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TMI Blog2013 (7) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee, M/s. Lakshmi Sugar Mills Co. Ltd. is a limited company and derives income from manufacturing of crystal sugar and from house property. The Assessee filed its return of income on 25.10.2011 declaring a loss of Rs 28,36,167/- for the relevant year and the same was assessed under the provisions of Section 143(3) of the Act. 3. It was found, during the assessment proceedings, that Assessee had claimed a sum of Rs.2,34,567/- out of sales amount on the head of 'Molasses Storage Fund' and it was asked to furnish justification for claiming the said expenses. The Assessee was, further, asked to furnish details of such expenditure towards the specific purposes. However, the specified details were not provided by the Assessee; therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. It is pertinent to mention here that the tax audit of the Assessee, indicated the total excise duty to be levied on closing stock was Rs. 2,80,56,430/- out of which Rs. 2,10,64,447/- was paid. Thus, the balance amount remained outstanding. Moreover, the Assessee failed to furnish the details of this outstanding amount and the same has not been considered by the ITAT in the impugned order. In CIT v. English Electric Company of India Ltd. reported in (2000) 243 ITR 512 (Mad), it was held that the assessee was not entitled to deduction of unpaid tax from value of the closing stock. Therefore, the Appellant argued that the ITAT has erred in deleting the addition of the abovesaid amount. 6. Reliance was placed on the decision of Chain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellant submits that all items had to be valued in accordance with provisions of Section 145A of the Act and if any tax, duty, etc enumerated in Section 43B was payable and not paid before the due date, was required to be disallowed as per the provisions of the Act. 8. The assessee argues that no entry was been booked, relating to excise duty leviable at the time of removal of goods from the factory, nor was any expenditure claimed. Furthermore, Section 43B and Section 145A are two different sections and cannot be read together. Hence, the amount directed to be deleted by ITAT is correct and should be upheld by this Court. Therefore, there is no error on the part of the ITAT in holding that Section 43B is not applicable in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t necessary. 11. Section 145A and its effect was explained by the CBDT in its Circular No. 772 dated 23.12.1998. The relevant part of the circular reads as follows: "52. Method of accounting in certain cases. 52.1. The issue relating to whether the value of the closing stock of the inputs work-in-progress and finished goods must necessarily include the element for which MODVAT credit is available, has been a matter of considerable litigation over the years. 52.2 Consequent with the other provisions of the Act, with a view to put an end to this point litigation and in order to ensure that the value of opening and closing stock reflect the correct value, a new section 145A is inserted. This section provides that the valuation of purchase, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation.-For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment. (b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received." Section 145 of the Act obliges every assessee to maintain, subject to accounting standards which may be notified by the Central Government, books of accounts on cash or mercantile basis. Section 145-A begins with a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not possible to state that under the Excise Act, the duty has become due and payable only by operation of section 3 simplicter. If Section 3 of the Excise Act is considered to be the only charging section and section 4 of the Excise Act is considered as only a provision for assessment, the charge levied by section 3 of the Excise Act cannot be brought home. Section 3 and 4 have to be read together to bring the charge home. The charge is partially embedded in both the provisions". 15. In the present case, the sum of Rs. 69,91,983/- no doubt was unpaid; however, the assessee's contention is not merited, because the goods were admittedly removed, and therefore the duty was payable. The assessee cannot profit or take advantage from that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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