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TMI Blog2016 (5) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Appeals) erred in confirming the addition made by the assessing officer of Rs. 45,96,066/- in respect of excise duty component to be included in the valuation of closing stock of raw materials (consisting of a sum of Rs. 28,22,607/- claimed by the appellant as deductible and another sum of Rs. 17,73,459/- held to be includible by the assessing officer), on the facts and circumstances of the case. 4. The learned Commissioner (Appeals) failed to appreciate that the appellant had changed the method of valuing the stock of raw materials to exclude excise duty component thereof to comply with the applicable Accounting Standard as prescribed by the Institute of Chartered Accountants of India and accordingly claimed a sum of Rs. 28,22,607/- which was included in the valuation of closing stock in the immediately preceding assessment year and hence offered to income in that assessment year. 5. The learned Commissioner (Appeals) further failed to appreciate that the differential value of excise duty on the closing stock and the opening stock of Rs. 17,73,459/- is not required to be added since on correct and proper application of the provisions of section 145A, the inclusion of duti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as on 1/4/2009 and 31/3/2010 and addition of Rs. 5,10,367/- on account of foreign travel expenditure holding to be capital expenditure. It was submitted during the course of assessment proceedings of assessment year 2009-10 that excise duty was included as part of the value of closing stock for income-tax purpose even though in the books of account excise duty was not included in the valuation of the closing stock. However, during the previous year relevant to assessment year under consideration and onwards, this method of accounting was changed whereby excise duty element was not included as a part of the closing stock for income-tax purpose. As a result of this, an amount of Rs. 28,22,607/-, being excise duty included in the valuation of closing stock for earlier years and offered to tax was claimed as a deduction during the year under consideration. It was further claimed that in the closing stock as on 31/3/2010, of excise duty of Rs. 45,66,064/- was included. Out of this, excise duty component included in the opening stock was Rs. 28,22,607/- and it was the contention of the assesseecompany that the balance amount of Rs. 17,73,459/- does not warrant addition as the same ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise duty component of Rs. 45,96,066/- made by the assessing officer as part of the closing stock of raw materials. However, the learned Commissioner (Appeals) upheld this addition made by the assessing officer vide order dated 08.01.2014. 3. It is further submitted that the appellant was advised by the earlier counsel that the addition made by the assessing officer on account of inclusion of excise duty component in the closing stock of raw materials would only result in additional income tax liability for the impugned assessment year and would be available as deduction in the following assessment year. Thus, the appellant was under a bonafide impression that the outcome of its appeal before the Commissioner of Income Tax (Appeals) does not prejudicially impact its tax liability over the years. 4. Subsequently, the appellant approached the present counsel for advice on certain tax matters. The present counsel while verifying the papers examined and studied the assessment and appeal records for earlier years and enquired whether the order passed by the Commissioner of Income Tax (Appeals) has been challenged before the Hon'ble Income-tax Appellate Tribunal, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is placed on the decision of the Hon'ble Apex Court in the case of Collector, Land Acquisition vs. MST.Katiji and Others (1987) 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., Vs Smt. Nirmala Devi and Others 118 ITR 507. Further the appellant relies on another decision of the Hon'ble Apex Court in the case of Radha Krishna Rai Vs. Allahabad Bank & Others [2000] 9 Supreme Court Cases 733. " 6. Thu, the appellant seeks to explain the delay in filing the present appeal that it is on account of wrong advice given by the earlier counsel that no appeal was filed in time. However, the appellant has neither revealed source of such advice nor tried to explain delay of each day. The Hon'ble jurisdictional High Court in the case of Spporthi Sadan Convent vs. CIT (68 taxmann.co. 245)(Kar) on identical facts held that the delay cannot be condoned as ignorance of law is not an excuse and the assessee had not revealed source of ill-advice given. The Hon'ble High Court held in parat.7 to tell as follows: "7. This is not a case wherein the appellant is an illiterate person, who may not know the repercussion in law. Further, it is the specific case of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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