2006 (7) TMI 573

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....rh Bench "B", Chandigarh (for short, "the Tribunal"), in I. T. A. No. 375/Chandi/99, raising the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that central excise duty component could not be included in the value of closing stock ? (ii) Whether, on the facts and in the circumstances of the ....

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...., in I. T. A. Nos. 99 and 198/Chandi/1996, I. T. A. Nos. 85, 299 and 1237/Chandi/1998. The relevant paragraph 9 of the order of the Tribunal in I. T. A. No. 462/Chandi/1995 is reproduced below : '9. Coming to ground No. 5, the Deputy Commissioner of Income-tax has dealt with the issue in paragraph 8 of the assessment order, which mentions that the assessee had not included excise duty on stock ....

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.... Representative relied on the order of the Deputy Commissioner of Income-tax and submitted that the case law cited before the learned Commissioner of Income-tax (Appeals) stands overruled in CIT v. British Paints India Ltd. [1991] 188 ITR 44 (SC) and it was urged for restoration of the Assessing Officer's order. Learned counsel, on the other hand, submitted that since this excise duty amount was a....

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.... hon'ble Supreme Court in CIT v. Indo Nippon Chemicals Co. Ltd. [2003] 261 ITR 275 ; [2003] 1 RC 208 held that merely because the Modvat credit was an irreversible credit available to manufacturers upon purchase of duty-paid raw material, that would not amount to income which was liable to be taxed under the Act : income was not generated to the extent of the Modvat credit on unconsumed raw materi....