TMI Blog2013 (3) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was claiming MODVAT - Held that:- As decided in Commissioner of Income-Tax Versus Indo Nippon Chemicals Co. Ltd. [2003 (1) TMI 8 - SUPREME COURT] unable to accept the view of the AO that merely because Modvat credit is an irreversible credit available to the manufacturers upon purchase of duty paid raw material, it would amount to income which is liable to be taxed under the Act. AO adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessment Year 2004-05 connected with C.O. No.52/Luc/09. In the memo of appeal the following questions of law have been proposed:- 1. Whether Hon'ble Income Tax Appellate Tribunal was justified in not appreciating that yield in this case could not be worked out and therefore ratio of input materials and output materials could not be compared. The A.O. has rightly applied the G.P. rate of 8%? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal was not justified in providing that in the case of MODVAT the excise duty paid on raw material should also be included in the value of the opening stock. The Tribunal has held that the assessee was adopting the exclusive method for valuation of the closing stock and as such, the excise duty was not included in the value of the closing stock. The Assessing Authority invoked the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hod at the time of purchase, and the net method of valuation at the time of valuation of the stock on hand. By this method, which is wholly erroneous in our view, he assumed that the income, to the extent of the Modvat credit on the unconsumed raw material, was generated, which was not reflected in the accounts and attempted to bring it to charge under the Act." In view of the above, we do not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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