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2018 (12) TMI 1500 - ITAT KOLKATARevision u/s 263 - assessee had made provision for excise duty on closing stock of finished goods to the tune of ₹ 5,74,21,924/- and that as per the tax audit report of the assessee, a sum of ₹ 30,45,000/- only was paid before the due date of filing of return of income u/s 139(1) of the Act and accordingly, the remaining sum of ₹ 5,43,76,924/- ought to have been disallowed u/s 43B Held that:- As per the provisions of section 145A the excise duty component on closing stock of finished goods is required to be provided for inclusion in the valuation of closing stock of finished goods thereby making it revenue neutral. The assessee sought to explain that this excise duty provision on closing stock of finished goods gets effectively adjusted with the available input credit in the subsequent year before us due date of filing of return of income under 139(1) of the Act. We find that these facts are not properly appreciated by the CIT and we hold that the Ld. CIT had erroneously invoked revisionary jurisdiction in the instant case as there is absolutely no error in the order of the AO or any prejudice that is caused to the interest of the revenue in the instant case. From the facts and evidences available on record, we hold that the assessee is entitled for deduction u/s 43B in respect of provision for excise duty on closing stock of finished goods. CIT erred in concluding that no enquiry was made with regard to this excise duty component on valuation of closing stock by the AO. We find from pages filed by the assessee before us contains questionnaire dated 11.11.2014 issued together with the notice u/s 142(1) wherein, the AO had sought for calculation of valuation of closing stock during the course of assessment proceedings. This has been duly replied by the assessee vide letter dated 13.02.2015 wherein it was subsequently brought to the notice of the AO that the finished goods are inclusive of excise duty. The entire calculation of closing stock of finished goods together with other closing stock details were also furnished as annexure III of the said letter dated 13.02.2015. AO was convinced on the said workings and the calculations given by the assessee and accordingly deemed it fit not to make any addition or disallowance u/s 43B on the impugned issue. This, in our considered opinion, cannot be termed as erroneous action on the part of the AO. Since adequate enquiries were duly made by the ld. AO in the assessment proceedings thus, there is no question of invoking revisionary jurisdiction u/s 263 of the Act by the Ld. CIT. - Decided in favour of assessee.
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