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Issues:
1. Dispute over the change in accounting method for valuation of closing stock. 2. Application under section 256(1) of the Income-tax Act for reference of a question of law. 3. Acceptance of the decision by the revenue regarding the valuation of closing stock. Analysis: The High Court dealt with an appeal by the revenue against an order passed by the Income-tax Appellate Tribunal related to the assessment year 1991-92. The issue stemmed from the assessee changing its accounting method for valuing closing stock by excluding excise duty on unsold goods. The Assessing Officer disputed this change, which was upheld by the Commissioner of Income-tax (Appeals). However, the Tribunal ruled in favor of the assessee, citing a precedent in ITO v. Food Specialities Ltd. The revenue had filed an application under section 256(1) seeking reference of a legal question arising from the Tribunal's decision, but failed to provide details to the Court despite multiple opportunities. The Court noted the absence of the application and proceeded with the appeal. The assessee argued that the authorities erred in rejecting the valuation method and contended that excise duty should be deducted to comply with section 43B of the Act. The Court refrained from commenting on the first issue related to the assessment year 1984-85, focusing solely on the alternative submission. It referenced a previous case, Indian Communication Network (P.) Ltd. v. IAC, where a similar issue had been addressed. The assessee highlighted the Supreme Court's observation in Berger Paints India Ltd. v. CIT that the revenue did not challenge the decision in Indian Communication Network (P.) Ltd.'s case. Given the revenue's acceptance of the precedent forming the basis of the Tribunal's decision, the Court concluded that no substantial legal question arose for consideration. Therefore, the Court dismissed the appeal, affirming the Tribunal's decision in favor of the assessee.
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