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2018 (7) TMI 1416 - HC - Income TaxValuation of closing stock of sugar and molasses - Excise duty payable addition in the value of closing stock - Held that:- The assessee was adopting the mercantile system of accounting. The true value of closing stock would include the amount of any tax duty, cess or having fully paid, payable or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation which is evident from the provisions of Section 145A - the provisions of Section 145A of the Act were introduced by the Finance Act No.2 of 1988 w.e.f. 01.04.1999 which are infact clarificatory in nature and, therefore, it would be applicable even for Assessment Years prior to Assessment Year 1999-2000. Thus, provisions of Section 145-A would be applicable for the Assessment Year in question. Excise duty becomes payable, the moment excisable goods are manufactured as the taxable event under Section 3 of the Central Excise Act is manufacturing or production of the excisable goods. It would be immaterial whether the assessee has paid the excise duty or not for the purposes of arriving at the correct valuation of the closing stock. Even if the excise duty has not been paid and the assessee has postponed its payment, the valuation of the goods will not get affected. Accounting system of the assessee would be of no consequence to arrive at the true and correct valuation of the closing stock. - Decided in favour of the Revenue
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