Saturday, June 11, 2011

Closing stock of an erstwhile firm converted into stock-in-trade

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Closing stock of an erstwhile firm converted into stock-in-trade by a proprietorship concern will have to be valued at the market value.


Income-tax : On dissolution of a firm closing stock has to be valued on the basis of real value i.e., market value, which is independent of the fact whether or not the erstwhile partners of a dissolved firm continue to do business with assets received on dissolution [Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock] - [2011] 10 taxmann.com 126 (Delhi)
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