| COURT: | Bombay High Court |
| CORAM: | B. P. Colabawalla J, S. C. Dharmadhikari J |
| SECTION(S): | 145 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Accounting Standards, ICAI, valuation of stock-in-trade |
| COUNSEL: | Dr. K. Shivram, Neelam Jadhav |
| DATE: | March 6, 2017 (Date of pronouncement) |
| DATE: | March 10, 2017 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 145: The average cost method of valuing inventories is an accepted method of valuation approved by the accounting standards issued by the ICAI. The AO is not entitled to disregard the method if the assessee has consistently followed the method | |
The Assessing Officer sought to question the method of accounting only because the assessee has not been regularly following the same or the income is not computed in accordance with the standards notified under subsection (2). We do not find that there was any material with regard to the standards and notified. It is only whether the assessee was consistent in following the method of accounting provided in subsection (1) of Section 145 of the Income Tax Act, 1961. If that is the other eventuality in which the Assessing Officer derives his power in terms of Section 145, then, in para 12 the Tribunal has found that the assessee has maintained proper books of account. No defect has been pointed out by the Assessing Officer either in the purchases or in the sales
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