9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 1739 - AT - Income TaxAddition of excise duty on closing stock - AO observed that since the deduction of excise duty on closing stock was already allowed in the P L account, further deduction of the excise duty on closing stock in the computation of income u/s. 43B of the Act is not allowable and accordingly, he added back the amount to the income of the assessee - HELD THAT - We note that the deduction claimed in the earlier year i.e. AY 2005-06 was added back in the relevant assessment year under consideration i.e. AY 2006-07. This treatment is inconsonance with the ratio decidendi in Berger Paints India Ltd. 2004 (2) TMI 4 - SUPREME COURT We note that similar issues arose in subsequent year in assessee s own case for AYs. 2009-10, 2008-09 and 2007-08 and the Tribunal held that the treatment carried out by the assessee in respect of the excise duty as legally tenable. We note that in identical case the decision in the case of Exide Industries Ltd. 2013 (6) TMI 533 - ITAT KOLKATA was upheld by the Hon ble jurisdictional High Court in 2014 (1) TMI 1844 - CALCUTTA HIGH COURT and the CIT(A) has relied on the Tribunal s order in ordering deletion of the addition made by the AO. Therefore, we do not find any infirmity in the order passed by Ld. CIT(A) and we uphold the same. Therefore, appeal of revenue is dismissed.
Issues:
Appeal by Revenue against deletion of addition of excise duty on closing stock. Analysis: The sole issue in the revenue's appeal was the deletion of an addition of Rs.276,12,87,066 in respect of excise duty on closing stock. The assessee, engaged in various businesses, filed its return for AY 2006-07 initially declaring a total income of Rs.3041,42,53,870, later revised to Rs.3040,47,74,966. The AO found a claim of double deduction in excise duty on closing stock, resulting in under-assessment of Rs.276,12,87,066. The AO added this amount back to the income. However, the Ld. CIT(A) deleted the addition after considering the appellant's submission and case laws. The CIT(A) noted that the assessee had been following a practice of debiting the profit and loss account by excise duty on sales, passing a contra-entry to reverse the effect of excise duty component in opening and closing stock, resulting in no net effect on the profit and loss account. The CIT(A) referred to a previous year's ruling and upheld the deletion of the addition. The High Court's order in a related case supported the appellant's position, stating that the excise duty payment was deleted by the AO incorrectly as the method was in conformity with accounting principles and relevant tax laws. The High Court order confirmed by the Tribunal favored the appellant, leading to the deletion of the excise duty payment amounting to Rs.276,12,87,066. The revenue's appeal was dismissed. In summary, the Tribunal found that the excise duty paid on closing stock was claimed in the revised return with proper justification and confirmation. The treatment of adding back the amount in the following year was consistent with legal principles. Previous rulings and the High Court's decision in a related case supported the appellant's position. The Tribunal upheld the CIT(A)'s decision to delete the addition, dismissing the revenue's appeal. The Cross Objection filed by the assessee was dismissed as not pressed, resulting in the dismissal of both the revenue's appeal and the assessee's Cross Objection.
|
