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TMI Blog2015 (2) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax-II, Ludhiana Vs. M/s Avery Cycles Inds. Ltd., ITA Nos. 297 of 2009, 298 of 2009 and 286 of 2009, Commissioner of Income Tax-II, Ludhiana Vs. M/s Avon Cycles Ltd. and ITA No. 593 of 2009, Commissioner of Income Tax-II, Ludhiana Vs. M/s Hero Cycles Ltd. 2. The revenue is before us challenging orders passed by the Income Tax Appellate Tribunal (here-in-after referred to as 'the Tribunal') in these appeals by raising four substantial questions of law, which are common to all appeals:- 1. Deletion of disallowance made on account of interest on money borrowed for purchase and installation of plant and machinery. 2. Deletion of addition on account of excise duty on closing stock as a result of application of section 145 A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon CBDT circular No. 772 dated 23.12.1998 and guidelines issued by the Institute of Chartered Accountants to delete the addition of Rs. 32,31,521/- made by the Assessing Officer. The revenue preferred an appeal before the Tribunal, which was dismissed by order dated 07.10.2005 by relying upon a judgment of the Hon'ble Supreme Court in CIT Vs. M/s Indo Nippon Chemical Industries Limited, 261 ITR 275. 6. Counsel for the revenue submits that the judgment in M/s Indo Nippon Chemical Industries Limited (supra), relates to inclusion of modvat credit and, therefore, does not apply to the present case, which pertains to inclusion of excise duty while calculating opening and closing stock. 7. Counsel for the assessee submits that it makes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as inserted in order to ensure that the value of opening and closing stock reflect the correct value. (iii) The Learned Counsel has also alluded to the guidelines issued by the Instituted of Chartered Accountants, which is the CA's Apex Body. After having considered the rival submissions, I find force in the contentions of the Learned Counsels that this new section mentions the word inventory; the CBDT circular also speaks of the correct value of the opening and closing stock, and in matters of accountancy, the guidelines of the Institute of the Chartered Accountants Apex Body, have to be taken as the correct method. In view of the above, I am inclined to agree with averments of the Learned Counsel. Accordingly, I allow this ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal is in any manner perverse or arbitrary. The fact that the judgment in M/s Indo Nippon Chemical Industries Limited's case (Supra) relates to modvat credit would make no difference as it is the method of accountancy and the principle affirmed in M/s Indo Nippon Chemical Industries Limited's case (Supra) that is relevant. Consequently, the second question is answered against the revenue. 11. The third question, relates to interest on interest free advances to directors and other parties. Counsel for the revenue submits that similar matters have been remitted to the Tribunal in view of a judgment of the Hon'ble Supreme Court in S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals) and another, (2007) 288 ITR 1. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows:- 234D. (i) Subject to the other provisions of this Act, where any refund is granted to the assessee under sub-section (1) of section 143, and - (a) no refund is due on regular assessment; or (b) the amount refunded under sub-section(1) of section 143exceeds the amount refundable on regular assessment, the assessee shall be liable to pay simple interest at the rate of (one-half) per cent on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment.(2) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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