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2014 (7) TMI 245 - AT - Income TaxProceedings u/s 263 of the Act - Condonation of delay for appeal before CIT(A) – Delay of 771 days – Assessee contended that the appeal could not be filed in time as the papers had been misplaced by one of the office staff and the same could be traced out with a delay of 771 days - Held that:- The order u/s 263 was passed on 19.04.2011 and subsequently, assessee also appeared before the AO who has passed assessment order on 26.12.2011 - it cannot be stated that assessee is not aware about the 263 proceedings and misplacement of papers by one of the office staff cannot be accepted as a genuine explanation and it could be one of the reason given seeking condonation of delay even though the actual reason may be that assessee did not want to challenge the order when it was passed, therefore, the condonation of delay cannot be granted – Decided against Assessee. Reassessment proceedings - reopening after 4 years - Held that:- there is no evidence on record that assessee has furnished the necessary information. In fact, change of accounting policy in A.Y. 2005-06 itself not on record. - even though assessment was reopened after 4 years, on the facts of the case, A.O. is well within the jurisdiction to reopen the assessment - Decided against the assessee. Double deduction of expenses towards excise duty – the amount added to the closing stock by the assessee as well as debited to profit & loss account as expense – Held that:- Under the provisions of section 43B, excise duty paid is allowable as deduction if it is paid on or before the relevant due dates out of the outstanding amounts at the end year - in the computation of income the assessee has to add the amount outstanding at the end of the year and then should claim the amount as deduction - As explained in A.Y. 2005-06, assessee has added amount of ₹ 1,43,47,164/- as amount of addition to the closing stock as the assessee was following the exclusive method earlier - Because of change in method of accounting, the closing stock value has gone up by that amount. In order to neutralise the same, the same amount was also claimed in P & L account as debit to the P & L account under the Head “Manufacturing & Direct Expenses” - the effect of increase of closing stock was neutralised by debiting to the P & L account - the problem came only in the computation of income. The amount of ₹ 1,43,47,164/- was not paid at the end of 31.03.2005, the amount should be added back in the computation and out of this amount, any amount actually paid should be claimed as deduction - whether the amount of ₹ 1,38,77,013/- was out of the amount of ₹ 1,43,47,164/- added in the P & L account to the closing stock or a further amount of which was not part of the above amount - The explanation was that the amount added to the closing stock is not the amount claimed in the computation of income - This aspect requires examination by the AO by verifying the relevant Registers and payment of excise duty by obtaining the necessary details from the assessee company in all the years under consideration from A.Y. 2005-06 to 2007- 08 - the amounts furnished in the tables and the amounts claimed as deduction u/s 43B require verification – thus, the matter is remitted back to the AO for fresh adjudication. Tax Effect - Relying upon CIT vs. Nagri Mills Co. Ltd. [1957 (9) TMI 30 - Bombay High Court] – assessee argued that it does not have any tax effect cannot be accepted as each year being a self-contained unit tax of the particular year is payable with reference to income of that year, as computed in terms of the Act - AO is directed to determine the income as per the provisions of the Act by examining the issue – Decided in favour of Assessee.
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