diff --git a/erpnext/public/js/controllers/transaction.js b/erpnext/public/js/controllers/transaction.js
index a4719119e83..ac0287d05a5 100644
--- a/erpnext/public/js/controllers/transaction.js
+++ b/erpnext/public/js/controllers/transaction.js
@@ -216,12 +216,17 @@ erpnext.TransactionController = erpnext.taxes_and_totals.extend({
 			// barcode cleared, remove item
 			d.item_code = "";
 		}
-		this.item_code(doc, cdt, cdn);
+		this.item_code(doc, cdt, cdn, true);
 	},
 
-	item_code: function(doc, cdt, cdn) {
+	item_code: function(doc, cdt, cdn, from_barcode) {
 		var me = this;
 		var item = frappe.get_doc(cdt, cdn);
+
+		// clear barcode if setting item (else barcode will take priority)
+		if(!from_barcode) {
+			item.barcode = null;
+		}
 		if(item.item_code || item.barcode || item.serial_no) {
 			if(!this.validate_company_and_party()) {
 				cur_frm.fields_dict["items"].grid.grid_rows[item.idx - 1].remove();
diff --git a/erpnext/stock/doctype/item/item.json b/erpnext/stock/doctype/item/item.json
index 9f2c60c2dae..2d6dae205a6 100644
--- a/erpnext/stock/doctype/item/item.json
+++ b/erpnext/stock/doctype/item/item.json
@@ -144,6 +144,30 @@
    "set_only_once": 0, 
    "unique": 0
   }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "fieldname": "barcode", 
+   "fieldtype": "Data", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Barcode", 
+   "length": 0, 
+   "no_copy": 1, 
+   "permlevel": 0, 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
   {
    "allow_on_submit": 0, 
    "bold": 0, 
@@ -406,30 +430,6 @@
    "set_only_once": 0, 
    "unique": 0
   }, 
-  {
-   "allow_on_submit": 0, 
-   "bold": 0, 
-   "collapsible": 0, 
-   "fieldname": "barcode", 
-   "fieldtype": "Data", 
-   "hidden": 0, 
-   "ignore_user_permissions": 0, 
-   "ignore_xss_filter": 0, 
-   "in_filter": 0, 
-   "in_list_view": 0, 
-   "label": "Barcode", 
-   "length": 0, 
-   "no_copy": 1, 
-   "permlevel": 0, 
-   "print_hide": 0, 
-   "print_hide_if_no_value": 0, 
-   "read_only": 0, 
-   "report_hide": 0, 
-   "reqd": 0, 
-   "search_index": 0, 
-   "set_only_once": 0, 
-   "unique": 0
-  }, 
   {
    "allow_on_submit": 0, 
    "bold": 0, 
@@ -2228,8 +2228,8 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 1, 
- "modified": "2016-05-12 15:33:02.407671", 
- "modified_by": "umair@erpnext.com", 
+ "modified": "2016-06-02 14:48:46.128121", 
+ "modified_by": "Administrator", 
  "module": "Stock", 
  "name": "Item", 
  "owner": "Administrator",