Law:

Section:

Section 145 of the Income-tax, Act 1961 - Method of accounting - Valuation of stock - Assessment year 1980-81 - For relevant assessment year, assessee filed its return of income in which value of closing stock had been shown on basis of sale price - Subsequently, assessee filed a revised return reducing value of sock on basis of cost price - Assessing Officer, opined that there was no reason for charge for change in method of valuation - He, accordingly, made addition of difference in two values in assessee's income - Tribunal, in view of audit report and comments of Comptroller and Auditor General of India, concluded that change in method of valuation of closing stock was bona fide and same was consistently followed in subsequent years - It accordingly, deleted addition made by Assessing Officer - Whether findings recorded by Tribunal being pure findings of fact, no question of law arose out of same for consideration - Held, yes FACTS The assessee undertaking was carrying on the business of mining and manufacture of marble and slate stones. During the course of assessment proceedings for the assessment year 1981-82, it filed its return of income in which the value of the closing stock had been show at certain amount. However, later on, it filed a revised return reducing the value of stock. On being asked to explain the difference it was stated that the earlier valuation was made on the basis of sale price, where as the valuation as per revised return, was shown on the basis of cost price. The Assessing Officer noticing that the assessee had been valuing its stock on the basis of market price in earlier years, whereas the valuation in the revised return had been made on the cost price which was lower, observed that the method once adopted had to be consistently followed. He, therefore, made the addition of difference to the total income of the assessee on the ground that there was no reason for changing the method of valuation. On appeal, the Commissioner holding the change of method of valuation to be bona fide deleted the addition. The Tribunal, in view of the audit report and comments of the Comptroller and Auditor General of India, observed that the change…

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