1998 (12) TMI 57

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....sessee-firm filed returns of income for the year 1982-93, During the lifetime of one Shri Paranjothi Nadar, he was one of the five partners of the assessee-firm. He died on October 31, 1981. On the death of Paranjothi Nadar, the assessee claimed that the firm stood dissolved, and the assessee furnished returns of income disclosing an income of Rs. 22,940 for the period from April 1, 1981 to Octobe....

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....s arisen and at the instance of the Revenue, the following question has been referred to this court for our opinion : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the closing stock of the firm as on October 31, 1981, being the date of dissolution of the erstwhile firm should not be valued on the basis of market price ?" ....

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....not valuing the closing stock at the market value on the dissolution of the firm." The apex court has held in the case of A. L. A. Firm v. CIT [1991] 189 ITR 285, that with a view to arrive at the correct picture of trade of the partnership on the date when it ceases to function, the valuation of stock-in-trade should be made on the basis of the prevailing market price, affirming the view taken....