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TMI Blog2014 (7) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of assessment. As per provisions of sec.145A adjustment is to be done in the opening and closing stock of the year under consideration so as to ascertain the true profits – thus, the AO is directed not to disturb the closing stock of past years and to make adjustment in the opening and closing stock of the year under consideration by the amount of value of Cenvat credit available to the assessee as at the beginning and at the end of the year – thus, the order of the CIT(A) is modified – Decided partly in favour of assessee. - ITA No. 5508/Mum/2010, ITA No. 5960/Mum/2010 - - - Dated:- 13-6-2014 - Shri R. C. Sharma, AM And Sanjay Garg, JM,JJ. For the Petitioner : Mr. Y. P. Trivedi Ms. Usha Dalal For the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, the AO concluded that assessee has understated its income to the extent of ₹ 4,11,37,363/- in violation of provisions u/s.145A of the Act, which was added by him in assessee s income. 4. By the impugned order the CIT(A) followed the decision of Hon ble Bombay High Court in the case of Mahalaxmi Glass Works (P) Ltd., 318 ITR 116 and directed the AO as under :- a) Change the opening stock by the value of Cenvat Credit as on 01.04.2006. b) Change the closing stock of past years and set the chain reaction in motion as held by Bombay High Court over ignoring the ratio its earlier decision in case of Melmould Corporation Vs. CIT, 202 ITR 789. Against the above direction of the CIT(A), both assessee and Revenue are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Mahavir Aluminium Ltd., 297 ITR 77 (Del) and Ahmedabad New Cotton Mills Co. Ltd., AIR 1930 PC 56. This question has been dealt with and answered by the Delhi High Court in the case of Commissioner of Income Tax Vs. Mahavir Alluminium Ltd. reported in (2008) 297 ITR 77 (Delhi). This question concerns the method of valuation of inventory as contemplated by Section 145A of the Income Tax Act. In the case before the Delhi High Court, the Assessing Officer contended that Section 145A did not permit the assessee to make a change in the valuation of the opening stock as on 1.4.1998 though it permitted a change in the closing stock as on 31.3.1999. The question before the Delhi High Court was that the adjustment of excise duty could be made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances to contend that there should be under valuation at one end and not at the other is to raise an argument which their Lordships cannot accept . 6. In view of the above decision of Hon ble jurisdictional High Court, it is clear that as per provisions of sec.145A adjustment is to be done in the opening and closing stock of the year under consideration so as to ascertain the true profits. Accordingly, we direct the AO not to disturb the closing stock of past years and to make adjustment in the opening and closing stock of the year under consideration by the amount of value of Cenvat credit available to the assessee as at the beginning and at the end of the year. Accordingly, the order of the CIT(A) is modified to this extent. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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