Stock Valuation not on basis of Market Value.
Commissioner of Income Tax Vs C Jayanti Lal (2011) 199 Taxmann 34 (Magazine) : During scrutiny of this case, ITO has added income worth Rs. 17.71 Lakh due to difference in stock amount. ITO has calculated Stock on the basis of Market Value. Due to this an amount of Rs. 17.71 Lakh has been added by ITO. But this case goes in High Court and accepted that Stock Valuation has been calculated by businessman as per rules " Cost Price and Market Value " which ever is less. On the basis of this rule, addition of Rs. 17.71 Lakh has been deleted by High Court.
Note :- If an assessee calculates his closing stock on a particular method in last few years, Assessing Authority (A.O. ) can not create any addition/demand on the basis of different Stock Valuation Method.