TaxTMI 
TaxTMI 
2018 (1) TMI 1739
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....ition of Rs.276,12,87,066/- in respect of excise duty on closing stock. 3. Brief facts of the case are that the assessee is engaged in manufacture and sale of tobacco products, consumer goods, hotel business etc. The assessee filed its return of income on 27.11.2006 declaring total income of Rs.3041,42,53,870/- but subsequently filed revised return on 19.03.2008 declaring total income of Rs.3040,47,74,966/-. Consequently, assessment was completed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") on 31.12.2009 at a total income of Rs.3126,11,87,690/-. Subsequently, the AO was of the opinion that the assessee's claim of double deduction in respect of excise duty on closing stock resulted in under assessment of in....
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....5-06 too, the issue had been reopened by the AO and my Ld. Predecessor CIT(A) had allowed the claim of the assessee on the basis of the following arguments:- "Since the closing stock is (mostly) cleared in the subsequent year prior to due date of filing of return of income, it claims deduction for excise duty on the clearance out of the same as per proviso of section 43B of the IT Act, 1961. As and when it files return of income for the subsequent year, it adds back excise duty on opening stock as the same had already been claimed as deduction in the return of the preceding year in form of excise duty on (the then) closing stock. I do not see as to how the same can be called claiming deduction doubly. In fact, the entire exercise is reve....
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....her could be challenged under the same law of claiming deduction for disallowance u/s. 43B of the Act as well. In so far as the Ld. DR has not been able to point out any specific defect in the accounting therein when on the judicial citations as relied upon and were before the Tribunal as well as the Hon'ble High Court the matter was actually clarified in so far as the valuation of stock is not part of the claim of excise duty remaining unpaid. Therefore, it was misapplication of facts and figures in the mind of the AO to have discovered double deduction for the purpose of disallowance u/s. 43B of the Act." Appeal filed by the department against the said order was dismissed by the Hon'ble Calcutta High Court in CIT, Kolkata-I Vs.....
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....&L Account in respect of the said excise duty on closing stock for the FY ended on 31.03.2006, a separate deduction u/s. 43B of the Act was claimed for Rs.276,12,87,066/- and the said amount was added back in the following year i.e. AY 2007- 08. We note that the deduction claimed in the earlier year i.e. AY 2005-06 of Rs.270,06,83,951/- was added back in the relevant assessment year under consideration i.e. AY 2006-07. This treatment is inconsonance with the ratio decidendi of the Hon'ble Supreme Court decision in Berger Paints India Ltd. Vs. CIT 266 ITR 99 (SC). We note that similar issues arose in subsequent year in assessee's own case for AYs. 2009-10, 2008-09 and 2007-08 and the Tribunal held that the treatment carried out by the assess....