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2012 (9) TMI 265 - SC - Income TaxUndervaluation of closing stock - non inclusion of excise duty into computation - Held that:- As per Section 3 of the Central Excise Act, 1944 the levy of excise duty is on the manufacture of the finished product the same is quantified and collected on the value (i.e. selling price) and that the valuation of unsold stock at the close of the accounting period determines the trading results of that period and cannot be regarded as source of profits. The entry for stock which appears in the trading account is intended to cancel the charge for the goods bought which have remained unsold which should represent the cost of the goods - addition to the income on the ground of undervaluation of the closing stock was wrong - in favour of assessee.
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