Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 1381 - ITAT MUMBAIAddition to value of closing stock on account of CENVAT credit u/s 145A - assessee has been consistently following exclusive method of accounting for valuation of closing stock of excluding the CENVAT - AO revalued the closing stock by including CENVAT/MODVAT credit in closing stocks on the ground that non inclusion of CENVAT credit is not only improper but also cannot depict the true and fair picture of taxable profit of the business - HELD THAT:- Jurisdictional High Court in the case of Mahalaxmi Glass Works P. Ltd [2009 (4) TMI 182 - BOMBAY HIGH COURT] wherein it has been held that to give effect u/s 145A, if there is any change in closing stock at the end of the year there must be necessarily of corresponding adjustment in the opening stock of that year and accordingly directed the AO to calculate disallowance/addition after verification. Tribunal in the case of Jindal Iron & Steel Company Ltd. [2013 (1) TMI 182 - ITAT MUMBAI] has held that if unutilized MODVAT credit is added to closing stock, then similar adjustment should be made even in opening stock and purchases. The Tribunal further held that from the plain reading of provisions of section 145A, it is evident that for the purpose of valuation of purchase and sale of goods and inventories on account of tax, duty, cess or fee actually paid are incurred by the assessee has to be made. Excise duty component in the form of MODVAT in the raw materials has to be included while valuing the purchases and sales of goods and inventories as it has direct bearing on valuation of stock. The Tribunal in the said decision has considered the decision of the Hon’ble Bombay High Court in the case of Mahalaxmi Glass Works P. Ltd (supra) which has been relied by the Ld.CIT(A). Therefore, following the aforementioned decision of the Tribunal, we modify the direction of the Ld.CIT(A) in such a manner that the issue is remitted back to the file of the AO with the direction to make the adjustments as per section 145A on account of CENVAT credit to the value of purchases/sales of opening and closing stock and accordingly re-compute the addition if any to be made on this issue. Appeal filed by the assessee is allowed for statistical purpose.
|