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Mopeds India Ltd. vs Inspecting Assistant Commissioner on 30 September, 1983 cites

British Paints India Ltd. vs Commissioner Of Income-Tax on 22 August, 1974

The opening and closing stocks of earlier years had been valued in the same manner and, hence, disturbance of any earlier year is unnecessary. If the earlier year's closing stock is allowed to remain as it is, while disturbing the opening stock of this year alone, it would be unfair and inconsistent. Under such circumstances, it is considered permissible not to disturb the opening stock. We have the authority of the decision of the Calcutta High Court in the case of British Paints India Ltd. v. CIT [1978] 111 ITR 53, where it was observed that the Tribunal was not justified in rejecting the method of valuation of the goods-in-process and the finished products on the basis of the cost of raw material adopted by the assessee, since the method followed by the assessee was a recognised method, The assessee in this case had been following not merely the valuation of closing stock with reference to raw material consumed, but also attributing direct labour and works overheads. If the assessee's departure from the method of accounting hitherto followed was a casual one, or was not bonafide, or the shift to the new system was not for a better or more scientific one, or was made merely with a view to escaping liability to tax, or for any such other consideration, the ITO would be justified in rejecting the change in method altogether. In this case, the first appellate authority upheld the change, but has asked that the opening stock should be revalued in the same manner-Sarupchand v. CIT [1936] 4 ITR 420 (Bom.
Calcutta High Court Cites 12 - Cited by 52 - S Mukharji - Full Document

Calcutta Discount Company Limited vs Income-Tax Officer, Companies ... on 1 November, 1960

Even creation of the fund subsequent to the year was considered permissible for the assessment year 1976-77 by this Tribunal in IT Appeal No. 773 (Mad.) of 1981 dated 9-1-1982. Orient Pharma (P.) Ltd. v. ITO [1983] 16 TTJ (Mad.) 423. Section 40A(7) bars a provision when there is no recognised fund. If there was a provident fund in existence as at the end of the year, we do not see how a later recognition could debar the assessee's right. It necessarily takes some time for the authorities to examine the claim. Similarly, the assessee also may take some time to file a formal application after the fund has been constituted. As long as the fund as constituted has been recognised, we are of the view that both the spirit and the letter of the law under Section 40A(7) should be taken as having been satisfied. The assessee, it would appear, would prima facie be eligible for the allowance even on the basis of what the ITO has stated in the order if the assessee's claim was correct, viz., that there was a gratuity fund in existence as at the end of the accounting year. The first appellate authority has also raised some doubt that the entire amount is not a provision since the amount of Rs. 1,50,000 would appear to be an amount which has not been charged to the profit and loss account during the year but only a transfer. If this amount had not been allowed as a deduction in any earlier year, it would appear that even this amount would be entitled to deduction. At any rate, since the ITO himself had promised consideration after recognition, we think the ends of justice will be met if the entire claim is remitted back to the ITO to decide the issue afresh in the view that if the fund had been constituted prior to the end of the accounting year, it makes no difference to the assessee's claim merely because such fund has been recognised only subsequently. The appeal on this point will be treated as allowed.
Supreme Court of India Cites 13 - Cited by 1681 - K C Gupta - Full Document
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