1945 (12) TMI 2

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....;(Judgment of the Court was delivered by the Honourable the Chief Justice.) The assessee is a merchant dealing in metals, Up to the end of the Samvat year 1994, that is up to 23rd October, 1938, he adopted as the method of accounting for income-tax purpose the practice of valuing his stocks at the cost price,. Both at the beginning and at the end of the year the cost price was taken. In respect....

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....mistake in accepting the method of accounting which the assessee had adopted for the year 1940-41. Consequently for the Samvat year 1996 (1941-42) the Income-tax Officer assessed the assessee on the basis of the cost price of the stock. He took the cost price at the beginning of the year and at the end of it, which meant the addition of Rs. 24,855 to the total income. The assessee objected and sai....

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....t income, profits and gains shall be computed for the purposes of Sections 10 and 12 in accordance with the method of accounting regularly employed by the assessee provided that, if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced from it, then the computat....

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....her the cost price or the market price whichever be the less a provision obviously intended to be in favour of the trader and one which enables him more evenly to distribute his loss. Taking the stock for the Samvat year 1995-1996 at the market price was not in accordance with the assessee's regular method of accounting. His regular method had been to take the cost price both at the beginni....