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TMI Blog2016 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,81,926/- and 82,80,116/- to be purchase values of chemicals and Hydrogen gas respectively totaling to 3,32,75,131/- and regarding MODVAT, which can be availed towards payment of excise duty on finished goods and it is pertinent to state that the balance will be entered directly to the balance sheet as per the procedure prescribed by the Institute of Chartered Accountants of India. - I.T.A No. 1911/Kol/2013 - - - Dated:- 17-6-2016 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Sallong Yaden, Addl. CIT, ld. Sr.DR For The Respondent : Shri Manish Tiwari, FCA, ld.AR ORDER SHRI S.S VISWANETHRA RAVI, JM This appeal of the revenue arises out of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Led AR contended, that the addition made by the AO was arbitrary and without any basis. There is no material on record to support the action of the AO The AO has arbitrarily picked up figures from the tax audit report and the notes on accounts; and then, computed the imaginary difference of ₹ 5,1l,14,650/- which actually does not exist. The AO has found no defect or discrepancy in the audited books of account. The Ld AR filed copy of the tax audit report in course of the appellate proceedings. It was explained that total expenditure of ₹ 1,94,03,13,928/- on account of raw material consumed was debited to the profit loss account. But then, the raw material consumed not only included crude oil but also chemicals and hydrog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit Reversal on Input 14,290 0 Less : Discount on Purchase on Chemicals 44,994 0 Less : Discount on Purchase on Raw Material 15,84,936 15,84,936 TOTAL (b) 1,90,21,43,175 1,87,05,31,418 Less : Closing Stock Raw Materials 1,23,53,579 1,23,53,579 Raw Materials-Goods in Transit 3,62,71,868 3,62,71,868 Chemicals 15,71,411 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Ld AR further explained that the appellant follows the 'Exclusive Method prescribed by the Institute of Chartered Accountants of India in Respect of MODVAT. Accordingly, duty paid on inputs is debited to a separate account MODVAT Credit Receivable Account which is utilized against, payment of excise duty on finished goods; and, the balance is taken directly to the balance sheet. The treatment of MODVAT is revenue neutral which is also evident from Annexure 1 to the tax audit report wherein the deviation from section 145A is certified as nil. 5. The Ld. CIT-A after considering the submissions of the assessee and CITA gave finding as under: 8. I have perused the assessment order and the material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an on factual ground. An assessment has to be made on the basis of the material available on record. But, in the present case, presumptions have led the AO to a state of affairs where salient evidences were overlooked and the material on record was ignored. On the other hand, the AO has brought no positive material on record to substantiate or support his conclusion that there was excess expenditure of ₹ 5,11,14,650/- towards consumption of raw material which is not reflected in the profit and loss account. The treatment given by the AO in respect of availing of MODVAT credit is also not in order. The addition made by the AO is neither substantiate in law nor on facts. The addition of ₹ 3,32,75,131/- is directed to be deleted. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated items such as chemicals and hydrogen gas and found the same in schedule P which was annexed to the profit and loss account. In this regard we may refer to chart of particulars as reflecting in the page no-4 of CIT-A where it shows the raw material as per Schedule-P and raw material as per notes on accounts wherein we found that an amounts ₹ 2,17,81,926/- and 82,80,116/- to be purchase values of chemicals and Hydrogen gas respectively totaling to 3,32,75,131/- and regarding MODVAT, which can be availed towards payment of excise duty on finished goods and it is pertinent to state that the balance will be entered directly to the balance sheet as per the procedure prescribed by the Institute of Chartered Accountants of India. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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