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2008 (4) TMI 211 - HC - Income TaxAdjusting the unutilized MODVAT credit in the revaluation of opening stock - revenue had contended that Section 145-A provides for valuation of the Closing Stock and it has not provided any adjustment to be made in the valuation of the opening stock. According to revenue, assessee has got undue benefit by revaluation of opening stock same issue is settled in favor of assessee in various judgments in which revenue appeal is dismissed hence revenue appeal is also dismissed in instant matter
Issues:
Appeal under Section 260A of the Income Tax Act, 1961 regarding adjustment of unutilized MODVAT credit in the revaluation of opening stock. Analysis: The revenue filed an appeal against the order passed by the Income Tax Appellate Tribunal for the assessment year 1999-2000. The Assessing Officer had noted that MODVAT of Rs. 50,060/- was available to the respondent on 1.4.1998 but was not included in the closing stock value. Instead, the opening stock was increased by that amount. The Assessing Officer added Rs. 50,060/- on account of the effect of Section 145A of the Act, resulting in the completion of assessment at an income of Rs. 91,04,680/-. The CIT(A) upheld this decision, but the Income Tax Appellate Tribunal allowed the appeal of the assessee. The counsel for the revenue contended that Section 145-A does not provide for any adjustment in the valuation of the opening stock, and the assessee received undue benefit by revaluing the opening stock. However, the court referred to a previous judgment where a similar issue was settled, stating that no substantial question of law arises in the current appeal. The counsel for the revenue conceded that the matter had already been settled by a previous judgment of the court, thus leading to the dismissal of the appeal. Therefore, the court dismissed the appeal as no substantial question of law was found to be determined. The decision was based on the precedent set by a previous judgment on a similar matter, where the court had ruled in favor of the assessee.
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