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2007] 295 ITR 268 [2008] 170 TAXMAN 301 (ALL.) HIGH COURT OF ALLAHABAD Jai Prakash Sahu* v. Commissioner of Income-tax, Agra SUSHIL HARKAULI AND VIKRAM NATH, JJ. IT REFERENCE NO. 94 OF 2006 APRIL 24, 2006 Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock - Whether U.P. Trade Tax Act and Income-tax Act are two different Acts and, therefore, an order or decision regarding stock valuation under U.P. Trade Tax Act will not operate as res judicata in proceedings under Income-tax Act - Held, yes - Whether when Assessing Officer had passed a detailed order and same had been accepted by appellate authorities, mere non-mentioning of section 145 could not vitiate proceedings because criteria set out in section had been met - Held, yes - Assessing Officer rejected valuation of assessee and applied lowest value applicable on day of acquisition as cost and valued closing stock - Assessee contended that stocks should have been valued at a lower value, as market value was lower than that - Whether since no proof was furnished by assessee of fact that market value on relevant date was lower, Assessing Officer was justified in his action - Held, yes CASES REFERRED TO Sadhuram Gordhandas v. CIT [2002] 253 ITR 695/[2001] 119 Taxman 603 (Guj.) [Para 4], Chainrup Sampatram v. CIT [1953] 24 ITR 481 (SC) [Para 4], Sakthi Trading Co. v. CIT [2001] 250 ITR 871/ 118 Taxman 301 (SC) [Para 4] and CIT v. Anandha Metal Corpn. [2005] 273 ITR 262 (Mad.) [Para 8]. R.K. Upadhyaya for the Respondent. ORDER 1. We have heard the learned counsel for the appellant and Sri R.K. Upadhyaya, appearing for the Income-tax Department. The questions sought to be raised for the purpose of this appeal are as follows :- "1. Whether the non-mention of section 145 in the order of Assessing Officer, vitiates the action by Assessing Officer? 2. Whether the question of undervaluation of the closing stock can be examined by the Assessing Officer under the Income-tax Act? 3. Whether the valuation of closing stock and consequent return under the UP Trade Tax Act which has been accepted by the Trade Tax Authorities is binding on the Income-tax Department thereby debarring the…

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