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2012 (11) TMI 284 - AT - Income TaxRevisionary powers used by CIT(A) - order of the A.O. was erroneous - non inclusion of unutilized MODVAT and VAT credit in valuing closing stock of Raw material and work in progress - Held that:- Assessee had made written submissions and submitted the details before A.O. whereby it was contended that the assessee has been consistently following exclusive method of accounting for sales, purchase and closing stock. It also demonstrated through the annexure of tax audit report certified by Chartered Accountant that whichever method of accounting is adopted (inclusive or exclusive method) by the assessee, there is no impact on the profit of the year. Similarly assessee also submitted before A.O. & CIT the method of accounting employed consistently followed by it for accounting of Excise duty and CENVAT and by following either of the method there is no impact on profit and loss account. The A.O. in the instant case had examined the issue of stock. The observation of the CIT that the A.O. overlooked the provisions of 145A also does not appear to be justified for the reason that the A.O. had examined the same. The order of assessment dated 4-12-2009, no doubt does not contain a detailed discussion on this aspect, but that however would not render the order as erroneous as decided in Commissioner Of Income-Tax Versus Gabriel India Limited [1993 (4) TMI 55 - BOMBAY HIGH COURT]. Thus as the A.O. had made necessary inquiries and the assessee had provided an explanation in that regard.Thus, it can be said the A.O. on being satisfied did not make any addition and disallowance relying on CIT vs. Indo Nippon Chemicals Co.[2003 (1) TMI 8 - SUPREME COURT] wherein held that hat no addition on account of modvat credit can be made - Therefore the order of the A.O. cannot be considered either to be erroneous or prejudicial to the interest of the Revenue - in favour of assessee.
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