2012 (3) TMI 661

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....ollowing issues :- "1. The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the learned Deputy Commissioner of Income-tax, Circle 2(2) (OSD) (hereinafter referred to as 'the Assessing Officer') in making an addition of a sum of Rs. 21,02,509/- being unutilised Cenvat Credit Receivable, stating that since the appellant has shown the same as receivable in its balance sheet, it represents income accrued to the appellant. 2. The learned Commissioner of Income-tax (Appeals) failed to appreciate the fact that after making adjustments as provided under section 145A, no adjustment to taxable income was necessary. 3. The appellant submits that the learned Assessing Officer be directed to delete....

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....eceivable' is not an income but is benefit accruing to the assessee which may be set off against the excise duty on sale of goods. As an alternate plea, it was submitted before the CIT(Appeals) that when the Assessing Officer has excluded Rs. 18,448/- pertaining to capital of goods from Cenvat Credit then by the same logic a sum of Rs. 5,49,159/- on capital goods also needs to be excluded. In support of this, a statement was also furnished before the CIT(Appeals). 4. The CIT(Appeals) after analysing the provision of section 145A and the nature and character of unutilised Cenvat Credit, agreed with the finding given by the Assessing Officer and held that there is no logic while Cenvat Credit will not be intended to be included in section ....

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....at the provisions of section 145A are absolutely clear, which clearly brings within its ambit all taxes, duty or fee by whatever name called. The Cenvat Credit is a part of excise duty which has to be adjusted and taken part of the closing stock. To this extent, the observations and the finding of the Assessing Officer as well as the CIT(Appeals) is upheld. However, there is considerable merits in the contention of the learned AR that corresponding change in the opening stock should also be made as held by the Hon'ble Delhi High Court in the case of CIT vs. Mahavir Alluminium Ltd. (supra), wherein it was held that if any adjustment was required to be made by statue, effect should be given to it irrespective of any consequence of income ....