TaxTMI 
TaxTMI 
2021 (5) TMI 71
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....o P&L A/c on finished goods is as per Accounting Standard-2 and Guidance Note issued by the ICAI, which has already been included in closing stock and that there is no effect in Profit & Loss A/c for the year under consideration. 5. The Ld. CIT(A) ought to have correctly followed the Excise Duty Rules and also the Accounting Standards with regard to the treatment of Excise duty in the books of account. 6. The Ld. CIT(A), ought not to have considered excise duty on finished goods for the purpose of application of Sec 43B of the Act, Since liability to pay excise duty has not arisen under the governing laws of Excise Duty. 7. The Ld. CIT(A) ought to have appreciated that the liability towards Excise Duty has been discharged in subsequent months when the closing stock was sold. 8. The Ld. CIT(A) ought to have appreciated that all the expenditure relating to the excise duty has been accounted for by including in the closing stock of finished goods and the source of funds for meeting the above said expenditure has been met by way of adjustment from CENV AT Credit available to the company on the purchases. 9. The Ld. CIT(A) ought to have appre....
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....ne of Rs. 3,44,340/- u/s. 35D of the Income Tax Act, 1961 as the same is allowable as expenditure as per the provisions of Income Tax Act, 1961. 22. The appellant may add or alter or amend or modify or substitute or delete or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal." 2.1. As the said additional grounds are legal grounds, wherein, the facts are on record and facts do not require fresh investigation, following the decision of Hon'ble Supreme Court in the case of National Thermal Power Co., Limited Vs. CIT 229 ITR 383 (SC), we admit the said additional grounds of assessee. 3. Briefly the facts of the case are that the assessee company engaged in the business of manufacturing and trading if iron and steel products, filed its return of income for the AY 2011-12 on 16/07/2012 admitting total income at Rs. 2,70,97,150/- under normal provisions and at Rs. 3,24,53,596/- under book profit. Subsequently, the case was selected for scrutiny under CASS and notices were issued u/s. 143(2) and 142(1). The AO completed the assessment u/s. 143(3) of the Act on 14/03/2014 by determining the total income at Rs. 3,89,39,8....
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....ction 69C, the expenditure has been incurred, booked and stands explained as to the source of such expenditure, no disallowance is warranted u/s. 69C. He contended that there is incorrect application of law by the AO to bring such amount under the disallowance which is against the principles of natural justice. He submitted that the excise duty is paid in the regular course of business on the manufacture of goods and it is an expenditure incurred wholly and exclusively for the purpose of business. He submitted that when the assessee submitted the excise duty returns for the FY 2010-11, it is evident that the expenditure has been genuinely incurred. 6.4. On the other hand, the ld. DR besides relying on the orders of authorities below, submitted that since the assessee has not paid the excise duty out of its books for the year under consideration, the AO has rightly disallowed the same u/s. 69 of the Act. 6.5. Considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. As per Section 43B(a) of Income Tax Act, deduction is allowed on "any sum payable by the assessee by way of tax, duty, cess or fee." The credit o....
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....pertains to unexplained expenditure which can be invoked only if source of expenditure incurred by the assessee is not satisfactorily explained and the disallowance would be the income out of the amount covered by such expenditure. He, therefore, contended that the issue in the instant case is completely different from that mentioned u/s. 69C of the Act. He prayed for the deletion of disallowance made u/s. 69C of the Act. 7.3. Ld. DR, on the other hand, relied on the orders of revenue authorities. 7.4. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We observe from the table as narrated above that it is not clear as to whether the difference in amounts arisen are related to the current year or carried forward from the previous year. If the difference in amounts are related to the previous year, the addition cannot be made in the current year. If the difference in amounts are arisen during the current year, addition can be after affording proper opportunity of being heard to the assessee to reconcile the difference in amounts for the year under consideration. Therefore, in our considered opi....