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TMI Blog2009 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... of closing stock. The Assessing Officer of the opinion that the excise duty payable on finished goods is not taken into account for the purpose of valuation of stock of finished goods. The Income tax Officer added back the excise duty payable on finished goods. The first appellate authority deleted the addition so made. The department preferred an appeal before the Income Tax Appellate Tribunal and the Income Tax Appellate Tribunal following the decision in the case of Commissioner of Income Tax vs. English Electric Co. Of India Limited reported in 243 ITR 512 held that excise liability not to be included in valuation of closing stock. The Assessing Officer disallowed the investment allowance claim on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. 5. Upon hearing the counsel and on perusing the materials available on record, we are of the view that both the issue is covered by the decision of this Court. The facts are not disputed that the imported materials are not cleared by the assessee and are kept in the bonded warehouse. Likewise, the manufactured goods are also not cleared from the factory of the assessee and it is still available in the factory. 6. In the above said circumstances of the case, in order to value the closing stock, whether the customs duty payable on the raw materials imported, which is still not cleared from the customs frontier and the excise duty payable on the goods not cleared from the factory and when the taxable event is yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts held by the assessee in the form of the higher value assigned to the closing stock; that the liability cannot be converted into an asset in that manner. The same analogy would equally applicable to the customs duty payable in respect of the goods which are under bond. 8. The learned counsel appearing for the revenue sought to distinguish the Judgment by placing reliance on the Judgment of this Court in the case of Southern Asbestos Cement Limited vs. Commissioner of Income Tax reported in 259 ITR 631 to contend that the cost of imported raw material of the assessee would necessarily include the customs duty paid thereon, as without the payment of such duty, the assessee would not be entitled to remove the imported raw material fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty paid thereon is to be deducted from the value of the closing stock of those finished products. Hence, reliance placed on the decision reported in 259 ITR 631, in our view is misplaced reliance as the facts are different, in the sense in the Southern Asbestos's case the goods are imported, customs duty paid and goods are available with the assessee. In respect of manufactured goods, the goods are manufactured and cleared from the factory by paying the excise duty. But, here in the case on hand, the imported goods are yet to be cleared from the customs and they still remain in the bonded warehouse and the manufactured goods are also very much available within the assessee's factory and it is not cleared by pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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