https://www.taxtmi.com/caselaws?id=6026 Whether, upon dissolution of a firm where the business is continued by the remaining partner(s) without discontinuance, the tax authority may substitute market value for the closing stock despite partners accepting valuation under the regular accounting method in dissolution settlement. The SC held that, absent cessation of business, established commercial accounting principles require valuation of closing stock at cost or market price, whichever is lower, and the rule in prior precedent mandating market-value valuation applies where dissolution is accompanied by discontinuance. Since the Tribunal's unchallenged finding established no discontinuance, directing market-value substitution was legally impermissible. The question was answered against the Revenue; the appeal was allowed. en-us Thu, 02 Aug 2001 00:00:00 +0530 Mon, 22 Dec 2025 18:42:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6026 Whether, upon dissolution of a firm where the business is continued by the remaining partner(s) without discontinuance, the tax authority may substitute market value for the closing stock despite partners accepting valuation under the regular accounting method in dissolution settlement. The SC held that, absent cessation of business, established commercial accounting principles require valuation of closing stock at cost or market price, whichever is lower, and the rule in prior precedent mandating market-value valuation applies where dissolution is accompanied by discontinuance. Since the Tribunal's unchallenged finding established no discontinuance, directing market-value substitution was legally impermissible. The question was answered against the Revenue; the appeal was allowed. Case-Laws Income Tax Thu, 02 Aug 2001 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6026