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April 2008

Valuation of closing stock — Application to review the decision in CIT v. Hindustan Zinc Ltd. — Rejected

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
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4 Valuation of closing stock — Application to
review the decision in CIT v. Hindustan Zinc Ltd. — Rejected


[Hindustan Zinc Ltd. v. CIT, (2007) 295 ITR 453 (SC)]

The Supreme Court in CIT v. Hindustan Zinc Ltd., [(2007) 291
ITR 391] had held that goods should not be written down below the cost, except
where there is an actual or anticipated loss and if the fall in the price is
only such as it would reduce merely the prospective profits, there would be no
justification to discard the initial valuation at cost. The assessee’s
application to review the aforesaid judgment was rejected by the Supreme Court,
holding that no case for review was made out.

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