2014 (1) TMI 83

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....ssessee company followed the mercantile system of accounting and the finished goods were valued at the cost price or market price whichever was lower exclusive of excise duty payable. Therefore, the closing stock was required to be adjusted as provided in provisions of section 145A of the Act and the failure on the part of the assessee to do so resulted in undervaluation of the closing stock to the extent of excise duty payable. 3. The CIT(A) erred in law and in facts in deleting the addition of Rs.1,86,782/- made on account of disallowance of payment of employee's contribution to provident fund and as such in holding that the payment made before the due date of filing of return of income u/s 139(1) of the Act was eligible for deduction.....

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....ng that the assessee never claimed a deduction for excise duty as cost of purchase and in the event such an addition to the cost is made, similar amount will have to be allowed as deduction as cost of purchase with resulted effect of no addition at all. 4. Heard parties with reference to material on record and case laws brought to our notice. The learned CIT(A) committed no error in following the Tribunal's decision in assessee's own case for the earlier year in which Section 145A of the Act was duly considered. Admittedly, the true purpose of crediting the value of unsold stock is to balance the cost of those goods entered on the other side of the account at the time of their purchase, so that the cancelling out of the entries relating ....