TO THE ASSESSEE. IN THE CIRCUMSTAN CES, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE AS WELL. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) AND DISM ISS THE GROUND OF APPEAL OF BOTH THE ASSESSEE AS WELL AS REVENUE. 26. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE, AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 10 /04/2015 / 0 -%$12 32*$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE. / ' / BY ORDER, 4/ !5 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD