In Brief
A partnership firm dealing in ship scrap materials dissolved by the death of one partner during the financial year 1992–93. The surviving partner inherited and continued the business. For assessment, the firm valued closing stock at cost price, which the Assessing Officer accepted. The Commissioner later invoked revisional jurisdiction under Section 263 to revalue the stock at market price, relying on precedent for dissolved firms. The High Court set aside this revision. The Supreme Court held that where a firm dissolves but the business continues, cost-based valuation of closing stock remains permissible. The Commissioner cannot exercise revisional jurisdiction merely because he disagrees with one of two plausible, lawful views. The appeals were dismissed with costs.
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