TaxTMI 
TaxTMI 
2014 (3) TMI 964
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....payable on closing inventory of finished stock 3. In this case as per the facts of the case, the appellant had shown the value of closing stock of finished goods at Rs. 1,86,15,485/- in Schedule 5 to the Balance Sheet as on 31.03.2008. However, the value of closing stock of finished goods was shown at Rs. 1,75,67,402/- in Schedule 14 (relating to increase / decrease of stock) to the Profit and Loss account for the year ended 31.03.2008. On being asked to explain the difference of Rs. 10,48,183/- in the valuation of closing stock of finished goods as at the close of the financial year under consideration, it was submitted by the assessee that the difference was an account of Excise duty payable on the closing stock which has been reduced ....
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....rted picture of the true state of the business for the purpose of computing the chargeable income for the year under consideration. In the above case, it was held by the Hon'ble Apex Court that an incorrect system of accounting for the valuation of stock-in-trade which excludes all costs other than the cost of raw materials may diminish the assessment of the taxable profit for the year under consideration. It was observed by the AO that since the goods had been manufactured and were ready for dispatch, the liability of Excise duty had already accrued and hence following the mercantile system of accounting followed by the appellant and the accounting method prescribed u/s 145A the Excise duty component was to be included in the value of ....
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.... - Excise duty not includible in valuing closing stock - Income Tax Act, 1961 Where, on the ground that the assessee had not included in the closing stock the element of excise duty the AO added a sum of Rs. 16,39,000/- to the income of the assessee on the ground of undervaluation of closing stock. Held, affirming the decision of High Court, that the addition of Rs. 16,39,000/- to the income of the assessee on the ground of undervaluation of the closing stock was wrong. Decision in Madras High Court in CIT vs. Dynavision Ltd. (2004) 267 ITR 600 (MAD) affirmed. - CIT vs. Modipon Ltd. (No. 2) 334 ITR 106 (Delhi) Valuation of closing - Excise and Customs Duties - Assessee entitled to exclude excise and customs duties paid from valu....
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....fession". The expression "incurred by the assessee" in section 145A(b) is followed by the words "to bring the goods to the place of its location and condition as on the date of valuation". Thus, the expression "incurred by the assessee" relates to the liability determined as tax, duty, cess or fee payable in bringing the goods to the place of its location and condition of the goods. The Explanation to section 145A(b) makes it further clear that the income chargeable under the head "Profits and gains of business" shall be adjusted by the amount paid as tax, duty, cess or fee. Therefore, the expression "incurred" in section 145A(b) must be construed to mean the liability actually incurred by the assessee. Though the date of manufacture is the....