9911796707
TMI Blog2015 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of closing stock, the same is also required to be included in the value of purchases and it will have no impacts on the profits of the assessee. Therefore, we do not find any reason to interfere in the order of Ld. CIT(A). Thus no addition on account of MODVAT and VAT as made by the A.O needs to be made in the present case. See Snehal Pharma Chem [2015 (2) TMI 151 - ITAT AHMEDABAD] and The DCIT, Circle 1, Versus M/s Bloom Dekor Ltd. [2013 (8) TMI 180 - ITAT AHMEDABAD] - Decided in favour of assessee. - I.T. A. No. 753 /AHD/2011 - - - Dated:- 7-8-2014 - Shri Mukul Kr. Shrawat, J. M. And Shri Anil Chaturvedi, A.M.,JJ. For the Appellant : Shri Tushar P. Hemani, A.R. For the Respondent : Shri Dinesh Singh, Sr. D.R. ORDER Per Shri Anil Chaturvedi,A.M. 1. This appeal is filed by the Assessee against the order of CIT(A)-XVI, Ahmedabad dated 13.01.2011 for A.Y. 2007-08. 2. The facts as culled out from the material on record are as under. 3. Assessee is partnership firm stated to be engaged in the business of Trading and Manufacturing of Dyes. Assessee electronically filed its return of income for A.Y. 07-08 on 31.10.2007 declaring total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with the purchases and not the Excise duty or VAT which was take to Balance sheet directly. It was further submitted that out of the total Excise Duty of ₹ 124.37 lacs debited, it had utilized the Excise Duty of ₹ 140.53 lacs which means that it has already utilized the payment of Excise Duty during the year and had also paid ₹ 16.16. lacs. The submissions of the Assessee were not found acceptable to the A..O as was of the view that by adopting exclusion method of closing stock valuation, the correct profit of the business was not reflected by the Assessee as there was under valuation of closing stock. A.O was of the view that in view of the provisions of Section 145A of the Act, unutilized CENVAT MODVAT credit receivable needs to be included in the value of closing stock. He therefore included the Excise Duty of ₹ 8,24,118/- and Vat credit of ₹ 3,44,699/- aggregating to ₹ 11,68,817/- in the value of closing stock and accordingly added the amount to the total income. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) after relying on the various decisions cited in his order upheld the addition made by the A.O by ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on record, the copy of the aforesaid orders. The ld. D.R. on the other hand relied on the order of A.O. and CIT(A). 8. We have heard the rival submission and perused the material on record. We find that the issue in the present appeal is with respect to inclusion of Excise duty and VAT to the value of closing stock, in a case where the Assessee is following exclusion method of accounting of Excise and VAT for valuation of stock. We find similar issue were before the coordinate Bench of Tribunal. We further find that in the case of Snehal Pharma Chem (supra) the issue was decided in the favour of Assessee by the co-ordinate Bench of Tribunal by holding as under:- 3. We have considered the submissions of the Ld. D.R. and have gone through the material on record and the orders passed by authorities below. We find that there is submission of the assessee before the authorities below that while the entire amount of excise duty realized on sales was included in the sale amount but out of entire amount of excise duty paid on purchases, only that portion of such excise duty paid which was utilized by way of MOD VAT, had been included in the value of purchases and the balance amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduced herein as under: At the time of hearing, both the parties agreed that the issue is now squarely covered by the decision of Hon'ble Jurisdictional High Court in the case of ACIT Vs. Narmada Chematur Petrochemicals Ltd. 327 ITR 369 (Guj.), wherein following was held: Held, dismissing the appeal, that Tribunal was justified in excluding the excise duty at the time of valuation of the closing stock of finished goods at the end of the accounting period because: (a) No deduct ion for the liability had been claimed by the assessee.The excise duty payable on the finished goods lying in the closing stock at the end of the relevant accounting period had been paid in the subsequent year before_the due date of filing of the return of income and that was how the amount was available considering the fact that the assessment had been framed and the show-cause notice was issued much after the close of the accounting year; (b) The Assessing Office had not had recourse to sub-section (3) of section 145 of the Act. The assessee was following the mercantile system of accounting but it was not the case of the assessing Officer that the Assessing Officer was not in a position ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
