ORDER 1. Leave granted. 2. The instant matter arises out of an application under Section 154 of the Income Tax Act, 1961, seeking rectification of the return of income for the assessment year 1996-97. 3. Vide Order dated 27-2-1998, the assessing officer made an addition of Rs. 9,77,529 to the value of the closing stock and as a result the total income of the assessee stood increased from Rs. 3,40,526 to Rs. 13,18,055. The assessee opted for the Kar Vivad Samadhan Scheme, 1998, (KVSS) and paid the tax payable on the basis of the increased income amounting to Rs. 13,18,055 for the assessment year 1995-96. Accordingly, the assessee herein moved an application under Section 154 of the Income Tax Act requesting the assessing officer to give consequential effect to the order passed on February 27, 1998. The assessing officer rejected the application on the ground that the assessee had suppressed the work-in-progress undertaken by the appellant (assessee) in respect of Shri G.K. Badola and Shri Rajinder Behl. Consequentially, the rectification application filed by the assessee came to be rejected. This order was upheld by the Commissioner (Appeals) and the High Court vide the impugned judgment (overruling the order passed by the Tribunal) upholding the allegation of suppression. 4. We find merit in this civil appeal. It is the fundamental principle of accountancy that the figure of the closing stock of the earlier year has to form the opening stock of the next accounting year. In the present case, we find that after the alleged suppression of the work-in-progress came to be detected, a declaration was filed under the KVS Scheme on the basis of the order passed by the assessing officer on 27-2-1998 which declaration was accepted by the designated authority (presumably after obtaining the report from the assessing officer). In the circumstances, the assessing officer ought not to have rejected the application of the assessee under Section 154. 5. For the aforestated reasons we set aside the impugned judgment of the High Court and allow this civil appeal filed by the assessee with no order as to costs.