COMMISSIONER OF INCOME TAX Vs. RAMESHWAR PROSAD KEJRIWAL AND SONS P LTD

JUDGEMENT

(1.) <JGN>A.K.Sengupta,Shyamal Kumar Sen</JGN> In this reference made at the instance of the Revenue, the following four questions are referred by the Tribunal for the opinion of this Court under s. 256 (1) of the IT Act, 1961 ('the Act') :--

(2.) ON appeal by the assessee, it was submitted on its behalf before the CIT (A) that the assessee- company was facing difficulty in valuing its closing stock of tea at 'since realsiable value', that the method of valuing stock at estimated cost was one of the recognised methods and that the changed method was being followed by the assessee-company year-after-year. The CIT (A) , however, upheld the order passed by the AO and rejected the new method of stock valuation adopted by the assessee-company in the year under reference. On further appeal by the assessee, the Tribunal held and observed that there were no good reasons to reject the change in method of valuation of stock affected by the assessee-company. It was, inter alia, submitted on behalf of the assessee-company before the Tribunal that although in the earlier years, the assessee was valuing its stock of tea at 'since realsiable value' it decided to change its method of stock valuation to estimated cost price with effect from the previous year relevant to the asst. yr. 1984-85. The bona fides of the assessee cannot be doubted since the changed method of valuation was being consistently followed by the assessee-company in future too and that the method of valuing stock at cost was one of the recognised methods.

(3.) THERE will be no order as to costs.