TMI Blog2018 (10) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the assessee. With this aspect we are however not directly concerned. Not open for AO to reexamine the entire issue which would be merely on the change of opinion. It is wellsettled as held by the Supreme Court in case of CIT Vs. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA]. Even post 01.04.1989, amendments in section 147, the concept of change of opinion prevented the Assessing Officer to reopen the assessment still holds good. This quite apart, the impugned notice has been issued beyond a period of four years from the end of relevant assessment year. Clearly, there was no failure on the part of the assessee to disclose truly and fully all material facts necessary for assessments. AO referred to the material which was already on record during the course of assessment - Decided in favour of assessee. - R/SPECIAL CIVIL APPLICATION NO. 14446 of 2018 - - - Dated:- 16-10-2018 - MR AKIL KURESHI AND MR B.N. KARIA, JJ. For The Petitioner (s) : Mr B S Soparkar (6851) For The Respondent (s) : Mrs Mauna M Bhatt (174) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od self will find that there is no deviation in method of closing stock employed from Accounting Standard prescribed u/s 145A of the Act. The detailed working for the same will be provided in next submission. 19. Your good self has observed that opening balance of CENVAT Credit IS OF ₹ 9,13,65,897 and accordingly, there is a positive balance of ₹ 2,56,69,111. Your good self has sought an explanation as to why the said positive balance should not be added u/s 145A of the IT Act. At the outset, we submit that the said positive balance of ₹ 2,56,69,111 of CENVAT Credit is of SERVICE TAX RECEIVABLE ON SERVICES AVAILED during the year as is evident on perusal of AnnexxureXII of Tax Audit Report submitted to your good self. In this context, the provisions of Section 145A are worth referring which read as under: 145A. Notwithstanding anything to the contrary contained in section 145,- ( a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be- ( i) in accordance with the method of accounting regularly employed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived : As per the section 145A of the Act, notwithstanding anything to the contrary contained in section 145: ( a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be- ( i) in accordance with the method of accounting regularly employed by the assessee; and ( ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation .- For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment. In view of the above provision, it is evident that the Unutilized Cenvat Credit must be included in the closing stock as the Unutilized Cenvat Credit shall form part of closing stock in view of provision of section 145A of the Act. However, the assessee has not included the Unutilized Cenvat C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull disclosure of the material facts necessary for assessment under Proviso to section 147: On perusal of the assessment records for the year under consideration, it has been observed that the assessee is following exclusive method of accounting instead of mandatory inclusive method which is not permissible as per the provision of section 145A of the Act. As per section 145A of the Act, the assessee is mandatorily required to follow inclusive method of accounting and noninclusion of unutilized Cenvat Credit in closing stock leads to underassessment. During the course of assessment proceedings, necessary and adequate enquiries on the issue involved could not be made as a result the assessee enjoyed the benefit by not furnishing true and full disclosure of the facts in respect of unutilized Cenvat Credit. 9. Applicability of the provisions of section 147/151 to the facts of the case: In this case a return of income was filed for the year under consideration and assessment u/s 143(3) of the Act was completed on 25.05.2015. Since 4 years from the end of the relevant year has expired in this case, the requirements to initiate proceedings u/s 147 of the Act are reason to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of above, it is evident that Section 145A of the IT Act refers to taxes paid/payable and CENVAT on the same in respect of purchases, sales and inventory of GOODS. As submitted herein above, the positive balance of ₹ 2,56,69,111 of CENVAT credit is of SERVICE TAX RECEIVABLE ON SERVICES AVAILED during the year accordingly the provisions of Section 145A are not apply and therefore, the question of addition of the same does not arise. 7. Having heard learned counsel for the parties and having perused the documents on record, it emerges that the sole ground on which the Assessing Officer desired to reopen the assessment was in relation to the assessee's valuation of closing stock. According to the Assessing Officer, unutilized CENVAT credit should have been included in the closing stock which would alter the assessee's profit for the year under consideration. He relied on the provisions contained in section 145A of the Act for this purpose. 8. The documents on record would however show that the entire issue of assessee's treatment of such unutilized CENVAT credit while computing the valuation for the closing stock had come up for minute scrut ..... 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