COMMISSIONER OF INCOME TAX-GUJARAT-IIversusKWALITY STEEL SUPPLIERS COMPLEX

                          [2017] 3 S.C.R. 1022


A          COMMISSIONER OF INCOME TAX-GUJARAT-II
                                    v.
               KWALITY STEEL SUPPLIERS COMPLEX
                      (Civil Appeal No. 815 of 2007)
B                           MARCH 21, 2017
             [A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
         Income Tax Act, 1961 - s. 263 - Revision of orders prejudicial
  to Revenue - Valuation of closing stock - On facts, firm consisting
C of two partners - Dissolution of partnership firm owing to death of
  one of the partner - However, business continued to be carried 011
  by the surviving partner - Valuation of the closing stock at cost
  price, by the assessee in return - Said method accepted by the
  Assessing Officer - CIT in exercise of his revisional jurisdiction
   uls.263 directed the AO to value the closing stock at the market
D price - Tribunal upheld the same, however, the High Court set aside
   the order passed by the CIT - On appeal, held: When a t•.1siness
   continues, it may not be necessary to follow the market rate 10 value
   the closing stock - View taken by the Assessing Officer in accepting
   the book value of the stock-in-trade was a plausible and permissible
E view - Thus, the CIT could not exercise his powers uls.263 - Order
   passed by the High Court upheld.
          Dismissing the appeals, the Court
        HELD: 1.1 Section 263 of the Income Tax Act, 1961 is
  enacted to empower the Commissioner with the authority of
F revising the order of Assessing Officer, where the order is
  erroneous and the error has resulted in prejudice to the interests
  of the Revenue. As is clear from the language of the provision,
  there has to be a proper application of mind by the Commissioner
  to come to a firm conclusion that the order of the Assessing
  Officer is erroneous and prejudicial to the interests of the
G Revenue. This provision cannot be invoked to correct each and
  every type of mistake or error committed by the Assessing
  Officer. While interpreting the expression 'prejudicial to the
  interests of the Revenue', it is also held that order of the
  Assessing Officer cannot be termed as prejudicial simply because
    H
                                    1022
COMMISSIONER OF INCOME TAX-GUJARAT-II v. KWALITY                       1023
           STEEL SUPPLIERS COMPLEX

Assessing Officer adopted one of the courses permissible in law A
and it has resulted in loss of revenue, or where two views are
possible and the Assessing Officer has taken one view with which
the Commissioner did not agree. Where two view are possible
and the Assessing Officer has taken one view and the CIT again
revised the said order on the ground that he does not agree with B
the view taken by the Assessing Officer, in such circumstances
the assessment order cannot be treated as an order erroneous
or prejudical to the interest of the Revenue. Reason is simple.
While exercising the revisionary jurisdiction, the CIT is not
sitting in appeal. [Paras 7-9)(1028-F-G; 1029-B-E]
      Malabar Industrial Co. Ltd. v. Commissioner of Income            c
      Tax' [2000) 243 ITR 83; CIT v. Arvind Jewellers [2003)
      259 ITR 502 - referred to.
      1.2 In the instant case, the assessee-firm was constituted
with two partners viz., mother and son and it came to be dissolved
during assessment year because of the demise of one of the D
partners-the mother. The assessee in the return had valued the
closing stock at cost price. This method of valuation was accepted
by the Assessing Officer. According to CIT, the said method could
not be adopted in the case of a dissolved firm as in such a situation
closing stock is to be valued at market rate. If the approach of E
the Assessing Officer in accepting the cost based valuation of
closing stock was totally impermissible, then CIT was perhaps
right inasmuch as in such a situation, order of the Assessing
Officer becomes erroneous and also prejudicial to the interest of
the Revenue. [Para 10)(1030-F-G]
                                                                      F
      1.3 The business did not come to an end as the other
partner, viz., son, who inherited the share of the mother, continued
with the business. In a situation like this, there was no question
of selling the assets of the firm including stock-in-trade and,
therefore, it was not necessary to value stock-in-trade at market
price. [Para 16)(1032-E-F)                                            G
       1.4 The position which emerges from the *Sampatrama
case, reiterated in **Sakthi case is that when a business continues,
it may not be necessary to follow the market rate to valu~ the
closing stock as the reasons because of which the same is to be
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1024           SUPREME COURT REPORTS                          [2017] 3 S.C.R.


 A done are not available. Thus, in the instant case the vie':" taken
   by the Assessing Officer in accepting the book value of the stock-
   in-trade was a plausible and permissible view. In this scenario,
   the CIT could not exercise his powers under Section 263 of the
   Act. There is no fault with the judgment of the High Court. [Paras
 B 19-21][1034-B-C]
            **Sakthi Trading Co. v. Commissioner of Income Tax
            [2001] 250 ITR 871; *Sampatram v. Commissioner of
            Income Tax, West Bengal [1953] 24 ITR 481 - relied,
            on.
 c          A.L.A. Firm v. Commissioner of Income Tax (1991) 189
            ITR 285; Ramchari (GR.) and Co. v. Commissioner of
            Income Tax [1961] 41 ITR 142 - referred to.
                               Case Law Reference
             (1991) 189 ITR 285                 referred to      Para 1
 D
             (2000] 243 ITR 83                  referred to      Para 7
             (2003] 259 ITR 502                 referred to      Paras
             (2000] 243 ITR 83                  referred to      Para 9
                                                       '
             (1961) 41 ITR 142                  referred to      Para 13
 E
             (1953] 24 ITR 481                  relied on        Para 17
             (2001] 250 ITR 871                 relied on        Para 18
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 815
       of2007.
 F
             From the Judgment and Order dated 06.08.2004 of the High Court
       of Gujarat atAhmedabad in Income Tax Appeal No. 107 of2002
                                               WITH
             C. A. No. 4923 of2007.
 G           Y. P. Adhyaru, Sr. Adv., Mrs. Anil Katiyar, Adv. for the Appellant.
             Haresh Raichura, Adv. for the Respondent.
             The follwoing Judgment of the Court was delivered:

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                   ••   !!


 COMMISSIONER OF INCOME TAX-GUJARAT-II v. KWALITY                              1025
            STEEL SUPPLIERS COMPLEX

                             JUDGMENT                                          A
        1. The respondent-assessee was a registered firm engaged in the
business of sale of scrap of ship materials. The firm was constituted
with two partners, i.e., mother and son. During the period under
consideration, the firm was dissolved on 01.02.1 ~93 on account of the
death of one of the partners. At the time of dissolution, the firm had         B
valued the closing stock at cost price. The respondent-assessee filed
return ofincome showing total i, 'Come ofRs.16,41, 760/- for assessment
year 1993-1994. The relevant previous .year is financial year 1992-
1993. On this return, the assessment order was passed by the Assessing
Officer on 24.02.1995 under section 143(3) of the Income Tax Act,
1961 (hereinafter referred to as 'Act') accepting the method of valuation      C
adopted by the respondent-assessee. Subsequently, the Commissioner
of Income Tax (CIT) in exercise of his revisional jurisdiction under section
263 of the Act issued show cause notice dated 27 .02.1997 and directed
the Assessing Officer to value the closing stock at the time of dissolution
at the market price. He further observed in his order that the Assessing        D
 Officer had erred while passing the assessment order for the year 1993-
 1994. According to him, during the accounting year under consideration,
 the firm was dissolved, and therefore, the closing stock was to be valued
 at market rate in view of the decision of this Court in the case of 'A.L.A.
 Firm v. Commissioner of Income Tax [(1991) 189 ITR 285]. So, he
 added the average gross profit of 15 per cent to the disclosed value of        E
 the closing ofRs.12 crores and the same resulted in addition ofRs.1,82
 crores.
         2. The respondent-assessee questioned the validity of the order
  passed under Section 263 of the. Act taking the plea that revisional
  jurisdiction could not be exercised in this manner. However, the CIT F
  rejected the contention of the assessee and set .aside the assessment
  order with a direction to the Assessing Officer to pass fresh order in
  accordal').ce with the direction given in the order passed by CIT. This
  order of CIT is dated 20.03.1997. The assessee challenged the said
  order dated 20.03.1997 by filing appeal before the Income Tax Appellate G
  Tribunal (!TAT). ITAT dismissed the appeal on 28.04.2000. This order
  ofITAT was challenged before the High Court in the form of statutory
. appeal under Section 260A of the Act. The High Court has accepted
   the contention of the assessee and, thereby, set aside the revisional order
   dated 20.03.1997 passed by CIT. Against this order, the instant appeal
   arises.                                                                     H
1026             SUPREME COURT REPORTS                            [2017] 3 S.C.R.


 A              3. We have heard learned counsel for the parties. Though
       detailed submissions are made, it is sufficient to note that learned counsel
       for the Revenue has basically rested his arguments adopting the reasons
       given by the ITAT whereas learned counsel for the assessee submitted
       that having regard to the discussion contained in the judgment of the
       High Court, the same should be upheld.
 B
           4. It is clear from the above that this Court is concerned with the
   validity of exercise of jurisdiction by CIT under Section 263 of the Act.
   Whereas the CIT, while exercising this power, relied upon the judgment
   of this Court in A.LA. Firms (supra), the High Court while upsetting the
   said order referred to the judgment of this Court in 'Sakthi Trading Co.
 C v. Commissioner of Income Tax [(200 I) 250 ITR 871].
             5. A perusal of the judgment of the High Court would reveal that
       two substantial questions of law were considered by the High Court,
       which are as follows:

D            "i. Whether in the facts and circumstances of the case, the ITAT
             was right in law, in holding that the CIT has validly exercised
             revisional jurisdiction under section 263 of the Income Tax Act,
             1961?
             ii. Whether, in the facts and circumstances of the case, the ITAT
 E           was right in law, in holding that closing stock was to be valued at
             market price on the ratio of the decision of the Supreme Court in
             ALA Firm v. CIT reported in 189 ITR 285 though the business
             was continued after the dissolution of the firm?"
              6. Since, validity of exercise of powers under Section 263 of the
       Act is involved, we reproduce that provision hereunder:
 F
             263. Revision of orders prejudicial to revenue.- (l) The
             Principal Commissioner or Commissioner may call for and examine
             the record of any proceeding under this Act, and if he considers
             that any order passed therein by the Assessing Officer is erroneous
             in so far as it is prejudicial to the interests of the revenue, he may,
 G
             after giving the assessee an opportunity of being heard <'.nd after
             making or causing to be made such inquiry as he deems necessa1y,
             pass such order thereon as the circumstances of the case justify,
             including an order enhancing or modifying the assessment, or
             cancelling the assessment and directing a fresh assessment.
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COMMISSIONER OF INCOME TAX-GUJARAT-II v. KWALITY                        1027
           STEEL SUPPLIERS COMPLEX

   Explanation.-For the removal of doubts, it is hereby declared A
   that, for the purposes of this sub-section,-
   (a) an order passed on or before or after the 1st day ofJune, 1988
   by the Assessing Officer shall include-
   (i) an order of assessment made by the Assistant Commissioner B
   or Deputy Commissioner or the Income-tax Officer on the basis
   of the directions is,•1ed by the Joint Commissioner under section
   144A;
   (ii) an order made by the Joint Commissioner in exercise of the
   powers or in the performance of the functions of an Assessing C
   Officer conferred on, or assigned to, him under the orders or
   directions issued by the Board or by the Principal Chief
   Commissioner or Chief Commissioner or Principal Director
   General or Director General or Principal Commissioner or
   Commissioner authorised by the Board in this behalf under section
   120;                                                              D
   (b) "record" shall include and shall be deemed always to have
   included all records relating to any proceeding under this Act
   available at the time of examination by the Principal Commissioner
   or Commissioner;
                                                                        E
   (c) where any order referred to in this sub-section and passed by
   the Assessing Officer had been the subject matter of any appeal
   filed on or before or after the !st day ofJune, 1988, the powers of
   the Principal Commissioner or Commissioner under this sub-section
   shall extend and shall be deemed always to have extended to
   such matters as had not been considered and decided in such F
   appeal.
   Explanation 2.- For the purposes of this section, it is hereby
   declared that an order passed by the Assessing Officer shall be
   deemed to be erroneous in so far as it is prejudicial to the interests
   of the revenue, if, in the opinion of the Principal Commissi1•11cr or G
   Commissioner,-
   (a) the order is passed without making inquiries or verification
       which should have been made;

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1028           SUPREME COURT REPORTS                             (2017] 3 S.C.R.


 A         (b) the order is passed allowing any relief without inquiring into
               the claim;
            (c) the order has not been made in accordance with any order,
                direction or instruction issued by the Board under section 119;
                or
 B          (d) the order has not been passed in accordance with any decision
                which is prejudicial to the assessee, rendered by the jurisdictional
                High Court or Supreme Court in the case of the assessee or
                any other person.                                                 ·
            (2) No order shall be made under sub-section (I) after the expiry
 c          of two years from the end of the financial year in which tl:ie order
            sought to be revised was passed.
            (3) Notwithstanding anything contained in sub-section (2), an order
            in revision under this section may be passed at any time in the
            case of an order which has been passed in consequence· of, or to
 D          give effect to, any finding or direction contained in an order of the
            Appellate Tribunal, National Tax Tribunal, the High Court or the
            Supreme Court.
             Explanation.-In computing the period oflimitation for the purposes
             of sub-section (2), the time taken in giving an opportunity to the
 E           assessee to be reheard under the proviso to section 129 and any
            ·period during which any proceeding under this section is stayed
             by an order or injunction of any court shall be excluded."     ·
            7. This provision has come for interpretation time and again before
    this Court. Such a power given to the Commissioner to revise the order
  F of the Assessing Officer is held to be constitutionally valid having regard
    to the fact that the Department has no right of appeal to the CIT (A)
    against any order passed by the Assessing Officer. It is for this reason,
    Section 263 is enacted to empower the Commissioner with the authority
    of revising the order, of Assessing Officer, where the order is erroneous
    and the error has resulted in prejudice to the interests of the Revenue.
  G
    As is clear from the language of the provision, there has to _be a proper
    application of mind by the Commissioner to come to a firm conclusion
     that the order of the Assessing Officer is erroneous and prejudicial to
     the interests of the Revenue. Thus, two conditions need to be satisfied
     for invoking such a power by the Commissioner, which are:
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COMMISSIONER OF INCOME TAX-GUJARAT-II v. KWALITY                         1029
           STEEL SUPPLIERS COMPLEX

      (i) the order of the Assessing Officer sought to be revised is      A
          erroneous; and
      (ii) it is prejudicial to the interests of the Revenue.
      (See 'Malabar Industrial Co. Ltd. v. Commissioner of Income
      Tax' [(2000) 243 ITR 83])
                                                                            B
       8. At the same time, this Court has also laid down that this
provision cannot be invoked to correct each and every type of mistake
or error committed by the Assessing Officer. While interpreting the
expression 'prejudicial to the interests of the Revenue', it is also held
that order of the Assessing Officer cannot be termed as prejudicial simply
because Assessing Officer adopted one of the courses permissible in C
law and it has resulted in loss of revenue, or where two views are possible
and the Assessing Officer has taken one view with which the
Commissioner did not agree.
      (See CITv. Arvind Jewellers [(2003) 259 ITR 502])
                                                                            D
       9. It is clear from the above that where two view are possible and
the Assessing Officer has taken one view and the the CIT again revised
the said order on the ground that he does not agree with the view taken
by the Assessing Officer, in such circumstances the assessment order
cannot be treated as an order erroneous or prej udical to the interest of
the Revenue. Reason is simple. While exercising the revisionary E
jurisdiction, the CIT is not sitting in appeal. This has been so eloquently
explained in the case of 'Malabar Industrial Co. Ltd. v. Commissioner
ofIncome Tcix' [(2000) 243 ITR 83] in the following words:
       "A bare reading of this provision makes it clear that the prerequisite
       to the exercise ofjurisdiction by the Commissioner suo moto under F
       it, is that the order of the Income Tax Officer is erroneous in so
       far as it is prejudicial to the interests of the Revenue. The
       Commissioner has to be satisfied of twin conditions, namely, (i)
       the order of the Assessing Officer sought to be revised is erroneous:
       and (ii) it is prejudicial to the interests of the Revenue. If one of G
       them is absent if the order the Income Tax Officer is erroneous
       but is not prejudicial to the Revenue to if it is not erroneous but is
       prejudicial to the Revenue-recourse cannot be had to section
        263(1) of the Act.
       There can be no doubt that the provisions cannot be invoked to
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1030          SUPREME COURT REPORTS                          [2017] 3 S.C.R.


A          correct each and every type of mistake or error committed by the
           Assessing Officer, it is only when an order is erroneous that the
           section will be attracted. An incorrect assumption of acts or an
           incorrect application of law will satisfy the requirements of the
           order being erroneous. In the same category fall orders passed
           without applying the principles of natural justice or without
B
           application of mind.
           The phrase 'prejudicial to the interests of the Revenue' is not an
           expression of art and is not defined in the Act. Understood in its
           ordinary meaning it is of wide import and is not confined to loss of
           tax."
c
          "The scheme of the Act is to levy and collect tax in accordance
          with the provisions of the Act and this is entrusted to the Revenue.
          If due to an erroneous order of the Income Tax Officer, the
          Revenue is losing tax lawfully payable by a person, it will certainly
          be prejudicial to the interests of the Revenue. The phrase
D         'prejudicial to the interests of the Revenue' has to be read in
          conjunction with an erroneous order passed as a consequence of
          an order of the interests of the Revenue. For example, when an
          Income Tax and it has resulted in loss of Revenue; or where two
          views are possible and the Income Tax Officer has taken one
E         view with which the Commissioner does not agree, it cannot be
          treated as an erroneous order prejudicial to the interests of the
          Revenue, unless the view taken by the Income Tax Officer is
          unsustainable in law."
         10. In the instant case, as already noted above, the assessee-firm
F was constituted with two partners viz., mother and son and it came to be
  dissolved during assessment year because of the demise of one of the
  partners. The assessee in the return had valued the closing stock at cost
  price. This method of valuation was accepted by the Assessing Officer.
  According to CIT, the aforesaid method could not be adopted in the
  case of a dissolved firm as in such a situation closing stock is to be
G valued at market rate. If the approach of the Assessing Officer in
  accepting the cost based valuation of closing stock was totally
  impermissible, then CIT was perhaps right inasmuch as in such a situation,
  order of the Assessing Officer becomes erroneous and also prejudicial
  to the interest of the Revenue.
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COMMISSIONER OF INCOME TAX-GUJARAT-II v. KWALITY                              1031
           STEEL SUPPLIERS COMPLEX

       11. The moot question therefore is as to whether the view taken A
by the Assessing officer in accepting the valuation of the closing stock
at cost price was a plausible view in the circumstances of this case. If
it was so, then CIT could not exercise his revisionary jurisdiction under
Section 263 of the Act.
      12. For this purpose, we may first discuss the judgment in the          B
case of A.L.A. Firm (supra) which has been referred to by the CIT
while revising the order of the Assessing Officer.
        13. In ALA Firm's case, this Court discussed the judgment of the
Madras High Court in 'Ramchari (GR.) and Co. v. Commissioner of
Income Tax [( 1961) 41 ITR 142] and pointed out that in the said case, c
the High Court had held that privilege of valuing the opening and closing
stocks in a consistency manner is available only to continuing business
and that it cannot be adopted where the business comes to an end and
the stock-in-trade has to be disposed of in order to determine the exact
position of the business on the date of closure. The Madras High Court
has also held that the partnership concern which dissolves its business in D
the course of the accounting year forms a close parallel to the case of a
firm which goes into liquidation. In both the cases all the assets and
 stock-in-trade of business will have to be sold and their value realised
 for the purposes of ascertaining the true state of the profits to losses of
 the business.                                                               E
      14. Following discussion of this Comi in ALA Firm's case, in the
aforesaid process, becomes relevant:
       "Even in a continuing business, the valuation at market value is
        permissible only when it is less than cost; it is not quite certain
        whether the rules permit an assessee if he so desires to value         F
        closing stock at market value where it is higher than cost. But, in
        either event, it is allowed to be done because its effect can be
        offset over a period of time. But here, where the business comes
      . to a close, no future adjustment of an over or under valuation is
        possible".                                                             G
                                  xxx
       We, however, find substance in the second considerations that
       prevailed with the High Court. The decision in Muhammad Ussain
       Sahib v. N. Abdul Gaffor Sahib, AIR 1950 Mad 758; [1950] I ML
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1032             SUPREME COURT REPORTS                           [2017] 3 S.C.R.


A             J 81 correctly sets out the mode of taking accounts regarding the
              assets of a firm. While the valuation of assets during the
              subsistence of the partnership would be immaterial and could even
              be national, the position at the point of dissolution is totally
              different.(atp. 759):
B            But the situation is totally different when the firm is dissolved or
             when a partner retires. The settlement of his account must be
             not on a national basis but on a real basis, that is every asset into
             money and the account of each partner settled on that basis ...
             The assets have to be valued of course, on basis of the market
             value on the date of the dissolution... "
c
             This applies equally well to assets which constitute stock-in-trade.
             There can be no manner of doubt that, in taking accounts for
             purposes of dissolution, the firm and the partners, being commercial
             men, would value the assets only on a real and not at cost or at
             their other value appearing in the books."
D
              15. It is clear from the above that the.judgment in ALA Firm's
       case proceeds on the basis that with the dissolution of the firm, the
       business of the firm comes to an end and in that situation, the cost meth9d
       of valuing the stock was not permissible.
E        16. The question is as to whether this situation would apply in the
  instant case where the partnership firm stood dissolved by the operation
  oflaw in view of the death of one of the partners, i.e., the mother, but
  the business did not come to an end as the other partner, viz., son, who
  inherited the share of the mother, continued with the business. In a
  situation like this, there was no question of selling the assets of the firm
F including stock-in-trade and, therefore, it was not necessary to value
  stock-in-trade at market price.
         17. The purpose of adopting a particular valuation of the closing
  stock is succinctly explained by this Court in the case of' Sampatram v.
  Commissioner of Income Tax, West Bengal' [ 1953 (24) ITR 481] as
G follows:
             "It is wrong to assume that the valuation of the closing stock at
             market rate has for its object, the bringing into charge any
             appreciation in the value of such stock. The true purpose of
             crediting the value ofunsold stock is to balance the cost of those
H
COMMISSIONER Of INCOME TAX-GUJARAT-ll v. KWAL!TY                       1033
           STEEL SUPPLIERS COMPLEX

   goods entered on the other side of the accounts at the time of A
   their purchase, so that the cancelling out of the entries relating to
   the same stock from both sides of the account would leave only
   the transaction on which there have been actual sales in the course
   of the year showing the profit or loss actually realized on the year
   trading. As pointed out in paragraph 8 of the Report of the
                                                                          B
   Committee Financial Risks attaching to the holding of the Trading
   Stocks 1919, as the entry for stock which appears in a trading
   account is merely intended to cancel the charge for the goods
   purchased which have not been sold, it should necessarily represent
    the cost of the goods. If it is more or less than the cost, then the
   effect is to state sold at the incorrect figure ... From this rigid c
   doctrine one exception is very generally recognized on prudential
   grounds and is now fully sanctioned by custom, viz., the adoption
   of the market value at the date of making up accounts, if that
    value is less than cost. It is of course an anticipation of the loss
    that may be made on those goods in the following year, and may
                                                                          D
    even have the effect, if prices rise again, of attributing to the
    following year's results a greater amount of profit than the actual
    cost price of the good in question (extracted in paragraph 281 of
    the report Committee of the Taxation ofTrading Profits presented
    to British Parliament in April 1951 ). While anticipated loss is thus
    taken into account, anticipated profit in the shape ofappreciated E
    value of the closing stock is not brought into the account, as no
    prudent trader would care to show increased profit before it actual
    realization. This is the theory underlying the rule that the closing
    stock is to be valued at cost or market price whichever is the
     lower, and it is now generally accepted as an established rule of
     commercial practice and accountancy. As profits for income tax F
     purposes are to be computed in conformity with the ordinary
     principles of commercial accounting. Unless of course, such
     principles have been superseded or modified by legislative
     enactments, unrealized profits by legislative enactment, unrealized
     profits in the shape of appreciated value of goods remaining 1msold G
     at the end of an accounting year and carried over to the following
     year's account in a business that is continuing are not brought into
     the charge as a matter of practice, though as already stated loss
     due to a fall in price below cost is allowed even if such loss has
      not been actually realized."
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1034                SUPREME COURT REPORTS                      [2017] 3 S.C.R.


 A           18. It is this legal position which was reiterated in Sakthi Trading
       Co. (supra).
              19. The position which emerges from the aforesaid is that when a
       business continues, it may not be necessary to follow the market rate to
       value the closing stock as the reasons because of which the same is to
 B     be done are not available.
             20. When this position becomes clear, it follows that in the instant
       case the view taken by the Assessing Officer in accepting the book
       value of the stock-in-trade was a plausible and permissible view. In this
       scenario, the CIT could not exercise his powers under Section 263 of
 c     the Act.
             21. We, thus, do not find any fault with the judgment of the High
       Court. The appeals are dismissed with costs.


       Nidhi Jain                                                Appeals dismissed.