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2009 (12) TMI 43 - HC - Income TaxValuation of Closing Stock - The assessee claimed deduction of excise duty and custom duty payable from the value of closing stock. The Assessing Officer of the opinion that the excise duty payable on finished goods is not taken into account for the purpose of valuation of stock of finished goods. The Income tax Officer added back the excise duty payable on finished goods. The first appellate authority deleted the addition so made. The department preferred an appeal before the Income Tax Appellate Tribunal and the Income Tax Appellate Tribunal following the decision in the case of Commissioner of Income Tax vs. English Electric Co. Of India Limited reported in [2008 -TMI - 15290 - MADRAS High Court] held that excise liability not to be included in valuation of closing stock. The Assessing Officer disallowed the investment allowance claim on the ground that by notification 50 - 233(e) dated 19.03.1990, the Government abolished the scheme of investment allowance with effect from 01.04.1990. – held that - the imported goods are yet to be cleared from the customs and they still remain in the bonded warehouse and the manufactured goods are also very much available within the assessee's factory and it is not cleared by payment of excise duty. - excise liability not to be included in valuation of closing stock - that increase in the liability of the assessee during the previous year on account of the change in the rate of exchange is part of the actual cost of the machinery acquired from a foreign country and the assessee is entitled to investment allowance on the additional cost - answered in favour of the assessee
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