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TMI Blog2013 (5) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... payable on closing of finished goods should not be included in the inventory valuation and brought to tax, the assessee, in reply, has contended that the closing stock is valued at cost or market value whichever is lower. The assessee submitted that the finished goods which were referred to in the notes on accounts were the goods which were not cleared from the factory and, hence, the same were valued at cost without taking into account the element of excise duty. It was explained that the excise duty payable was not debited to P L A/c, and the same was not added to the value of finished goods. Alternatively, the assessee contended that in case excise duty payable on finished goods is to be included in the valuation, the same has to be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of finished goods. Assessee in this regard relied on the decision of Hon ble Gujarat High Court in the case of Narmada Chematur Petro Chemical Ltd., 233 CTR 265 which decided the issue after considering various decisions and also the provisions of section 145A. 4. After considering the submissions of the assessee, the CIT(A) observed that the undisputed fact in this regard is that the finished goods have not been moved out of factory premises and hence the liability of payment of excise duty did not arise and, therefore, as rightly observed by the AO, there is no liability as far as excise duty component is concerned. He further observed that however, the AO invoking provisions of section 145A added excise duty component to the finish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the merit of the order of the AO. 2. The CIT(A) erred in granting relief to the assessee in respect of addition made towards variation in the valuation of closing stock despite the fact that the provisions of sec. 145A of the IT Act, 1961 is clear in its terms that the value of the liability towards taxes, cess/duty whatsoever name called are to be added to the value of the closing stock for the purpose of determination of the closing stock valuation as at the end of the previous year . 6. We have heard both the parties and perused the record as well as gone through the orders of the authorities below. The CIT(A) gave a categorical finding that the undisputed fact in this regard is that the finished goods have not been moved out o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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