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TMI Blog2017 (12) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Tribunal ('ITAT') dismissing the Assessee's appeal being ITA No.1240/Del/2003 for the Assessment Year (AY) 1999-00. 2. The Revenue is aggrieved by the said order only in respect of some of issues which have been held in favour of the Assessee and against the Revenue. 3. By the order dated 24th April 2006, the following questions of law were been framed by this Court: i. Whether the ITAT is right in law in holding that unutilized MODVAT credit of earlier years amounting to Rs. 77,55,78,738/- adjusted in the assessment year in question should be treated as actual payment of excise duty under Section 43B of the Income Tax Act, 1961 ('Act')? ii. Whether the ITAT is right in law in holding that Rs. 3,84,55,412/- representing sales t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the value of the closing stock in view of Sections 43B and 145A of the Act? 4. As far as Question (i) is concerned, in view of the order passed by this Court in ITA No. 31 of 2005 upholding the impugned order of the ITAT on this issue, the question is answered in the negative, i.e. in favour of the Revenue and against the Assessee. 5. As far as Question (ii) is concerned, sales tax paid on raw material in the preceding AY was rightly allowed as a deduction in the current assessment year under Section 43B of the Act. This question is, therefore, answered in the affirmative, i.e. in favour of the Assessee and against the Revenue. 6. Question (iii) concerns the disallowance of an addition of Rs. 20,60,14,392 representing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and made available for clearance. The benefits represent, at best, a hypothetical income which may or may not materialise and its money value is therefore not the income of the Assessee." 8. Consequently, question (iv) is answered in the affirmative i.e. in favour of the Assessee and against the Revenue. 9. Question (v) is whether customs duty paid on 28th April 1999 can be capitalised with retrospective effect and depreciation calculated by including the said amount in the AY 1999-2000? The ITAT has answered the question in favour of the Assessee. In view of the decisions in Sharanpur Electric Supply Ltd. (1992) 194 ITR 294 (SC); CIT v. Woodward Governor India (P) Ltd. [2009] 312 ITR 254 (SC); CIT v. Funskool (India) Ltd. (2007) 294 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is clarified by the Assessee that the amount of Rs. 69,12,41,610/- represents customs duty included in closing stock and Rs. 50,28,051/- represents customs duty on tools imported by the Assessee which were made available by it to its contract manufacturers, also described as vendors in the question of law framed on the same issue in subsequent AY 2001-02. 13. In view of the decision in Berger Paints Limited v. CIT [2004] 266 ITR 99 (SC), question (ix) is answered in the affirmative i.e. in favour of the Assessee and against the Revenue. In this regard, the observations of the ITAT in para 41 of the impugned are reiterated, viz. that the AO should, while giving effect to the ITAT's order, ensure that no double deduction is allowed. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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