TaxTMI 
TaxTMI 
Inviting comments on the draft Form No. 6C for implementing the amendment made by the Finance Act, 2023 wrt Sub-section (2A) of the Section 142 of the Income Tax Act, 1961 regarding inventory valuation.
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....hat it is necessary so to do, he may, with the previous approval of the Pr Chief Commissioner or Chief Commissioner or Pr Commissioner or Commissioner direct assessee to have their accounts audited by an accountant. Form No. 6B has been prescribed in the Income-tax Rules 1962 ("the Rules") in this regard. 2. Vide Finance Act 2023, in order to ensure that inventory is valued in accordance with the various provisions of the Act, sub-section (2A) of section 142 of the Act was amended to enable Assessing Officer to direct the assessee to get inventory valued by a Cost Accountant, nominated by the Pr Chief Commissioner or Chief Commissioner or Pr Commissioner or Commissioner. Assessee is required to furnish the report of inventory valuation in the prescribed form duly signed and verified by the Cost Accountant. 3. Relevant amendments shall be carried out in Rule 14A and Rule 14B of the Rules to make the above provision operational. In addition, a draft Form No. 6C (form for inventory valuation report) has been formulated which is enclosed herewith. It is requested that all stakeholders as well as the general public may pr....
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....ant nominated by the Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner of Income-tax under clause (ii) of section 142(2A) of the Income-tax Act, 1961. Where any of the matters stated in this report is answered in the negative or with a qualification, the report shall state the reasons therefor. Information of the Assessee ANNEXURE Inventory Valuation Report of Cost Accountant 1 Address (Head Office and branches) a. b. C. 2. Date of incorporation 3. Nature of business 4. Details of principal products 1 Draft for comments 5. 6. 7. Details of books of account maintained with respect to inventory Method of accounting employed with respect to inventory maintained. Indicate whether there is any change from the method of valuation employed with respect to inventory maintained in the immediately two preceding previous years (i) Method of valuation of opening and closing stock of following inventory items used by the Assessee: a) Finished Goods / Stock-in-trade b) Work-in-progress (WIP) c) Raw materials d) By-products e) Intermediate Product f) ....
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....year 7 Quantity sold during the year 8 Quantity rejected during the year 9 Quantitative adjustments, if any * (add reasons) 10 Closing stock at the end of the year 11 Opening Work-in-Progress 12 Closing Work-in-Progress *(ii)(b) Quantitative adjustments - SNo. Finished products / Work-in-Progress Item 1 Item 2 Item 3 Item 4 1 If there are quantitative adjustments in (ii)(a), furnish the detailed reasons for quantitative adjustments Notes: 1. Add number of columns depending on the number of items 2. Separate quantitative details on the above lines should be given in respect of by-products, if any. 3. Where the assessee is a dealer in goods, quantitative details on the above lines should be given in respect of the goods dealt in. 4. Inventory of all such manufactured goods/traded goods/work-in-progress items that constitute top 80% of the value of total manufactured goods / traded goods / work-in-progress items respectively should be reported item-wise separately. Inventory of all other manufactured goods/traded goods / work-in-progress items constituting balance may be clubbed under "O....
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....la- Lower Value cement of (11) (10) x rate or (7) (8) rate or (12) (13) (Rs.) (Rs.) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) 1 RM 1 2 RM 2 3 RM 3 Total Note: Add or delete rows as per the number of Raw Material items (iv) Valuation of By-Products Sr. Description UOM Opening Stock Closing Stock Quantity NRV Value Quantity NRV Value (Rs.) (4)x(5) (Rs.) (7)x(8) (Rs.) (Rs.) (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 By-Product 1 2 By-Product 2 3 By-Product 3 Total NRV: Net Realisable Value Note: Add/Delete Rows as per the number of By-Products. (v) Valuation of Intermediate Products (IMP) Sr. Description Item UOM Opening Stock Code Qty COP NRV Lower of (6) Value Qty COP (5) x Closing Stock NRV Lower Value of (11) (10) x or (7) (8) or (12) (13) (Rs.) (Rs.) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) IMP 1 IMP 2 3 IMP 3 â˜....
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....ther Income Computation and Disclosure Standard; Shares, debentures and other financial instruments held as stock-in-trade which are dealt with by the Income Computation and Disclosure Standard on securities; Producers' inventories of livestock, agriculture and forest products, mineral oils, ores and gases to the extent that they are measured at net realisable value; 6 Draft for comments 13. Details of inventory valuation for the year under reporting by the Cost Accountant (wherever ICDS II is not applicable)- A. Inventory valuation for Assessees engaged in the Construction Contracts which are dealt with by the Income Computation and Disclosure Standard III Sr. Description Type of Completed units (i) Valuation of Completed Units Ready for Sale Subtype if Closing Stock any Opening Stock Qty Cost of the unit for each type NRV Value [(5) X lesser of ((6) or (7))] Qty Cost of the unit for each type NRV Value [(9) X lesser of ((10) or (11))] (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 1 Project 1 2 Project 2 3 Proj....
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.... not Value as per Cost Accountant Variation if any filed, then value as per audited accounts) Opening Closing Opening Closing Opening Closing (1) (2) (3) (4) (5) (6) (7) (8) (5)-(3) (6)-(4) 1 Completed Units Ready For Sale 2 Construction Work-in- progress 3 Construction Materials 4 Construction Fittings Total Impact on Profit or Loss Notes: Impact on Income Tax 1. Specify the method used to determine the stage of completion of contracts in progress. 2. In case of variation in the method adopted by the assessee, state reasons for variation. 3. Specify the amount by which profit or loss for the year would be affected by the changed valuation. 4. Any other relevant observation of the Cost Accountant. 80 Draft for comments B. Inventory valuation for Assessees engaged in the trading of Securities which are dealt with by the Income Computation and Disclosure Standard VIII. (i) Valuation of Shares held as Stock-in-trade Sr. Description Opening Stock Closing Stock Qty AC NRV Lower Value Qty AC NRV Lower Value of ....
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.... (3) Closing (4) Opening (5) Closing (6) Opening (7) Closing (8) (5)-(3) (6)-(4) 1 Shares 2 Debt Securities 3 Convertible Securities 4 Any other Security Total Impact on Profit or Loss Notes: Impact on Income Tax 1. Specify the method used to determine the Acquisition Cost and Net Realisable Value for each category of financial instruments. 2. In case of variation in the method adopted by the assessee, state reasons for variation. 3. Specify the amount by which profit or loss for the year would be affected by the changed valuation. 4. Any other relevant observation of the Cost Accountant. 5. Securities not listed on a recognized stock exchange; or listed but not quoted on a recognized stock exchange with regularity from time to time shall be valued at actual cost initially recognized. 10 10 Draft for comments C. Inventory valuation of livestock, agriculture and forest products, mineral oils, ores and gases, except those held by the trader of such inventories i. Valuation of Inventory of Livestock Sr. Description UOM Closing Stock Opening Stock Qu....