Challani Ranka Jewellery, Chennai v. Dcit Central Circle 3(4), Chennai

This is an appeal filed by the assessee directed against the Order of the learned Commissioner of Income Tax (Appeals)-19, Chennai (hereinafter called as CIT(A)) dated 31.10.2017 for the assessment year (AY) 2012-13.

2. This matter is recalled by this Tribunal in MP No.163/Chny/2018 dated 02.01.2019. It is the contention of the appellant that while computing the income, the AO had valued the stock at the market price ITA No.3066/Chny/2017 (AY: 2012-13) :- 2 -: instead of the cost price against the basic principles governing valuation of the stock. However, this ground was not adjudicating while disposing of this matter on Miscellaneous Petition filed by the assessee, the matter is recalled for the limited purpose of adjudicating this grounds of appeal.

3. During the course of hearing of the appeal, the ld. Counsel for the assessee had demonstrated before us that the AO had adopted the market price for valuation stock, which is against the basis principle of the valuation of the stock. It is settled principle of law that value of stock is important for determination of income from profits and gains of business and it is equally settled principle of law that the stock should be valued at lower cost or market price. Therefore, we remit this issue to the file of AO for the purpose of finding out the cost of the stock and to value of the closing stock at the cost or market price whichever is less. Hence, the appeal filed by the assessee is partly allowed for statistical purposes.

4. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on the 28 th day of March, 2019 in Chennai. Sd/- Sd/- (... ) (N.R.S. GANESAN)  /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER /Chennai, 2/Dated: 28 th March, 2019. EDN, Sr. P.S , *34 54/Copy to:

1. )/Appellant 2. *+)/Respondent 3. 6 ()/CIT(A) 4. 6/CIT 5. 4 * /DR 6. & /GF ITA No.3066/Chny/2017 (AY: 2012-13) :- 3 -: