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2006 (5) TMI 417 - AT - Income TaxMODVAT credit - Method of accounting in certain cases - HELD THAT:- We are of the view that as per the provisions of newly introduced section 145A, inventory has to be valued by including the element of tax, duty, cess or fee etc. There were two alternative methods that were prevalent up to 31-3-1999 being, one inclusive and the other is exclusive. In the inclusive method, the element of tax, duty, cess or fee was always included as an element of cost. In the exclusive method which was in force up to 31-3-1999 the element of tax, duty, cess or fees etc., were excluded. With effect from 1-4-1999, the element of tax, duty, cess or fee should always be treated as a part of the cost and the inclusive method has to be only adopted. It is in this direction that the aforesaid amendment had been made by the Finance (No. 2) Act, 1998 by introducing section 145A. The closing stock of the earlier year which is accepted by the department should be taken as the opening stock of the year under consideration and any change as a result of the provisions of section 145A is only upon the closing stock. There is no ambiguity in the provisions of section 145A of the Act. In the result, appeal of the assessee is treated as partly allowed only for statistical purposes.
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