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NRI legal services, https://lexlords.com/property-documentation/. This process would continue until the asset is realised. In the course of the business however the asset appreciates or depreciates in value in accordance with the fluctuations of the market. The ultimate result of these operations so far as the asset itself is concerned would be no different. If however the market value basis is adopted for such Valuation, the asset on being valued at the market rate thereof at the close of the year might show a loss and this loss would be allowed by the Income-tax authorities in computing the profit or loss of the business.

If the cost price basis is adopted for the valuation of the stock-in-trade at the close of the year this appreciation or depreciation in the value as the case may be would not be reflected in the accounts. He had three sons, the eldest of whom was defendant No. It recites that the testator is aged 65 and his properties are all his own which he acquired from no nucleus of ancestral fund. The High Court dismissed the appeal with this variation that the jewels- such of them as existed-were held to belong to defendant No.

In substance what the will provides is that after his death, the A Schedule properties would go to his eldest son, the B Schedule properties to his second son and the properties described in Schedule C shall be taken by the youngest. It is in the light of these principles that we would pro- ceed now to examine the facts of this case. Held, that, as the assessee kept the accounts on the mercantile system the commission accrued to the assessee when the commission was credited to it in the accounts, and the subsequent carrying over of the amount of the commission to a suspense account pending the settlement of the dispute between the company and the assessee could not affect assessee's liability to be taxed on this income.

I took an appeal to the High Court of Madras. Because if regard be had to the various fluctuations in the market value which have been reflected in the accounts of the intermediate period, what the business actually gains or loses would be the difference between the cost price of the asset when it was brought in and the price at which it was sold when it was actually realised. The testator, it seems, had already given certain properties to the wives of his two brothers and to his own wife also.

Against this decision, the defedant No. This process of rectification would continue from' year to year until the asset was realised in a particular year of account when the actual price realised on the sale of the asset would be brought into account in that year. The will of his father under which defendant No. On the cost price basis of valuation all intermediate fluctuations of price during the interval between the bringing of the I asset in the business and the realisation of it would be eliminated and the only thing considered in the accounts would be the difference between the price of the asset when it was brought into the business and the price thereof when the asset was realised.

On the other hand, the market value basis would bring into account each year the fluctuations in the market value of the asset as at the close of every year of account until the asset was realised with the result that in each and every year of account a rectification would have to be made in the result of the trading of the previous year which was not correctly reflected in the accounts by reason of the assessee having adopted the market value obtaining at the close of the previous year as the value of the asset.

When the asset is realised the assessee would have to show the actual price realised by the sale of the asset in the books of account and the difference between the price thus realised and the value shown in the beginning of the year of account would be the profit or loss as the case may be, in regard to that asset and that profit or loss 31 230 would be allowed by the Income-tax authorities in the computation of profit or loss for that year of account. The will is a simple document.

from son to grandson hereditarily. So far as the business itself is NRI legal services - hop over to this site - concerned the asset which has been brought in is of a particular value at the date when it has been so brought in and it is then valued in the books of account at its cost. I got the two items of Schedule B properties is Ex. In either event, the assessee would have to carry over the asset in the books of account of the subsequent year at the valuation adopted at the close of the previous year and the assessee would not be allowed to change the basis of valuation thus adopted unless he chose to adopt at the end of the subsequent year or years valuation at the cost price or the market value thereof whichever was lower.

The sons are to enjoy the properties allotted to them with NRI Legal Services absolute rights and with powers of alienation such as gift, exchange, sale, etc. The only advantage which the assessee obtains would be that he would be able to anticipate in a particular year the loss that may be made on the asset in the following year or years, which however might have to be rectified in the following year or years if the prices rose again. P-1 and is dated the 6th of June.

The adoption of the one or the other basis of valuation would not however make any difference in the ultimate result.