TMI Blog1999 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is against the order of the learned CIT, dt. 30th March, 1995, invoking the jurisdiction invested under s. 263 of the IT Act, 1961. The facts of the case are as under: In this case the assessment was completed on 9th March, 1993, under s. 143(3). The assessee-firm consisted of four partners was constituted on 4th Dec, 1989. Prior to this, there was another firm consisting of only two partners, viz., A.J. Varghese and A.V. Jose. Varghese expired on 4th Dec, 1989, leaving Sri Jose as the sole surviving partner. Subsequently, Sri Jose and the legal heirs of late Varghese executed a dissolution deed on 8th Jan., 1990, dissolving the partnership w.e.f. 4th Dec, 1989. As per this deed Sri Jose took over the entire business of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new partners had joined the firm on 4th Dec, 1989, itself and as such there was no interregnum between the dissolution of the old firm and the constitution of the new firm. It was the further case of the assessee that if the opening stock value in the hands of the assessee is taken at cost, it would be tantamount to assessing the same amount twice in the hands of the dissolved firm and again in the hands of the assessee. The learned CIT, however, did not accept the contentions of the assessee and held that though for the purpose of assessment of the dissolved firm the closing stock was valued at market value, the stock was not taken over by the new firm at market value. It continued to be valued at cost. As such, the learned CIT held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 ITR 135 (SC), the Hon'ble Supreme Court held that the finding of the Tribunal as to the valuation of the stock, although recorded subsequently to the appellate order of the AAC, could be taken as forming part of the record of the appeal and taken into account for the purpose of correcting the mistake under s. 35, as to the value of the opening stock for the asst. yr. 1960-61, apparent from that record. Though the judgment was rendered while dealing with the rectification of the mistake, the principle laid down is clear that closing stock of an year becomes the opening stock of the subsequent year. If this is taken to its logical conclusion, the conclusion of the CIT that the value of the closing stock for the first part of the year of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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