2010 (2) TMI 1269 - HC - Income Tax

Dispute on MODVAT Credit Treatment under Section 145A: Accounting Methods Impact on Profit

The case involves a dispute over the treatment of MODVAT credit following the introduction of Section 145A. The appellant advocates for the inclusive ... - Issues involved: Treatment of MODVAT credit in relation to accounting methods.Summary:The appeal concerns the treatment of MODVAT credit in light of the introduction of Section 145A u/s 01.04.1999. The appellant argues for the inclusive method of accounting, while the assessee has been following the exclusive method. The respondent, citing the Guidance Note from the Institute of Chartered Accountants, contends that the choice of accounting method does not impact the profit and loss statement.The respondent asserts that any questions raised by the revenue would be of academic interest and would not affect the tax liability. When pressed for clarification on the tax implications of different accounting methods, the appellant's counsel requested time to review the Tax Audit Report for relevant figures.The matter is adjourned for further consideration on 11.03.2010.