SHRI MAHENDRA VITHALDAS MAVANI,JAM-KHAMBHALIA V. THE ITO, WARD-3(2), JAMNAGAR

ITA 222/RJT/2022

AI Insights

The case involves Mahendra Vithaldas Mavani, who appealed against the order of the Learned Commissioner of Income Tax (Appeals), Jamnagar, which confirmed the additions made by the Assessing Officer under sections 143(3) and 234 of the Income-tax Act, 1961. The additions included speculative losses on the sale of groundnut oil and SEGN oil, and a difference in the valuation of stock. The Tribunal examined the circumstances leading to the delay in filing the appeal, which included the assessee's health issues and the death of key personnel, and found sufficient cause to condone the delay. On merits, the Tribunal found that the transactions were not speculative and that the stock was correctly valued.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473468 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2024
• Assessment Year: 2008-2009
• Appeal Filed On: 10-08-2022
• Other Referred Cases: M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT, Bharat Auto Center v. CIT, Pt. Krishna Rao D. Phalke v. Trimbak, Rambhagat Sao Janki Sao v. The Province of Bihar, L.E.H.U. v. A.M. Yin, Madho v. Sham, Ma Thin v. U. Bay, MOOL CHANDRA Vs. UOI & ANR.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: KALPESH DOSHI
• Keywords: Condonation of delay; Speculation loss; Period of limitation; TDS; Right to appeal; Time period of passing order; Speculative transactions
• Section: 143(1); 12A; 13; 28; 43(5); 44AB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.222/RJT/2022 (\u000bनधा\u000fरण वष\u000f / Assessment Year: (2008-09) (Hybrid Hearing) Mahendra Vithaldas Mavani, Kalpesh Doshi & Co., Chartered Accountants, 1006-09, The Spire 2, Nr. Sheetal Park BRTS Stop, 150 ft Ring Road, Rajkot – 360005 Vs. Income Tax Officer, Ward – 3(2), Jamnagar, 4th Floor, Manek Centre, Nehru Road, Jamnagar-361 008 \u0013थायीलेखासं./जीआइआरसं./PAN/GIR No.: AFUPM3060K (Assessee) (Respondent) Assessee by :Shri Kalpesh Doshi, AR Respondent by :Shri Abhimanyu Singh Yadav, Sr. DR Date of Hearing : 12/09/2024 Date of Pronouncement : 18/10/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2008-09, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Jamnagar [in short ‘the Ld. CIT(A)’] dated 27.07.2011, which in turn arises out of an assessment order passed by the Assessing Officer (in short, ‘assessing officer’) u/s 143(3) of the Income-tax Act, 1961 (in short, ‘the Act’) dated 16.11.2010. 2. The grounds of appeal raised by the assessee are as follows: “1.That, the Ld. CIT(A) has wrongly confirmed addition of Rs.37,49,551/- being loss incurred on sale of groundnut oil and SEGN oil by wrongly considering the loss as speculative loss. Page | 2 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani 2. That, the Ld. CIT(A) has wrongly confirmed the addition of Rs.1,14,161/- on account of difference in valuation of stock. 3. That, the Ld. CIT(A) has wrongly confirmed levy of interest u/s 234A, 234B, 234C and 234D of the I.T. Act, 1961. 4. That, the findings of the Ld. assessing officer and Ld. CIT(A) are not justified and are bad-in-law. 5. The assessee craves to add, amend, alter or delete any of the above grounds of appeals.” 3. The appeal filed by the assessee, before this Tribunal is barred by limitation by 3972 days. The assessee moved a petition for condonation of delay, requesting the Bench to condone the delay. Learned Counsel for the assessee, explained before us the “sufficient cause”, for such huge delay, stating that in the assessee’s case under consideration, the order of the Ld. CIT(A), is dated 28.07.2011, therefore, the said appeal should have been filed before this Tribunal, on or before 29.09.2011. However, the assessee has filed the appeal before this Tribunal on 10.08.2022, hence, there is a delay of 3966 days. At the outset, the Ld. Counsel for the assessee submitted that out of this total delay of 3966 days, the delay attributable to Covid-19-pandemic, should be excluded. As persuo-moto Miscellaneous Application No.21 of 2022, dated 10.01.2022, the Hon’able Supreme Court has condoned the delay, for the period, from 15.03.2020 to 28.05.2022 including 90 days. Therefore, 807 days, delay are attributable to Covid-19- pandemic, and this should be treated, as if, it is explained by assessee, therefore, after excluding the Covid-19-pandemic period of 807 days, the effective delay comes to 3159 days (i.e. 3966 days – 807 days). 4. Therefore, learned Counsel submitted that assessee is supposed to explain the effective delay of 3159 days only. For this effective delay, the learned Counsel for the assessee, has explained the “sufficient cause” as follows: Page | 3 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani (i) The delay has been caused in filing the appeal, mainly, because assessee was suffering from alzheimer's disease and also regularly taking medicines as advised by doctor. The copy of doctor's certificate and the treatment documents is filed by the learned Counsel before the Bench, which is placed at paper book page no.29. (ii) Due to continuous disease, the assessee’s business was started to make losses.The key person and the manager who was working in the assessee’s person, was also died. The death certificate is submitted by the Ld. Counsel before the Bench, which is on paper book page no.31, of assessee`s paper book. (iii) Due to the above situation, nobody appeared before learned CIT(A), during the appellate proceedings. (iv) The order of the Ld. CIT(A) was not served on the assessee, the assessee came to know when the demand notice was served upon him, thereafter, the assessee requested the Ld. CIT(A) by writing to furnish a copy of order. The assessee has deposited the required fee with the Income-tax Department to obtain the copy of order of the Ld. CIT(A), the relevant proof is attached with the paperwork. (v) The assessee is an individual and senior citizen. The assessee is engaged in business of trading in edible oil under the name and style of \"Shivam Trading Co.\"The assessee has been suffering from alzheimer's dieses and the assessee is on medication as advised by the doctor. In addition to above, the assessee is also suffering from myasthenia gravis dieses. Myasthenia Gravia is a chronic autoimmune disorder where antibodies destroy the communication between nerves and muscles, resulting in weakness of the skeletal muscles. It is further stated that Page | 4 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani Myasthenia Gravis affects the voluntary muscles of the body, especially those that control the eyes, mouth, throat and limbs. To manage this condition, the assessee is regularly taking medicines prescribed by the doctor of Vithalani Hospital. The assessee is undergoing continuous treatment and regularly completing necessary reports at the hospital to manage and monitor his condition effectively. As per the doctor's sickness certificate dated 02/10/2011 the assessee's treatment has ongoing continuously since long. (vi) The assessee is not able to manage the day to day business affairs and therefore earlier the accountant was handling such matters, who is also unfortunate died. Therefore, the minor son of the assessee has joined the business atvery early age due to poor health of the assessee. (vii) It is also stated that the appeal has been filed by the previous tax consultant. In this regards, the assessee`s son had also submitted intimation letter requesting a follow-uponthe status of this appeal. On March 21,2011, Mr. Mehul M. Mavani, the son of the assessee has submitted a letter to the previous tax consultant, indicating that the assessee, the owner of \"Shivam Trading Co.\" was not well, as the assessee was suffering from alzheimer's dieses and myasthenia gravis. Therefore, the son of the assessee, has submitted letter to carry out appeal, recommending assistance from accountant, Shri Prabhudas Dasani, as the minor son of the assessee was unfamiliar with income tax matters. The copy of letter is attached at page no.1 of assessee`s paper book. (ix) The another latter dated July 22, 2011 has been delivered by the son of the assessee to the previous tax consultant, However, no further action was taken by theprevious tax consultant.The accounting data and other financial data were managed by the accountant of the assessee. Unfortunately, due to death of the accountant, the assessee was under the Page | 5 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani impression that all compliance regarding the appeal had been completed and believed that there was nothing pending on their part. The copy of letter dated July 22, 2011 is attached at no.2 of assessee`s paper book. (x) Further the son of the assessee became aware of the pendency of the appeal proceedings when the TDS refund of the subsequent years was adjusted and the demand recovery notice has been issued by the department. Therefore, the assessee subsequently has consulted another advocate and requested a follow-up on the pending matters. After that, the new tax consultant has gathered the details from the departments and collected the appeal orders, after which an appeal has been filled before the Hon'ble ITAT. The copy of letter of follow-up on pending matter is attached at no.3 of assessee`s paper book. (xi) The copy of letter filed before the Id. CIT(A) for collecting order is also enclosed on no.4 of assessee`s paper book. Therefore, the assessee was not in a condition to make any decisions relating to the business and also the assessee has not complied with the appeal within statutory time limit. The Learned Counsel stated that due to severe illness of the assessee and default of the old tax consultant, the delay has occurred. There was complete uncertainty and anxiety environment in the family of the assessee, due to severe illness.The son of the assessee, also wrote letter to the previous tax consultant, to do the necessary follow-up in the appeal matter, however, the old tax consultant used to reply to the son of the assessee, stating that he would take care of the appeal matters and need not to worry. Therefore, son of the assessee was in the impression that taxation matters are being handled by the old tax consultant carefully. However, old tax consultant cheated the assessee and did not file the appeal of the before the Tribunal. Considering these circumstances, the ld Page | 6 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani Counsel for the assessee, prayed the Bench that delay should be condoned in the interest of justice. 5. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue submitted that assessee has failed to prove the ‘sufficient cause’, just to submit the medical reports are not sufficient. The accountant of the assessee died, and the old Tax consultant cheated the assessee are not ‘sufficient cause’, to condone the delay. The Ld. Sr. DR submitted that if the assessee was suffering from chronic disease, then some guardian should be appointed for him, to work on behalf of the assessee, which the assessee failed to do so, therefore, such huge delay should not be condoned. 6. We have heard both the parties on this preliminary issue. We note that before us the assessee is an individual and senior citizen. We note that in the assessee’s case under consideration, the order of the Ld. CIT(A), is dated 28.07.2011, therefore, the said appeal should have been filed before this Tribunal, on or before 29.09.2011. However, the assessee has filed the appeal before this Tribunal on 10.08.2022, hence, there is a delay of 3966 days. Out of this total delay of 3966 days, the delay attributable to Covid-19-pandemic, should be excluded. As per suo-moto Miscellaneous Application No.21 of 2022, dated 10.01.2022, the Hon`ble Supreme Court has condoned the delay, for the period, from 15.03.2020 to 28.05.2022 including 90 days. The findings of the Hon`ble Court is reproduced below: “5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. Page | 7 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. 6. As prayed for by learned Senior Counsel, M.A. No. 29 of 2022 is dismissed as withdrawn.” 7. Therefore, we find that 807 days, delay are attributable to Covid-19- pandemic, hence, we condoned the same delay. 8. For balance effective delay of 3159 days (i.e. 3966 days – 807 days), we note that assessee has explained the delay in a systematic way, which we have noted above. The delay has been caused in filing the appeal, mainly, because assessee was suffering from alzheimer's disease and also regularly taking medicines as advised by doctor and we have examine the relevant medical papers. The second reason of delay was that key person and the manager who was working in the assessee’s business, was also died. We have examined the death certificate.The third reason of delay isthat the appeal had been filed by the previous tax consultant, who committed the mistake, given wrong advice and cheated the assessee also. We note that assessee should not be penalized because of the mistake and wrong advice of the Tax consultant/advocate of the assessee. For that reliance is also placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of Page | 8 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: \"3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing. 9. We find that the words ‘sufficient cause’ should receive a liberal construction, so as to advance substantial justice, where no negligence nor inaction nor want of bona fides is imputable to the applicant. [Bharat Auto Center v. CIT 282 ITR 366] The mistake of the lawyer or accountant of the assessee, may be a good reason for condoning delay. 10. We note that the power to condone the delay is discretionary and the discretion must be judicially exercised. In considering the condonation petition, it is to be remembered that statutes conferring a right of appeal must be construed in furtherance of justice and the provision limiting the time for bringing an appeal must be liberally interpreted, so that the party pursuing such remedy allowed to him by the law is not non-suited on mere technicalities.In granting the indulgence and condoning the delay the appellate authority must be satisfied that there had been diligence on the part of the assessee and the latter was not guilty of negligence whatsoever [Pt. Krishna Rao D. Phalke v. Trimbak, AIR 1938 Nag 156; Baldeo Lal Roy v. State of Bihar, (1960) 11 STC 104 (Pat)]. Illness is sufficient cause, if it can be shown that the man was utterly disabled to attend to any duty [Rambhagat Sao Janki Sao v. The Province of Bihar, (1946) 1 STC 145 (Board of Revenue, Bihar)]. Thus, where the assessee had high fever with delirium [L.E.H.U. v. A.M. Yin. UBR (1897-1901) 451], or an attack of appendicitis before the expiry of limitation period [Madho v. Sham, Page | 9 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani 1942 NLJ 311] and the illness continued till the period of limitation expired [Ma Thin v. U. Bay, AIR 1928 Rang 165], it was held that there was sufficient cause shown for the purpose of condoning the delay. Where the condonation application was supported by medical reports and doctor's certificate about the illness of the working partner of the assessee-firm, the condonation of delay could not be refused. 11. We find that in the assessee`s case, the delay has been caused in filing the appeal, mainly, because assessee was suffering from alzheimer's disease continuously, and due to continuous disease, the assessee’s business was started to make losses. The key person and the manager who was working in the assessee’s business, was also died. The assessee`s son continuously wrote letter to the old tax consultant, however, no action was taken by theold tax consultant/advocate. The assessee was cheated by the old tax consultant/advocate.Due to severe illness of the assessee and default of the old tax consultant/advocate, the delay has occurred. Besides, there was complete uncertainty and anxiety environment in the family of the assessee, due to severe illness.We find that the assessee has been a victim of misrepresentation of facts by his own old tax consultant/advocate and was kept under the impression that the appeal is pending before the Tribunal, whereas no appeal, was in fact, filed by the advocate/old tax consultant, before the Tribunal. In these circumstances,it cannot be said that the assessee has not been vigilant in prosecuting the appeal. Hon`ble Supreme Court in the case of MOOL CHANDRA Vs. UOI & ANR. (CIVIL APPEAL Nos. 8435-8436 OF2024)(SC)(Page no. 53-68) –held that it is not the length of delay that would be required to be considered while examining the plea for condonation of delay, it is the cause for delay whichhas been propounded will have to be examined. If the cause for delay would fall within the four comers of sufficient cause, irrespective of the length of delay, same deserves to be condoned. Page | 10 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani 12. We find that the cause shown by the petitioner (assessee) is sufficient to justify condoning the delay in filing the appeal, therefore, we condoned the remaining delay and admit the appeal of the assessee, for adjudication on merit. 13. On merit, we note that assessee`s main grievance is that Ld. CIT(A) has wrongly confirmed addition of Rs.37,49,551/-, being loss incurred on sale of groundnut oil, and SEGN oil by wrongly considering the loss as speculative loss.Brief facts qua the issue are that the assessee has filed his return of income for A.Y.2008-09 on 30/09/2008, declaring total income of Rs.2,54,149/-. The return of income was processed under section 143(1) of the Income tax Act on 22/06/2009. The account of the assessee has been audited as per the requirement of section 44AB of the Act, and the audit report in form No. 3CB & 3CD together with copies of Balance Sheet, Profit & Loss account and necessary schedules were filed before the assessing officer. Subsequently, the assessee`s case was selected for scrutiny assessment, through CASS and statutory notice u/s 143(2) of the Act was issued 24/08/2009 and duly served upon the assessee on 30/09/2009. The assessee is engaged in the business of trading edible oils i.e. Ground nut, Cotton seed oil, SEGN oil etc. The assessing officer noticed that assessee purchased and sold 1,55,975 kgs. Groundnut oil and the entire purchase and most of all sales were made to M/s. Saurashtra Oil Mill only. Similarly, the assessee purchased majority of SEGN oil from M/s. Saurashtra Oil Mill and sold the same to M/s. Saurashtra Oil Mill only; entire transaction of purchase and sale resulting into gross loss from transaction with one partly only was found to be quite abnormal and therefore, the assessing officer asked the assessee to give complete details of transaction like production of sales and purchase bill and other evidences regarding physical movement involving taking and handing over of the goods. The assessee has provided information called Page | 11 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani for by the assessing officer. Further, ongoing through the item wise purchase and sales account,assessing officer noticed that the assessee has purchased groundnut oil & SEGN oil on 13/03/08, 14/03/08, 15/03/08 and sold the entire quantity on 21/03/08, 22/03/08 & 23/03/08 to M/s. Saurashtra Oil Mill resulting into huge losses, details of which have been mentioned in Para 8 of the assessment order. The assessing officer considered that as per provisions of section 43(5) of the Act, any transaction carried out without actual delivery of the goods is required to be considered as speculative transaction. As the assessee has not provided any evidence regarding actual delivery of goods when he purchased and sold the above commodities, assessing officer held that all the transaction carried out without taking actual delivery of goods is required to be considered as speculative transactions as per provisions of sec.43(5) of the Act.Accordingly, the assessing officer concluded that in view of Explanation 2 appended below section 28 of the Act, it is clear that the assessee deemed to be engaged in two type of business viz: (1) Normal Trading of edible oil and (2) Speculation business of edible oil. Finally, assessing officer found that on speculative transaction in groundnut oil and SEGN oil the assessee has incurred speculation losses of Rs.37,49,551 (SEGN Oil Rs.19,20,558 + G.N. oil Rs.18,28,993) and there he disallowed the same and added the same to the income of the assessee. 14. Aggrieved by the order of assessing officer, the assessee carried the matter in appeal before Ld. CIT(A), who has confirmed the action of assessing officer. The ld CIT(A) just reiterate the findings of assessing officer and upheld the action of assessing officer in disallowing the speculation loss of Rs.37,49,551/-. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before us. Page | 12 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani 15. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. The Ld. Counsel for the assessee submitted that assessee is not doing any speculation business. The assessee has submitted following evidences and documents, which shows that there is actual delivery of the goods, these documents include the following, viz: (1) Copy of acknowledgment of return of income (2) Copy of Tax Audit report (3)Copy of GST of M/s Shivam Trading Company (4) Copy of CST registration of M/s Shivam (5) Copy of VAT registration certificate of M/s ShivamTrading Company (6) GST Registration certificate of M/s Saurashtra Oil Mill (8) Copy of sale register reflecting name of parties on various dates, (9) Copy of purchase register reflecting name of parties on various dates (10) Copy of invoices for sales made to M/s Saurashtra Oil Mill (11).Copy of confirmation letter of M/s Saurashtra Oil Mill about actual delivery (12) Copy of VAT returns filed during the year (13) Audit report under Gujarat Value Added Act, 2003 for FY 2006-2007, (14) Copy of ledger account of transportation expense from book of M/s Saurashtra Oil Mill, and (14) Copy of quarterly stock statement. 16. On the other hand, Ld. Sr. DR for the Revenue, submitted that assessee purchased goods without taking actual delivered, and the assessee is selling the goods, without actual delivery, therefore, Ld. Sr. DR relied on the preponderance of the probability, that there may be chances, considering the facts of the case, that assessee might have sold the goods without giving actual delivery of the goods, therefore, ld DR stated that the addition made by the assessing officer should be confirmed. Page | 13 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani 17. We have examined the documents and evidences submitted by the assessee and we find that there is actual sale and purchase. We also find that there is a closing stock also and all the transactions are delivery based. The assessee paid the VAT. The assessee has furnished the proof of purchase and sale. The assessee furnished the certificate of supplier and the assessee also furnished the quantity details of purchases and sale and closing stock, therefore, in the assessee’s case, it cannot be said that it is a speculationtransaction. Considering these facts, we delete the addition of Rs.37,49,551/-. Ground No.1 raised by the assessee is allowed. 18. Coming to ground No.2, raised by the assessee, which relates to assessing officer's action in making addition on account of difference in valuation of stock. The assessing officer has discussed this issue in paras 16 to 18 of the assessment order. Theassessing officer mentioned that during the course of assessment proceedings the assessee was asked to furnish details of closing stock like quantity, rate and method of its valuation and the assessee has provided the details of closing stock in quantity and its value. However, assessing officer rejected the contention of the assessee, and noted that as per final accounts / trading account at the end of the year, in absence of any specific reason for undervaluation of the goods, remained in stock on the last day of the year, the value of goods was taken at cost, so the addition on account of difference of Rs.1,14,161/- was made by the assessing officer stating that there is undervaluation of closing stock. 19. On appeal, the ld. CIT(A) confirmed the action of the assessing officer, therefore assessee is in appeal before us. 20. We have heard both the parties. We note thatduring the course of assessment proceedings, the assessee was asked to furnish details of Page | 14 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani closing stock, like quantity, rate and method of its valuation. The assessee has provided the details of closing stock in quantity and its value. On verification of the tax audit report and significant accounting policies attached with the final account it is noticed that the stock was valued at cost or net realizable value, whichever is lower. The assessee is engaged in trading of edible oils. Considering the nature of commodities and a normal and general system for valuation of such commodities, we do not find any difference, hence on this factual position, we delete the addition. Ground No.2 raised by the assessee, is allowed. 21. In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 18/10/2024 Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot \u001bदनांक/ Date: 18/10/2024 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Rajkot Page | 15 ITA Nos.222/RJT/2022/AY.2008-09 Mahendra Vithaldas Mavani Date Initial 1. Draft dictated on (dictation sheet is enclosed with main file.) 12.09.2024 } PS 2. Draft placed before author 13.09.2024 PS 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Draft dictation sheets are attached PS "