TaxTMI 
TaxTMI 
2019 (11) TMI 1700
X X X X Extracts X X X X
X X X X Extracts X X X X
....25,73,921/- by Pr. CIT is completely wrong and unjustified." 2. Brief facts of the case are that the assessee filed return of income on 30.09.2014 declaring income at Rs. 16,92,180/- . Later on the case was selected for scrutiny and the AO after disallowing Rs. 94,561/- on account of freight & transportation charges, income tax demand & TDs demand and penalty in electricity charges completed the assessment on 29.09.2016. Later on the Pr.CIT, Sambalpur called the assessment record and observed that the AO has not examined the provisions of Excise Duty of closing stock of finished goods debited into profit and loss account which has been shown as an outstanding liabilities in the balance sheet in the Schedule -7. He also noted that there i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pto the AY 2014-15, U/s 145 of the Income Tax Act, 1956, Accounting Standard-1 relating to disclosure of accounting policies was applicable. This standard specifies that concept of consistency has to be followed. The assessee has consistently follows this method. Hence as notified by the CBDT, the standard has to be followed. This fact is not considered by the Ld. Commissioner of Income Tax. (c) While Valuing the stock, the same method has to be followed for valuing the opening stock and closing stock, the assessee can't have two method. This is as per judgement of [1993] 200 ITR 496 (GAU.) HIGH COURT OF GAUAHATI Commissioner of Income-tax v. Doom Dooma India Ltd. 3. Sec. 43B of the Act applies only to those deduction,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot applicable. 6. As the provision of Excise Duty of Rs. 25,73,921/- has not been claimed as expenditure, question of addition u/s. 43B cannot arise. 7. The Provision of Excise duty of Rs. 25,73,921/- on Finished Goods of dt 31.03.2014 (A/Y 14-15) was reversed in the books of a/c by Credit P & L A/c on dt 01.04.2014 (in A/Y 15-16). So the liability of provision of Excise Duty on Finished Goods account becomes Nil in the book after dt 01.04.2014. And Actual Excise duty was paid on this closing stock of Finished goods (along with sale of Finished Goods of April 14) in April 2014 which is Rs. 48,37,392/- as per point No-8 Below 8. The Actual Liability to pay Excise duty is arise only at the time of despatch of finish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s account which has not been examined by the AO. Therefore, the Pr. CIT has rightly invoked his revisionary powers. 6. After hearing both the sides and perusing the entire material available on record, we observe from the trading profit and loss account submitted by the assessee, he has made provision on excise duty from the closing stock of finished goods and showing it as a liability in the balance sheet. From the statements of the assessee that there is no effect in the profit and loss account, it is notable that if there is no effect in the profit and loss account after making provisions and showing as liability in the balance sheet then why the assessee is making provisions in his profit and loss account. The reason for making provi....