1988 (3) TMI 34

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....e Income-tax Officer to revalue the opening stock also consistently along with the closing stock when it wants to adopt the method known as 'works cost' method for the assessment year 1979-80 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the guarantee commission constitutes revenue expenditure ? " We may dispose of the second question first, since it is represented that it is covered by the decision of this court in favour of the assessee, viz., Addl. CIT v. Akkamba Textiles Limited [1979] 117 ITR 294. Having regard to this representation, we answer the second question in the affirmative, i.e., in favour of the assessee and against the Revenue. So far as the fir....

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....e Income-tax Officer as to whether the closing stock was strictly valued on the basis of the " works cost " method. The Income-tax Officer replied in the affirmative. While thus recording a finding that the assessee did not change its method of valuation of closing stock for any ulterior purpose or for reducing income for income-tax purposes, the Commissioner directed that the opening stock of the relevant accounting year should also be valued on the same "works cost" basis and the difference reckoned after the opening stock was revalued should be added. The assessee objected to the direction of the Commissioner of Incometax by filing an appeal before the Tribunal, and submitted that where, on an investigation and inquiry, the Revenue au....