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TMI Blog2014 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... : "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law approving exclusion of excise duty from valuation of closing stock of finished goods? (2) Whether the Appellate Tribunal was right in holding that interest of Rs.2,19,216/- derived from Bank Guarantee Deposits, Letter of Credit and on delayed payments, is eligible for deduction u/s.80IA? 2.00. That the assessee filed return of income for the AY 1997-98 declaring total income at Rs.25,40,810/-. That while passing the assessment order, the AO disallowed and consequently directed to make addition of Rs.11,09,733/- on the ground of undervaluation of closing stock due to noninclusion of excise duty and also disallowed deduction under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case, the Appellate Tribunal was right in law approving exclusion of excise duty from valuation of closing stock of finished goods? (2) Whether the Appellate Tribunal was right in holding that interest of Rs.2,19,216/- derived from Bank Guarantee Deposits, Letter of Credit and on delayed payments, is eligible for deduction u/s.80IA? 3.00. Heard Mr.Manish Bhatt, learned counsel appearing on behalf of the revenue and Mr.Agarwala, learned advocate appearing on behalf of the respondent. 3.01. Now, so far as question No.(1), Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law approving exclusion of excise duty from valuation of closing stock of finish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the mercantile system of accounting but it was not the case of the Assessing Officer that the Assessing Officer was not in a position to deduce true profits of the year under consideration. Such duty of Central excise if added to enhance the value of closing stock would result in enhanced opening stock on the first day of the next accounting period, namely, April 1, 1997. So the next year's profits would get depressed accordingly. Over a period of time the whole excise would even out, in other words, be revenue neutral. At the same time while disturbing the value of the closing stock the assessing authority could not change the method of accounting regularly employed. (c) the assessment year being 1997-98 the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80I, interest received from trade debtor towards late payment of sale consideration is to be included in the profits of the industrial undertaking. Applying the ratio laid down by this Court in the case of Nirma Industries Ltd. (supra), the said issue is to be held in favour of the revenue. 4.00. In view of the above and for the reasons stated above, Question No.(1) is answered against the revenue and so far as the question with respect to interest derived from Bank Guarantee Deposits and Letter of Credit is concerned, the same is held against the revenue, however, so far as the Question No.(2) with respect to interest received towards delayed payment is concerned, the same is held in favour of the revenue. Present appeal is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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