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2017 (3) TMI 1184 - HC - Income TaxRevaluation of closing stock routed through profit and loss account - Held that:- Process of revaluation of stock by itself can not bring in any real profit as held in C.I.T. versus K.A.R.K. Firm (1933 (7) TMI 11 - RANGOON HIGH COURT) C.I.T. and Tribunal have examined the matter and accepted explanation of Assessee that it wanted to construct an office building on the said plot, hence transferred it from Current Assets Account to Fixed Assets Account by passing general entries. Further, as market value of plot is not much more in books while transferring plot to Fixed Assets, it was enhanced to ₹ 1,00,00,000/- and a cross entry was passed in the consequence. This contrary entry has been passed by debiting Quinton Road plot account and crediting Revaluation Reserve Account. There was some error which was rectified and it was shown to be part of Fixed Schedule and not part of entries. The view taken by C.I.T.(A) that revaluation of Fixed Assets does not lead to any taxable income of an Assessee could not be shown incorrect. The said value has also been accepted by Tribunal. This is findings of facts. - Decided in favour of Assessee.
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