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TMI Blog2012 (8) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... t liability to excise duty was an ascertained liability not eligible for deduction u/s 43B - Held that:- CIT(A) rightly observed that even if such excise duty as is payable on the uncleared goods is added under the provisions of section 145A and payment of excise duty in respect of such enhanced value of closing stock is not allowed as per sec. 43B, such unilateral treatment would throw out unrealistic picture of the profits during the year. No infirmity found in the order of the CIT(A) directing the AO to delete the addition - Decided against Revenue - ITA NOs. 849 and 913/Hyd/2010 - - - Dated:- 28-6-2012 - SHRI D. KARUNAKARA RAO, AND SHRI SAKTIJIT DAY, JJ. Assessee by : Shri S. Rama Rao Revenue by : Shri K. Vishwanatham ORD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings before us, the learned counsel for the assessee brought our attention to the copy of the remand report dated 24/02/2010 furnished by the Assessing Officer to the CIT(A) and read out the para placed immediately below the table at page 3 of the said report and the same reads as under:- As seen from the above, creditors do not appear to be genuine and requires verification particularly regarding the loans stated to have been received through cheques. This requires a prima-facie verif ication keeping in view the low turnovers the creditors are having and the high frequency of cheque transactions. Mentioning the above, the learned counsel for the assessee submitted that requirement of verification as highlighted by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce or other commodities and establish that the creditors have sufficient money to lend to the assessee. The assessee also required to furnish assessment particulars of the applicants/creditors to demonstrate that these are genuine transactions to the company. 7. We have considered the arguments of both the parties and perused the available material before us. There is no dispute on the fact of furnishing of confirmation letters and calling for remand report from the Assessing Officer by the First Appellate Authority. We have also perused about the requirement of conducting of verifications of the claims of the assessee with regard to the share applicants/cash creditors. It is the desire of the assessee to travel one more round bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(iv), the assessee had mentioned that the stock of finished goods had been valued at cost plus duties. The assessee had made certain provision towards excise duty as per the annexure-4 to its lr. Dt. 18/11/2008 and had claimed the same u/s 43B as expenditure. The Assessing Officer was of the view that the liability to excise duty so shown was an ascertained liability as on 31/03/06 and was therefore not eligible for deduction u/s 43B. He was also of the view that the excise duty had not been properly charged by the assessee. He, therefore, estimated the same at 18% and following the decision in the case of CIT Vs. British Paints Ltd., 188 ITR 14 as also the provisions of section 145A, he made an addition of Rs. 3,79,887/-. Aggrieved the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of sec. 43B. Respectfully, following the decision of Hon ble Madhya Pradesh High Court in the case of ACIT Vs. D and H Secherom Electrodes Pvt. Ltd., [2008] 173 Taxman 188 (MP) and the order of the Hon ble Jurisdictional ITAT (supra), the Assessing Off icer is directed to delete the estimation of Excise Duty made in respect of the closing stock of f inished goods, of the value of Rs. 3,79,887/-. Aggrieved by the order of the CIT(A), the revenue is in appeal before us. 12. After hearing both the parties and perusing the relevant material on record as well as the orders of the authorities below, we do not find any infirmity in the order of the CIT(A) in directing the Assessing Officer to delete the estimation of excise duty made in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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