2019 (3) TMI 2083 - AT - Income Tax

Addition u/s 145A - loading excise duty on closing stock of work in progress - HELD THAT - The issue is now squarely covered by the decision of the Tribunal in the own case of the assessee for assessment year 2005-06 Ors. as held the assessee has not paid any excise duty on the closing work in progress and hence there was no question of loading any excise duty on estimation basis. Even otherwise if the value of the excise duty has to be included in the closing stock then the value of excise duty has also to be included in the opening stock and in that event there would be no difference in the result of the value of the opening stock and closing stock. Thus no justification in making the aforesaid addition - Appeals of the Revenue are dismissed.

Summary

In the case before the ITAT Chandigarh, the Revenue appealed against the Commissioner of Income Tax-2, Chandigarh's orders, which deleted additions made by the Assessing Officer under section 145A of the Income-tax Act, 1961. The issue concerned the inclusion of excise duty on the closing stock of work in progress. The Tribunal referenced its prior decision dated 14.5.2018, which concluded that since the assessee did not pay excise duty on the closing work in progress, there was no basis for estimating and adding excise duty. It was noted that if excise duty were to be included in the closing stock, it should also be included in the opening stock, resulting in no net difference. The Tribunal upheld the CIT (A)'s decision to delete the additions, citing precedents from the Delhi High Court in 'Purolator India Ltd.' and the Allahabad High Court in 'CIT Vs. Sangam Structurals Ltd.' Consequently, the appeals by the Revenue were dismissed as without merit.