TMI Blog1984 (3) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment on 18-11-1980 on the entire income of the firm from 1-11-1978 to 20-10-1979. One of the partners had died on 25-8-1979 and the assessee had pleaded that two separate assessments should be made which was eventually upheld in appeal and, consequently, the ITO made a revised assessment for the period 1-11-1978 to 25-8-1979 in conformity with the appellate decision. The firm had, dissolved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing stock of handloom cloth is Rs. 32,358 and gross profit at 12.9 per cent works out to Rs. 4,165 4,165 Closing stock of banians is Rs. 12,756 and gross profit at 17 per cent works out to Rs. 2,175 2,175 . 31,440 Thereafter the ITO gave a relief of Rs. 6,000 which it was stated was towards overhead expenditure and brought to tax the balance of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken over by the successor firm at the same value. The learned counsel submitted that even if the revaluation was permissible, the market value alone had to be taken for the stock. He submitted that the assessee-firm had been in existence for several years. At no stage the dead stock had been written off. Business done was in cut pieces. He stated that where cut pieces remained unsold for any leng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overheads. He, therefore, stated that in any view of the matter no further deduction was warranted. 6. We have considered the rival, submissions. When a firm is dissolved even if, stock was earlier valued at cost price, the ratio of, the decisions referred to go to show that the market value of the stock would have to be taken. What the ITO did was to apply the rate of gross profit of the year t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, we consider that a deduction of about 50 per cent would be a realistic appraisal of the market value of the stock giving due consideration for the factors urged and the fact that the value taken, originally was only the cost price. In round figures deduction to be given would be Rs. 15,000. Since the ITO has already given Rs. 6,000, we would allow a further deduction of Rs. 9,000. 7. The resu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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