TMI Blog1974 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1959-60, the corresponding year being S.Y. 2014. The assessee is an individual doing business in hardware. He started the business in S.Y. 2011, and he was assessed for the assessment years 1956-57, 1957-58 and 1958-59 in respect of the income from his said business. The assessment for the year 1959-60 was completed on 29th of July, 1961, on a sum of Rs. 26,554. It appears that in the course of the assessment proceedings for the assessment year 1960-61, the Income-tax Officer found that the assessee had valued his stock neither at the cost nor it the market price, nor at " cost or market price whichever was lower ". For that assessment year an addition of a sum of Rs. 28,239 was made to the closing stock and an addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and it was contended that while adjusting the under-valuation of the closing stock in S.Y. 2014, relevant to the assessment year 1959-60, the income-tax authorities should have gone a step further and re-valued the opening stock as well. The Tribunal, however, rejected the contention of the assessee on two grounds. It first took the view that in tracing the under-valuation to its original source there would be a difficulty of the bar of limitation prescribed by section 34 and, secondly, it held that in the revised return, which was filed by the assessee before the Income-tax Officer pursuant to the notice under section 34 of the Act, the assessee had merely revalued the closing stock and he himself had filed such a revised return which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culty, did not arise at all in the instant case inasmuch as the reassessment that was made by the Income-tax Officer was for the assessment year 1959-60, and it was in respect of the opening stock of that very assessment year that an adjustment on account of under-valuation of the opening stock was sought by the assessee. It is not possible to accept this contention of Mr. Patil for the reasons we shall presently indicate. There is no doubt that the correct position in law has been indicated by the Privy Council in its decision in Commissioner of Income-tax v. Ahmedabad New Cotton Mills Co. Ltd. The principle has been enunciated by the Privy Council thus: " When the opening and closing stocks of a business are both undervalued, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he closing stock for the said period. When this aspect was noticed by him, the Income-tax Officer felt that income had escaped assessment for the assessment year 1959-60 inasmuch as the opening stock for the accounting period relevant to the assessment year 1960-61 would be the closing stock for the accounting period relevant for the assessment year 1959-60 and, therefore, he issued a notice under section 34 of the Act to the assessee. It was in response to this notice that the assessee himself filed a revised return in which he accepted the aspect which was realised by the Income-tax Officer and himself revalued the closing stock for the assessment year 1959-60. It was, therefore, for the assessee himself to have filed a revised return sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation was in S. Y. 2011 which under-valuation had progressively increased during the subsequent years. Since the revised return in which the assessee had shown revaluation of the closing stock for the accounting year relevant to the assessment year 1959-60 had been filed by the assessee himself, which was accepted by the lower authorities, we do not think that the assessee could have been allowed to raise this contention for the first time at the appeal stage and the Appellate Assistant Commissioner as well as the Tribunal, in our view, were right in rejecting that contention. It was urged by Mr. Patil that the bar of limitation which has been indicated by the Tribunal in its order could not really apply to revaluation of the opening s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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