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2016 (12) TMI 1666 - AT - Income TaxExcise duty on closing stock of Alcohol - Held that:- It can be seen that the assessee neither excise duty was paid by the assessee nor the duty was incurred. Therefore, Section 145A will not be applicable, but as regards the basis of accounting concept the assessee has not followed proper procedure as excise duty was not mentioned in closing stock of alcohol. While excise duty payable should be compared of production cost, closing stock should include element of such duties. This matter needs to be taken into consideration and is remanded back to the Assessing Officer. Proper opportunity and hearing may be given to the assessee. Valuation of closing stock - Held that:- In any case no adjustment can be made the only closing stock without any adjustment in opening stock cost of the earlier season was ₹ 1,122 per quintal against current seasons ₹ 1,127/- is duly accepted by the lower authorities. Besides the said closing stock to current year is opening stock of subsequent year and hence the same was verified properly by the CIT(A). There is no need to interfere with the same. This ground of the Revenue is dismissed. Disallowance of depreciation - Held that:- Assessing Officer has not disputed the purchase of machinery and also verified the purchase with reference to purchase bills issued by Seller Company. Mere presumption by the Assessing Officer that since the machinery was old it could not be put to use without major repairs does not sustain. Thus the contention of the assessee that the machinery installed was open to verification and that if the AO had any doubt spot enquires could have been made. Thus, the CIT(A) rightly deleted this addition. Treating the incentive on sale of levy sugar as revenue receipts as against capital receipts claimed by the assessee is not correct. It is capital receipt. Penalty u/s 271(1)(c) - inaccurate particulars of income on account of interest to Financial Institutions - Held that:- Assessee has not concealed any particulars of income or furnished any inaccurate particulars of income. The Assessing Officer was incorrect in holding that the assessee furnished inaccurate particulars of income on account of interest to Financial Institutions by conversion of same into Term Loan and by issue of Zero Coupon Bonds. The assessee has furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept is claim in the Return or not. Merely because the Assessing Officer made addition on account of unpaid interest in respect of term loan amounting to ₹ 7,95,42,474/- as interest paid to financial institution was converted into term loan but was claimed as actual payment within the ambit of Section 43B by the assessee. This cannot be termed as concealment of income or furnishing of inaccurate particulars of income and will not attract the provisions of Section 271(1)(c) of the Act. The Explanation 1 of Section 271(1)(c) of the Act will not be applicable in the present case.
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