9911796707
TMI Blog2015 (5) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of excise duty on cloth manufactured by it, rate of excise duty on cloth manufactured was only 4%. - CIT(A) was justified in holding that debit balance appearing in MODVAT receivable account is amount which the assessee has already debited in books of account alongwith purchases and since it has opted out of scheme of excise duty payment on manufactured cloth from the MODVAT account, assessee has not been able to set off the above receivable account against any payment of excise duty under the MODVAT scheme. The purchases which have been debited in the P & L account alongwith MODVAT account and appearing in the closing stock are also with MODVAT account. Thus, no adjustment u/s. 145 was required to be made. Accordingly, CIT(A) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed MODVAT/CENVAT credit of ₹ 14,32,533/- has been shown, and same was required to be added u/s.154 of the Act and therefore, added the same after rejecting the objection on behalf of assessee. 2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same CIT(A) has deleted the addition. 2.2 Same has been opposed before us on behalf of Revenue inter alia submitted that CIT(A) erred in deleting addition of ₹ 14,32,533/- towards unutilized MODVAT/CENVAT credit without noting the facts that unutilized MODVAT/CENVAT credit was required to be included in total income of assessee and assessee failed to substantiate the reason for not doin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee stated that debit balance is appearing because provisions of MODVAT on manufacturing of cloth were made voluntary from 01.8.2004 and it had opted not to claim MODVAT on yarn and paid the same on cloth. The stand of assessee has also been that u/s 145 A of the Act, the closing stock is to be assessed with any tax, duty, cess or fee, and since the closing stock has already been valued at cost inclusive of excise duty. There was no justification for adding debit balance in MODVAT receivable account to the income of the assessee. In this background, CIT(A) was justified in holding that debit balance appearing in MODVAT receivable account is amount which the assessee has already debited in books of account alongwith purchases and since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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