Law: Income Tax Act, 1961

Section: 145,256

Income-tax----Reference---Valuation of stock---Change in method of valuation of stock---Finding by Tribunal that change was bona fide and changed method was followed regularly in succeeding years---Finding of fact--­Tribunal justified in allowing change and deleting additions to income--­No question of law arose---Indian Income Tax Act, 1961, Ss. 145 & 256. Held, dismissing the application to direct reference, that in the present case, the assessee changed the mode of valuation of closing stock to cost price on the ground that the cost price was lower than the market price. The change in the method of valuation of the closing stock was rightly allowed by the Commissioner of Income-tax (Appeals) as well as the Tribunal, because it was found to be bona fide and was also regularly employed by the assessee in subsequent years. The Tribunal had on appreciation of evidence arrived at a finding of fact. The Tribunal was right in law in deleting the addition of Rs.8,13,090 made by the Assessing Officer on account of under valuation of closing stock by changing the method of valuation by the assessee. No question of law arose from its order. CIT v. British Paints India Ltd. (1991) 188 ITR 44 (SC) ref. JUDGMENT N.K. AGRAWAL, J.---This is an application by the Commissioner- of Income-tax, Haryana, Rohtak, filed under section 256(2) of the Income-tax Act, 1961, seeking a direction to the Income-tax Appellate Tribunal, Chandigarh Bench ("the Tribunal"), to refer the following question of law to this Court for its opinion: "Whether, on the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals)/Income-tax Appellate Tribunal was right in law in deleting the addition of Rs.8,13,090 made by the Assessing Officer on account of under valuation of closing stock by changing the method of valuation by the assessee?" The assessee was an undertaking of the State Government of Harayana and carried on the work of mining and manufacturing of marble and slate stones. The assessee showed a value of the closing stock at Rs.17,59,071.53 in the original return filed for the assessment year 1981-82. The value of the closing stock was, however, reduced to…

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