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2017 (2) TMI 730 - AT - Income TaxAddition u/s 145A - Assessee is valuing closing stock after excluding the tax, duty and cess etc. and thus violating the provisions of section 145A - Held that:- In the process of manufacturing assessee purchases goods from within the State and outside the State due to which VAT credit is available for VAT paid goods purchased from within the State and Central Sales Tax is paid from outside State goods which are included in the purchases itself. Assessee is also covered under the Excise Act and was enjoying concessional rate of excise duty to be leviable on the goods manufactured. Closing stocks of the assessee constitutes raw material, packing material, consumable stores purchased from within and outside the State, semi finished and finished goods. All these categories of closing stock out of which some are inclusive of taxes and some are exclusive of taxes and, therefore, assessee is consistently following the system of valuing the opening and closing stocks exclusive of taxes. Further assessee is applying the Accounting Standards framed by the Institute of Chartered Accountants of India which are required to be followed for preparing financial statements as per the Companies Act. It is not disputed that as per the provisions of section 145A of the Act opening and closing stocks should be inclusive of taxes but due to the type of business and variety of stocks, assessee is unable to do so. However, it is a fact that there is no negative impact on the revenue as both the opening and closing stocks are valued exclusive of taxes and, therefore, closing stock for the year under appeal which is excluding of taxes will become opening stock for next year. In the case of Voltamp Transformers Ltd. vs. CIT (2008 (4) TMI 518 - Gujarat High Court ) has held that Assessing Officer has got very limited powers to change valuation of closing stock which is part of accounting policy. He cannot change method of accounting regularly followed by the assessee without valid reasons. We also observe that during the course of assessment proceedings as well as appellate proceedings it was submitted by assessee that it was paying excise duty on concessional rate and was not taking any benefit of CENVAT which itself is a plausible explanation which remains uncontroverted. Since CENVAT is not available to the assessee then the enhancing the value of semi finished and finished goods in the closing are not warranted. - Decided in favour of assessee. Addition on account of late payment of employees contribution to the Provident Fund - Held that:- The issue raised in this ground by Revenue against ld. CIT(A)’s order deleting the addition of ₹ 9,728/- on account of late payment of employees contribution to the PF is now well settled in favour of Revenue by the judgment of Hon. Gujarat High Court in the case of CIT vs. GSRTC (2014 (1) TMI 502 - GUJARAT HIGH COURT ) wherein it has been held that if the amount of contribution fo PF is deposited after the due date then assessee will not be entitled to deduction against the income. Accordingly, this ground of the Revenue is allowed. Additional deduction claimed u/s.80lB - Held that:- Assessing Officer has not objected to the revised quantum of deduction claimed by assessee at ₹ 65.58,922/- which as per assessee was the correct and legitimate amount as per the provisions of section 80IB of the Act. Ld. Assessing Officer has merely disallowed the claim for not filing revised return of income. It is an established proposition of law that the correct income of the assessee has to be assessed by the Assessing Officer and if there is a rightful claim then the same should be allowed to the assessee. More particularly in this case of assessee claimed a deduction u/s 80IB of the Act in the return of income so there is no new claim made during the course of assessment proceedings but it is just a correct claim which has been put forward with due supporting before ld. Assessing Officer and the same should have been allowed to the assessee. CIT(A) has rightly allowed the revised claim of assessee u/s 80IB of the Act at ₹ 65,58,922/-. We therefore, find no reason to interfere with the order of ld. CIT(A). We uphold the same. This ground of Revenue is dismissed.- Decided in favour of assessee. Addition for alleged unreconciled credit differences - Held that:- As wherein regular books of accounts are maintained and the same are not rejected alleged difference is only on account of credit notes issued which have not been cross verified with the impugned parties and the genuineness of transactions recorded by the assessee, no addition was called for by the ld. Assessing Officer. We therefore, set aside the order of ld. CIT(A) and delete the addition - Decided in favour of assessee.
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