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The Asstt. Commr. Of Income-Tax vs Kuldip Chand And Sons on 1 December, 2004 cites

K. V. A. L. M. Ramanathan Chettiar By L.Rs vs Commissioner Of Income-Tax, Madras on 11 October, 1972

In A.L.A. Finn v. CIT (supra), the assessee firm carrying on the money-lending business and a business in purchase and sale of house properties, gardens and estates, was dissolved and the business of the firm was discontinued After dissolution, the two groups took up the separate businesses with assets and liabilities falling to their respective shares. It was eventually held that the stock-in-trade as on the date of dissolution was required to be valued at market price.
Supreme Court of India Cites 21 - Cited by 160 - P J Reddy - Full Document

Sakthi Trading Co vs Commissioner Of Income-Tax, ... on 2 August, 2001

In such circumstances, it is clear that the ratio laid down in Sakthi Trading Co. (supra) would squarely apply. In this view of the matter, we are satisfied that the authorities below erred in valuing the closing stock of gold and silver ornaments at the market price disregarding the value shown by the assessee at an average cost price, which method was consistently followed by it in the past. However, we note that there is no discussion either in the assessment order or in the impugned order regarding the average cost to be applied to the closing stock. In the Statement of facts appended at pages 1 to 4 of the paper book, it is mentioned that the average cost price of gold ornament was Rs. 407 per gm and that of silver ornaments was at Rs. 5.78 per gm. Since the AO proceeded to value the closing stock at market price, the whole controversy remained centered at the market price as adopted by the AO and as suggested by the assessee on his directions. Under such circumstances, the question of valuation of dosing stock at the average cost price, remained unconsidered at the assessment level. As we have held in the foregoing para that the closing stock cannot be valued at the market price, and the same has to be valued on the average cost price, which method was consistently followed by the assessee in earlier years, we are of the considered opinion that the order of the CIT(A) cannot stand on this score. In Much circumstances, it would in the interest of justice, if the matter is restored to the file of the AO. We order accordingly and direct him to value the closing stock at the average cost price, after allowing a reasonable opportunity of being heard to the assessee to facilitate the determination of the correct average cost price as on the date of the dissolution of the firm. These grounds are disposed of in the above terms.
Supreme Court of India Cites 5 - Cited by 42 - B Kumar - Full Document

Kwality Steel Suppliers vs Commissioner Of Income Tax on 6 August, 2004

The leaned AR has relied on the decision of Hon'ble Gujarat High Court in the case of Kwality Steel Suppliers v. CIT (supra) wherein both the above referred decisions of the Apex Court were considered, in this case, the partnership firm was constituted with two partners, viz, mother and son. On the death of mother on 11.2.1993, leaving behind her share of assets and liabilities by 'Will' to her son, the son carried on the business thereafter who was the other partner in the erstwhile firm.
Gujarat High Court Cites 11 - Cited by 7 - M S Shah - Full Document

A.L.A. Firm vs Commissioner Of Income Tax, Madras on 21 February, 1991

In reaching this conclusion, the earlier decision rendered in the case of A.L.A. Firm v. CIT (supra) was duly considered and was distinguished on the premise that in that case there was dissolution and also discontinuation of the business of the firm, whereas in the case under consideration, there was dissolution on account of death of one of the partners, but there was no discontinuation of the business.
Supreme Court of India Cites 34 - Cited by 276 - Full Document

Commissioner Of Income-Tax vs Nathulal Jawarchand on 25 June, 1996

3.1. Briefly stated, the facts of the case are that the assessee-firm was dealing in purchase and sale of gold and silver ornaments. Due to the death of one of the partners, namely, Shri Kuldip Chand, the firm was dissolved on 25.2.1997 and thereafter, the business was taken over by the sole remaining partner, Shri Varinder Kumar in his individual capacity as sole proprietor. The assessed had shown valuation of closing stock of gold at Rs. 1326403/- and that of silver at Rs. 92903/- on 25.2.1997. The AO called upon the assessee to explain the reasons as to why the closing stock be not valued at market price in view of the decision in the case of CIT v. Nathu Lal Jawarchand (1997) 227-ITR-251(MP) which in turn is based on A.L.A. Finn v. CIT (1991) 189-ITR-28S(SC). It was contended on behalf of the assessee that it was regularly valuing its closing stock by taking average price according to its true worth and the name method was followed in the instant year. It was opined by the AO that the stock was required to be valued at market price. On the instructions of the AO, the assessee computed the market rate of gold ornaments at Rs. 397/- per grain as on the closing day. The AO, however, made certain changes and calculated the market price as on the day of dissolution at Rs. 455/- per gram. Apart from others, the assessee had included labour charges @ Rs. 10/- per gram whereas the AO considered this amount at Rs. 15/- per gram. Similarly, the value of the silver ornaments in the closing stock was adopted by the AO @ Rs. 6.40 per gm. as against Rs. 4.53 per gm. computed by the assesses as the market rate of silver ornaments as on the closing day. Accordingly, an addition of Rs. 1,56,431/-was made on account of the difference in the valuation of gold ornaments and Rs. 43,716/- on account of difference in the valuation of silver ornaments. In the first appeal, the learned CIT (A) allowed partial relief in the value of the gold ornaments by holding that the labour charges should be considered at Rs. 10/- par gm. This resulted into relief of Rs. 16,295/- in the valuation of closing stock of gold, against which the Revenue is aggrieved through its ground. No relief was allowed in the valuation of the closing stock of silver ornaments against which the assessee is aggrieved in the present appeal along with the addition in the valuation of gold jewellery sustained in the first appeal.
Madhya Pradesh High Court Cites 3 - Cited by 3 - Full Document
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