TMI Blog2019 (3) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... before the end of the financial year of at any rate, latest by the due date of filing the return. Tribunal was correct in holding that the deduction could not have been disallowed by insisting on a direct correlation between the duty paid and the goods manufactured. If for any reason it is found later on that the excise duty was paid in relation to certain goods manufactured, but the funds were not cleared and that therefore, no excise duty liability arose, the adjustment would automatically be made in the later years when the Assessee would estimate its liability for payment of excise duty. Such a situation may arise under various circumstances such as damage or destruction of the goods. However, it would be inconceivable that the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntory when the provision has been made on the basis of internal guidelines and not as per provisions of Income Tax Act, which provides for valuation of closing stock either at cost or at market price ? 2. The Respondent Assessee is engaged in the business of manufacturing cutting tools of specialized kind. The Assessee filed the return of income for the Assessment Year 2004-2005. In this, the Assessee had claimed the deduction of a sum of ₹ 1.86 Crores (rounded of) towards excise duty actually paid. The Assessing Officer, however, objected to a part of his claim to the extent of ₹ 10.06 Lakhs on the ground that the Assessee had treated part of the goods as obsolete and had not cleared for sale in the market. This happene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, as noted, the admitted position is that the amount in question was actually paid by way of excise duty. This liability was computed on the basis of goods manufactured by the Assessee. On the valuation of such goods, the Assessee would make a provision of excise duty liability and actually pay the same either before the end of the financial year of at any rate, latest by the due date of filing the return. 8. Under the circumstances, the Tribunal was correct in holding that the deduction could not have been disallowed by insisting on a direct corelation between the duty paid and the goods manufactured. If for any reason it is found later on that the excise duty was paid in relation to certain goods manufactured, but the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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