2015 (5) TMI 180

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....is appeal has been filed by Revenue against the order of Commissioner of Income Tax (Appeals)-II, Surat, dated 30.06.2011 for A.Y. 2005-06 on the following grounds. "1. On the facts and circumstance of the case and in law, the Ld. CIT(A)-II, Surat, has erred in deleting the addition of Rs. 14,32,533/- towards unutilized MODVAT/CENVAT without noting the facts that unutilized MODVAT/CENVAT credit....

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....ee and having considered the same CIT(A) has deleted the addition. 2.2 Same has been opposed before us on behalf of Revenue inter alia submitted that CIT(A) erred in deleting addition of Rs. 14,32,533/- towards unutilized MODVAT/CENVAT credit without noting the facts that unutilized MODVAT/CENVAT credit was required to be included in total income of assessee and assessee failed to substantiate ....

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....account was on account of fact that while excise duty on purchases of input (yarn) was 12%, which was available to assessee for set off against payment of excise duty on cloth manufactured by it, rate of excise duty on cloth manufactured was only 4%. Therefore, there was a debit balance in the MODVAT receivable account at the beginning of the year at Rs. 13,13,782/-. During the year, an amount of ....

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....eceivable account to the income of the assessee. In this background, CIT(A) was justified in holding that debit balance appearing in MODVAT receivable account is amount which the assessee has already debited in books of account alongwith purchases and since it has opted out of scheme of excise duty payment on manufactured cloth from the MODVAT account, assessee has not been able to set off the abo....