1984 (8) TMI 170

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....nership deed dated 1-4-1981). As and from 1-4-1981 this partnership was to carry on business "by taking over all the assts and liabilities hitherto carried on" by the assessee aas per terms and conditions agreed to orally. In the new firm the assessee had 40 per cent share. After the ITO's completion of the assessment of the assessee for the assessment year 1981-82, the CIT initiated revisionary proceedings under section 163 of the Act on the ground that the assessee when she ceased to be the proprietrix of the concern had valued the stock-in-trade of the business at Rs. 4,31,108 on the basis of cost or market value whichever is lower (on the basis of cost price adopted). According to the Commissioner this option of valuation was available ....

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....ever is lower and cost price has been adopted for the closing stock valuation this year being lower. The newly constituted firm had taken over the assets and liabilities of the proprietor's business as a going concern at market value as on 1-4-1981 and the business was subsisting as on 31-3-1981. it was further submitted that the cited High Court decisions are distinguishable. The departmental representative in reply relies on the Commissioner's order. 3. We have heard the parties and were are of the view that the Commissioner's order cannot be sustained. In the present case of the assessee has valued the closing stock of the proprietary business as on 31-3-1981 at cost price based on the regularly employed basis of valuation of cost pri....