Document Fragment View

Matching Fragments

3. It has also been noticed during the perusal of records that 4,40,000 shares of ======================================================================= MRPL held by Ashok Mittal & Co. costs Rs.20.09 per share and their market value is Rs.47.58 as on 31.03.2005 whereas the shares of MRPL have been shown at Rs.22.10 per share on 31.03.2004 which means that they have been held for a period more than 12 months and accordingly, should be valued at cost. The purchase cost of shares cannot in any case come down from Rs.22.10 per share to Rs.20.09 per share which means that the closing stock has been undervalued by Rs.8,84,400/-.

So in view of the above facts and legal judgments, the assesee has valued its closing stock properly (viz. lower of cost of market value as per AS-13)."

11. With regard to the undervaluation of the closing stock of MRPL shares held by the petitioner , the petitioner raised the following objections:-

"In this respect, it may be stated that the closing stock of MRPL shares as on 31.03.2005 was 4,00,000 shares and not 4,40,000 shares (the quantity of 4,40,000 shares shown as on 31.03.2005 was typographical error). The assessee is enclosing herewith the full account of MRPL shares showing the opening stock, MRPL shares purchased and sold during the ======================================================================= year; and ledger printout of stock trading account as mentioned in Comtech Software (As maintained by share brokers at that time). As per the inventory details of MRPL, as per software (on which books of accounts was maintained by the assessee) M/s. Ashok Mittal & Co. was having only 4,00,000 share of MRPL as on 31.03.2005 and the same has valued at Rs.22.10 per share, and the amount of closing stock has been worked out at Rs.88,40,000/-. The details furnished during assessment proceedings the amount of closing stock of MRPL shares has been shown at Rs.88,40,000/- while the quantity was wrongly shown at 4,40,000 instead of 4,00,000 shares, (due to clerical error) hence the amount of value of closing stock was wrongly worked at Rs.20.01 per shares (i.e. Rs.88,40,000/- divided by 4,40,000 (No. of shares). The amount of closing stock of MRL has been correctly shown at Rs.88,40,000/- following the method of valuation viz. 'cost price or market price whichever is lower'). The quantity of closing stock of MRPL as on 31.03.2005 can be seen ======================================================================= from the DMAT statement, wherein quantity of MRPL has been shown as 4,00,000 shares. (Copy of DMAT statement is annexed).
From the above facts, it can be seen that the amount of closing stock of MRPL has been properly been valued by the assessee and it is only due to clerical error the quantity of MRPL shares as on 31.03.2005 was wrongly shown at 4,40,000 shares instead of 4,00,000 shares, hence your proposal to reassess the income of the assessee due to the above clerical error is against law and the facts of the case."

24. With regard to valuation of closing stock of shares of MRPL, the stand of the petitioner is that the total number of shares held by the petitioner is 4,00,000 and inadvertently, on account of a typographical clerical mistake, the number of shares has been shown as 4,40,000. The total investment is of ======================================================================= Rs.88,40,000 . As per the petitioner the number of share held are 4,00,000 but inadvertently they have been shown as 4,40,000. For 4,00,000 the value per share is Rs. 22.10 and at 4,40,000 the value per share comes to Rs. 20.09. The total value of closing stock of Rs.88,40,000/- remained the same. There is no purchase of 40,000 additional shares. The issue with regard to the clerical mistake had been raised by the petitioner in the objection s. However, the Assessing Officer while dealing with the objection s had not eve n adverted to this aspect and had not dealt with the issue as to how there is an escapement of income when the valuation is completely revenue neutral and the number of shares actually held by the petitioner as claimed are 4,00,000 and not 4,40,000. The record reveals that the Assessee in letters dated 14.07.2008 and 15.07.2008 in reply to the Audit Objections, ha d confirmed that the shares of M/s MRPL were 4,40,000 and were valued at Rs. 20.09 per share being the ======================================================================= lower of cost price and market price. This aspect has neither been noticed nor dealt with by the Assessing Officer while dealing with the objections raised by the Assessee.