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Stock valuation

Suresh Pai S (Tax Consultant) (1029 Points)

12 September 2017

2)As per sec 145A of the Income Tax Act,1961 value of VAT needs to be included in
closing stock. Correct or incorrect?

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3 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 12 September 2017

No...
Stock valuation is basic value only. Tax amount is not included in stocks. It's not a current asset.

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Sanny Vora (16 Points)
Replied 12 September 2017

if concern follows exclusive method of accounting then it is contradictory to 145a and one has to report on form 3cd that due to exclusive system there is no impact on profit or gain

SURESH HINDOCHA (CA) (22 Points)
Replied 13 September 2017

However as per ICDS II,now it is mandatory to include the same just for reporting purpose in 3CD.The same would increase the income and taxes are to be paid accordingly.However if you still deviate the standard,a note must be provided for such deviation.