TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the assessee was entitled to change the method of valuation of closing stock from market value to the lower of cost or market value and claim the resultant deduction. (ii) Whether cash payments by way of reimbursement of employees' medical expenses could be included in the value of benefit, amenity or perquisite for disallowance under section 40(c)(iii) or section 40(a)(v) of the Income-tax Act, 1961.
Issue (i): Whether the assessee was entitled to change the method of valuation of closing stock from market value to the lower of cost or market value and claim the resultant deduction.
Analysis: The change in valuation method was found to be bona fide and consistently followed thereafter. The adopted system was a recognised method of accounting, and the findings recorded by the Tribunal showed that the departure was not casual. On those facts, no error of law arose in accepting the revised method of valuation for income-tax purposes.
Conclusion: The issue was answered in favour of the assessee.
Issue (ii): Whether cash payments by way of reimbursement of employees' medical expenses could be included in the value of benefit, amenity or perquisite for disallowance under section 40(c)(iii) or section 40(a)(v) of the Income-tax Act, 1961.
Analysis: The point stood concluded by an earlier decision of the same court, and the statutory disallowance provisions were held not to cover such reimbursements within the value of benefit, amenity or perquisite for the relevant limitation on disallowance.
Conclusion: The issue was answered in favour of the assessee.
Final Conclusion: Both referred questions were decided against the Revenue and in favour of the assessee, with no order as to costs.
Ratio Decidendi: A bona fide and consistently followed change in the method of valuing closing stock is permissible when supported by accepted accounting practice, and reimbursement of employees' medical expenses is not to be treated as a disallowable perquisite within the relevant statutory limits.
TaxTMI 
