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TMI Blog2016 (6) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Indo Nippon Chemicals Co. Ltd. reported at (2003 (1) TMI 8 - SUPREME Court) observed that unavailed MODVAT credit cannot be construed as income and there is no liability to pay tax on such unavailed MODVAT credit. Further, before us, Revenue has not brought any contrary binding decision in its support. In view of the aforesaid facts, we do not see any reason to interfere with the order of the ld.CIT(A). Thus, the ground of Revenue is dismissed. - I.T.A. No. 1443/Ahd/2012 - - - Dated:- 10-6-2016 - R. P. Tolani (Judicial Member) And Anil Chaturvedi (Accountant Member) For the Appellant : Praveen Kumar, Sr. DR For the Respondent : A. L. Thakkar, AR ORDER Anil Chaturvedi (Accountant Member) This appeal by the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am inclined to agree with the submissions of the Id. A.R. for the following reasons:- (A) The appellant is following exclusive method of accounting. According to this method of accounting payment and receipt of CENVAT is a balance sheet item and it is not debited or credited in the P L A/c. In this regard I am inclined to agree with the contention of the Id. A.R. that an amount of ₹ 1,65,71,959/- being CENVAT balance in the balance sheet ,is revenue neutral. The appellant has also placed reliance on Indo Nippon Chemical Co. Ltd. (2003) 261 ITR 275 (SC). I have also perused the other case laws relied upon by the appellant and ratios of these case laws also support the case of the appellant. Some of these case laws are mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h cases, the real profits of a particular year cannot be ascertained by merely raising value of closing stock, not taking into consideration the similar valuation of opening stock. As per the ratio of this case, enhancing the value of closing stock without giving corresponding effect to the valuation of opening stock is not proper. Further reliance is placed on DCIT vs Beck India Ltd. (2010) 127 TTJ 410 (Mum.) and CIT vs Mahavir Alluminium Ltd. (2008) 297 ITR 77 (Del.). Perusal of record further reveals that during the assessment proceedings the appellant had given a working of profits, wherein the effect of CENVAT was taken both in the opening stock and closing stock. This exercise had not resulted in change of profits by a sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record and gone through the orders of the authorities below. The issue in the present case is with respect to inclusion of unutilized CENVAT credit to the closing stock. We find that ld.CIT(A) while deleting the addition has given a finding that the assessee was following exclusive method of accounting and the CENVAT was not debited or credited to the Profit Loss account and the aforesaid method has been consistently followed by the assessee in earlier and succeeding years. We further find that the Hon ble Apex Court in the case of CIT vs. Indo Nippon Chemicals Co. Ltd. reported at (2003) 261 ITR 275 (SC) observed that unavailed MODVAT credit cannot be construed as income and there is no liability to pay tax on such unavailed MODVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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