TaxTMI 
TaxTMI 
2014 (9) TMI 990
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....523/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 05.12.2012 granted partial relief to the Assessee. Aggrieved by the aforesaid order of CIT(A), Revenue as well as Assessee are now in appeal before us. The grounds raised by the Revenue in ITA No. 631/AHD/2013 reads as under:- 1. On the facts and in the circumstances of the case and in law, the Id. CIT (Appeals) erred in allowing deduction of Rs. 1,44,63,411/- on account of unutilized CENVAT credit without appreciating that the unutilized CENVAT credit at the end of the year was not included in the Profit & Loss account in view of provisions of section 145A of the Act even though the assessee was following mercantile system of accounting. 4. On the other hand, the grounds raised by the Assessee in ITA No. 480/AHD/2013 reads as under:- 1. The learned CIT(A) erred in law and on facts in upholding the order passed by the Assessing officer under section 147 of the Act. It is submitted that it be so held now and order passed under section 147 of the Act be quashed. The order passed under section 147 of the Act as confirmed by CIT(A) be quashed it being also on the change of opini....
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....IT(A) has erred in law and on facts in disallowing prior period expenditure of Rs. 18,44,276/- on the ground that it had not been established that such expenditure accrued during the current year in spite of the appellant furnishing evidences to establish that they have crystallized during the year. It is submitted that it be so held now. 3.1 Without prejudice to the above, the learned CIT(A) erred in law and on facts in not directing the Assessing officer to allow the prior period expenditure as deduction in the year to which the same relates. It is submitted that the learned Assessing officer be directed to allow the expenditure as deduction in computing the income for the assessment year to which it relates. 3.2 The learned CIT(A) erred in facts and in law in treating prior period income on a different footing compared to prior period expenditure and holding that no evidence was provided in respect of prior period income. It is submitted that since the appellant is following mercantile system of accounting, the prior period income also was not liable to be taxed during the year under consideration akin to prior period expenditure. It is submitted that it be so held now. 5. As....
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....s duly considered by the A.O in the assessment order dated 30.03.2010 passed u/s 143(3) of the Act. With respect to valuation of stock ld. A.R. submitted that the Assessee was following the system of accounting of sales net of excise duty and similarly purchases were also accounted for net of excise duty. Excise duty paid on purchases for which CENVAT credit was available was accounted for as "loans and advance" and reflected in the Balance sheet. He further submitted that the inventories were valued at lower of cost or net realizable value by following Exclusive method of accounting of excise duty. It was further submitted that the same method of accounting system has been consistently followed by the Assessee over the years and has also been accepted by the Revenue and further by following the Exclusive method of accounting there was no impact on the profits because if the amount of outstanding CENVAT credit receivable at the year end is treated to be the income of the Assessee, than a corresponding deduction thereof has to the allowed on account of purchases & cost of goods sold. The ld. A.R. further submitted that the working of the inventory by following the Inclusive and Excl....
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....h that there has been a failure on the part of the Assessee to disclose fully and truly all material facts necessary for assessment while issuing a notice for reopening a completed assessment. However it is a settled law that even in case of reopening of assessment within a period of 4 years from the end of relevant assessment years, the A.O has to have reason to believe that income chargeable to tax has escaped assessment on the basis of tangible material. When all material facts necessary for determination of the income has been disclosed by the Assessee and the A.O has taken a particular view on those view on those disclosed facts while passing the assessment order in regular proceedings, then without anything more, it would not be open to reopen those assessment proceedings for it would be a case of change of opinion . In the present case, the reasons for reopening indicate that the re-opening has been initiated on account of 2 grounds namely the non inclusion of CENVAT duty while valuing the closing stock and on account of prior period expenses. From the copy of the reply dated 28th January, 2010 in response to the notice u/s. 142(1) of the Act submitted before the A.O. during....