TaxTMI 
TaxTMI 
2020 (12) TMI 1183
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....he Act) concerning AY 2012-13. 2. The grounds of appeal raised by assessee read hereunder: "1 Ld. CIT (A) erred in law and on facts confirming addition to closing stock by AO of Rs. 2,93,36,409/- unutilized Cenvat credit u/s. 145A of the Act. 2. Ld. CIT (A) erred in law and on facts holding that appellant ought to have prepared its accounts as per the inclusive method prescribed by section 145 A only not appreciating the fact that even if inclusive method is used there is no change in taxable income. 3. Ld. CIT (A) erred in law and on facts in not appreciating that ld. CIT (A) in previous year set aside the issue to AO to verily reconciliation of Cenvat credit & closing stock prepared in similar manner by the appellant. 4. Ld. CIT ....
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.... excise duty and other duties etc. in the closing stock and correspondingly in purchase as well as sale would not eventually impact the resultant profits. It was pointed out that in the exclusive method of accounting adopted, the excise duty, VAT etc. are excluded both from purchase as well as from the sales and closing stock remaining at the end of financial year and therefore the financial results continue to reflect true and correct picture without any under-reporting of income. It was submitted that once the closing stock determined by exclusive method is distorted by increase in its value on account of excise duty component etc. the corresponding adjustments will have to be necessarily made in sales as well as in purchases and opening ....
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.... the absence of any deviation in the method of accounting consistently followed year after year. 3.3. The learned senior counsel thereafter referred to the decision of the Tribunal in the case of ACIT vs. M/s. Lubi Electronics ITA No. 2197/Ahd/2016 order dated 18.02.2019 for the proposition that in a tax neutral exercise, no addition towards unutilized MODVAT/CENVAT credit is warranted. The learned senior counsel also referred to the decision of the Hon'ble Gujarat High Court in the case of Pr. CIT vs. Gujarat Gas Company Ltd. referred to by the coordinate bench in Lubi Electronics (supra) to buttress the stand of the assessee for reversal of action of CIT (A). 4. The learned DR for the Revenue relied upon the orders of the lower auth....
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....alance in bank account that can be adjusted towards the liability of excise duty payable on goods manufactured. The CENVAT credit so accumulated in respect of inputs or capital goods purchased can be availed for set off against the liability of Excise Duty arising to assessee in respect of output of service or manufacture of goods. The outstanding entitlement of CENVAT towards credit thus being fungible thus does not truly represent the actual duty liability in relation to closing stock reported by an assessee. The availability of CENVAT credit is dependent on the extent of utilization of credit against the liability arising to an assessee on goods manufactured and has no co-relation to the closing stock. The Excise Duty component on closin....
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.... law. 6. In the result, Ground Nos. 1 to 4 are allowed for statistical purposes. 7. Ground No. 5 concerns addition of Rs. 4,22,743/- on account of short receipts shown as per Form 26AS. 7.1. In the absence of any cogent explanation offered on behalf of the assessee either before the CIT (A) or before us towards impugned difference detected by Revenue from the annual statement in Form 26AS, we decline to interfere with the order of CIT (A) in this regard. 7.2. In the result, Ground No. 5 is dismissed. 8. Ground No. 6 concerns disallowance of Rs. 17,21,392/- towards reimbursement of travelling expenses paid to foreign parties without deduction tax at source. 8.1. We have heard the rival submissions on the issue. It is the case of the as....