Unformatted text preview: evenue (Canada) v. Anaconda
America Brass Co Ltd ((1956) 34 ATC
America Brass Co Ltd 1956) 34 ATC
330. 18 General Principles Where opening and closing stocks have been
undervalued, the true profits can only be established
by raising both valuations (Ahmedabad New Cotton
Mills Ltd v. Bombay Commissioners of Income Tax 8
Base stock method (
) is not acceptable
(Patrick v. Broadstone Mills Ltd (1954) 35 TC 44).
Basis of stock valuation should be consistently
applied (Duple Motor Bodies Ltd v. Ostime 39 TC
537). Changes are acceptable, provided that there are
valid reasons, such as due to circumstance beyond the
control of the taxpayer.
19 Con’t Replacement basis is not acceptable
(Freeman, Hardy & Willis v. Ridgeway 47 TC
519). ‘Replacement cost’ = the estimated amount for
which, in the ordinary course of business, the
stock could be acquired / produced.
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- Spring '13
- Progressive Tax, Market Value