2007 (6) TMI 196

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.... P. P. S. Janarthana Raja J.—This appeal is filed under section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income-tax Appellate Tribunal, Bench "A", Chennai, in I. T. A. No. 2966/Mds/04 dated September 1, 2006, raising the following substantial question of law : "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the ass....

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....ct ("the Act" in short). While completing the assessment, the Assessing Officer made an addition of Rs. 19,64,000 representing the reduction of profit due to the change in valuation of stock. Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income-tax (Appeals). The CIT (Appeals) dismissed the appeal and confirmed the order of the Assessing Officer. Aggrieved, the assess....

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....nd hence the Assessing Officer is right in his opinion that the amount of Rs. 19.64 lakhs representing reduction of profit was includible in the total income of the assessee. 4. Heard counsel. The Institute of Chartered Accountants of India by its Accounting Standard (AS-2) (Valuation of inventory), has prescribed the standard for valuation of inventory. According to this standard, the inventor....

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....ofitability of the company as compared to previous year. However, in succeeding years, there will not be any discrepancy on this account. When the change of accounting method is bona fide and also the same is recognised in accounting principle, the resultant variation in income cannot be forced to be taxed upon the assessee. This court in the case of CIT v. Carborandum Universal Ltd. [1984] 149 IT....