TaxTMI 
TaxTMI 
2013 (3) TMI 397
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....ice was Rs. 20/- per kg. Statement of Shri Sanjay Agrawal, GM (Marketing) was recorded during this search wherein he admitted that the waste yarn was being shown to be sold @ Rs. 5.50 per kg. where as reality it was sold for Rs. 20/- per kg. A show cause notice was issued by the Joint Director, DGCEI, Regional Unit, Pune wherein the differential value of sales was worked out at Rs. 91,81,006/- to F.Y. 2000-01 to 2004-05 as below:- S.No. Financial Differential value on year sale of waste (Rs.) 1 2000-01 37,23,324/- 2 2001-02 17,88,990/- 3 2002-03 27,29,513/- 4 2003-04 31,71,944/- 5 2004-05 11,21,235/- Total 91,84,006/-91,84,006/- 2.2. It was further noted that assessee has filed a petition before the Central Excise Settlement Commission and had paid the duty on the differential value. In this regard, assessee was asked to explain why the differential value of sales of waste should be not brought to tax as suppression of sales. In response, assessee submitted that the excise duty has been paid to buy peace of mind and it has not under valued the sale of waste. However, the Assessing Officer was not convinced with the above. He observed that under valuation in sales of ....
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....ax (A) confirmed the action of the Assessing Officer. 4. Against the above order the assessee is in appeal before us. 5. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that in this case under valuation in sale of waste was detected by the Intelligence Wing of the excise department during the course of search on 10.12.2003. Assessee has duly filed application before the Excise Settlement Commission. The assessee accepted that as per the assessee's own admission there was difference in the sales figure of waste amounting to Rs. 91,84,006/- pertaining to asstt. year 2001-02 to 2005-06. Assessee has accepted the order of the Settlement Commission in this regard and has duly paid excise duty of Rs. 143,73,644/- on the alleged sales amount of Rs. 91,84,006/- for the financial year 2001-02 to 2004-05. In light of the above, we find that now the submission of the assessee is that it has accepted the verdict of Settlement Commission and the orders of the authorities in Excise Department only to buy peace of mind. This contention in our considered opinion, does not have any cogency. The submissions of the assessee that no addition i....
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....vernnor India (P) Ltd. (2007) 162 Taxman 60 Delhi, it was held in case where foreign currency is held on revenue accounts. Increase in liability on accounts of fluctuation in rate of foreign exchange prevailing on last day of financial year is not notional or contingent and therefore, can be allowed as deduction in term, of section 37(1). The amendment to section 43A providing that amount by which liability is increased or reduced as a result of change in rate of exchange during any previous year after acquisition of such assets would be taken into account at time of making payment irrespective of method of accounting adopted by assessee is prospective prior to said amendment in the capital account cases where cost of assets has been either paid fully or in part prior to fluctuation in rate of foreign exchange, cost of assets would corresponding be permitted to be reworked for purpose of repayment or depreciation or investment allowance as the case may be with reference to rate prevailing on last days of financial year in which that fluctuation occurs." 9. Considering the above, Ld. Commissioner of Income Tax (A) held that he was of the opinion that before amendment to section 43A....
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....of the method of accounting adopted by the assessee, shall be added to, or, as the case may be, deducted from-- (i) the actual cost of the asset as defined in clause (1) of section 43; or (ii) the amount of expenditure of a capital nature referred to in clause (iv) of sub-section (1) of section 35; or (iii) the amount of expenditure of a capital nature referred to in section 35A; or (iv) the amount of expenditure of a capital nature referred to in clause (ix) of sub-section (1) of section 36; or (v) the cost of acquisition of a capital asset (not being a capital asset referred to in section 50) for the purposes of section 48,and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset as aforesaid: Provided that where an addition to or deduction from the actual cost or expenditure or cost of acquisition has been made under this section, as it stood immediately before its substitution by the Finance Act, 2002, on account of an increase or reduction in the liability as aforesaid, the amount to be added to, or, as t....