what is the definition of scrap???????
how should we determine that any material lying in the godown at the end of the year is scrap or closing stock???
suppose that i m a dealer in cloth, i purchase 100mm cloth out of which i use 95mm for production and i want to consider the other 5mm as scrap but the income tax officer says that it should be considered as closing stock of raw material
so what should i consider the 5 mm cloth (scrap or closing stock of raw material)????
are there any guidelines issued regarding how should we determine scrap????
CAclubindia
