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2013 (3) TMI 49 - HC - Income TaxNon-inclusion of excise duty element in closing stock - ITAT deleted the addition - Tribunal held that if the Department wants to add the excise duty in the closing stock for valuation purposes, the department should also add the excise duty paid on the raw material as the assessee was claiming MODVAT - Held that:- As decided in Commissioner of Income-Tax Versus Indo Nippon Chemicals Co. Ltd. [2003 (1) TMI 8 - SUPREME COURT] unable to accept the view of the AO that merely because Modvat credit is an irreversible credit available to the manufacturers upon purchase of duty paid raw material, it would amount to income which is liable to be taxed under the Act. AO adopted the gross method at the time of purchase, and the net method of valuation at the time of valuation of the stock on hand. By this method, which is wholly erroneous he assumed that the income, to the extent of the Modvat credit on the unconsumed raw material, was generated, which was not reflected in the accounts and attempted to bring it to charge under the Act - no substantial question of law is involved in the appeal.
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