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3. On appeal, the Appellate Assistant Commissioner considered that the type metal in molten form could be treated as loose tools and, therefore, the treatment of such metal as had been done for the purpose of accounting was justified. Aggrieved, the Revenue filed a second appeal before the Appellate Tribunal. The Appellate Tribunal accepted the assessee's case that the change in the method of accounting was bona fide and was not intended merely to reduce the tax liability. The Tribunal found that the change could not be characterised as arbitrary and it was not uncommon to write off such issues in the case of manufacturing concerns, when it was difficult to evaluate the metal after issue from the store room. Since the reason given for the change was found to be correct and was also in accordance with the recognised practice in the trade and there being no suggestion of the change being mala fide, the Appellate Tribunal accepted the view taken by the Appellate Assistant Commissioner and confirmed his order.

4. Learned standing counsel appearing for the Department submitted that the assessee has not consistently followed a uniform method. If the molten metal in the vat had no value, the assessee would not have resorted to estimate such value in the past. According to learned standing counsel, the addition was justified so as to bring it on par with the real income for the year. Otherwise, the result for this year would be a distorted one. Even on the analogy of loose tools, learned standing counsel submitted, that in view of the text book of accountancy, the loose tools have to be valued both on the opening and closing day to arrive at the annual income. Therefore, according to learned standing counsel, in order to arrive at the real profit at the end of the year, the assessee ought to have estimated the value of the lead, which is under the process of printing the newspaper as alloy in molten form in the vat. In order to support his contention, learned standing counsel relied upon the decision in CIT v. British Paints India Ltd., . On the other hand, learned counsel appearing for the assessee submitted that the assessee used a special type of alloy for making types in printing. This alloy is used either in a lump form or in the form of types. Such alloy is sent to the press room when required for purposes of making types out of such alloy. The alloy that is so received in the press room is in the form of molten stage in a vat. The method of accounting in respect of valuation of the alloy was not only to consider the alloy in the store room, but also to reckon the alloy in molten form in the vat by getting a report from the manager of the section. This was the method that was followed in the past. The assessee later found that there was an element of arbitrary valuation involved and that it would be proper to ignore the alloy, which is in molten form, since the expectation of life for such metal was very limited and that it would not be quite scientific to take the value of such alloy as part of the closing stock. It was stated that every time it is used, the composition of the alloy changes and it loses its utility after some time. It was considered that the amount could be written off once it is issued from the store room. The adoption of the new method was treated as a change in the method of accounting regularly employed by the assessee and distorting the profits of the year. It was further submitted that the method followed by the assessee is justified in respect of the loose tools. For these reasons, it was submitted that the Tribunal was correct in accepting the order passed by the Appellate Assistant Commissioner in deleting the addition relating to the value of the alloy sent to the press room.

Hence, according to the assessee, the assessee can show only the closing stock value of the alloy in the store room and not alloy which is in the press room in the form of molten state in a vat.

6. It is always open to an assessee to change his method of accounting for a better or more convenient method. We are not for a moment saying that the assessee is not entitled to change his method of accounting. The assessee is entitled to have his own method of accounting, which is convenient and suitable for his business. The point for consideration is, that such kind of change of method of accounting should not interfere in the process of finding out the true profit of the year under consideration. The addition was made in the present case to neutralise distortion arising in the adjustment. If the change in the method of accounting as in a stock valuation, is bona fide and it is not adopted merely to reduce the tax liability, the change in the method of accounting is always acceptable. We have got to ascertain whether the change is bona fide and whether the new method can be considered to be a reasonable method or better method or a normal method generally considered as appropriate. In so far as loose tools are concerned, the consumption of loose tools could be valued only with reference to the valuation placed on such loose tools at the beginning and at the end of the accounting year. In the present case, the analogy between the molten metal in the vat in the press room and the loose tools in the factory may not be quite apt. According to the assessee when once the alloy is sent to the press room, and after the alloy was used repeatedly in the process of news printing, ultimately the alloy would lose all its character, since there is loss of quality and other ingredients of the metal. Therefore, after use, the alloy would become useless and the value of it would be negligible. Therefore, the assessee does not want to include the value of the closing stock of the alloy sent to the press room. This is also because, it was pointed out that in the matter of evaluation of such alloy in the molten stage in the vat, it is almost arbitrary. These are all the reasons for which the Tribunal accepted the view taken by the Appellate Assistant Commissioner in deleting the disallowance made under this head.