Oriental Rubber Industries Ltd., Pune V. Addl. CIT, Range-3, Pune

ITA 550/PUN/2013

• Counselvise Citation: 55024514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Question of law
• Section: 143(3); 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO . 550 / P N/ 20 1 3 ASSESSMENT YEAR : 200 9 - 10 ORIENTAL RUBBER INDUSTRIES LTD., 20, SHRAVANI GARDENS, VIMAN NAGAR ROAD, PUNE VS. A DDL. COMMISSIONER OF INCOME TAX, RANGE - 3 , PUNE (APPELLANT) (RESPONDENT) PAN NO. AAACO1592L ITA NO . 517 / PN/20 1 3 ASSESSMENT YEAR : 200 9 - 10 DY. COMMISSIONER OF INCOME TAX, CIRCLE - 3 , PUNE VS. ORI ENTAL RUBBER INDUSTRIES LTD., 20, SHRAVANI GARDENS, VIMAN NAGAR ROAD, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAACO1592L A SSESSEE BY: SHRI KISHOR PHADKE RE VENUE BY: SHRI S.P. WALIMBE DATE OF HEARING : 02 - 07 - 2014 DATE OF PRONOUNCEMENT : 22 - 07 - 2014 ORDER P ER R.S. PADVEKAR , JM : - TH ESE TWO A PPEAL S , ONE BY THE ASSESSEE AND ANOTHER BY THE REVENUE , ARE FILED CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - II, PUNE DATED 15 - 10 - 2012 FOR THE A.Y . 200 9 - 10 . 2. WE FIRST TAKE THE ASSESSEES APPEA L BEING ITA NO. 550/PN/2013 FOR DISPOSAL. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND IN THE APPEAL: THE COMMISSIONER OF INCOME TAX (APPEALS) WAS WRONG IN CONFIRMING THE ADDITION OF RS.38,02,226/ - ON ACCOUNT OF SALES COMMISSION CLAIMED BY THE APPELLANT S TATING THAT THE SAME WAS EXCESSIVE & UNREASONABLE AND WERE NOT DEDUCTIBLE. 2 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE 3 . THE FACTS PERTAINING TO THE ISSUE ARE AS UNDER. THE ASSESSEE IS A COMPANY WHICH IS ENGAGED IN THE MANUFACTURING OF CONVEYOR BELTS, RUBBER SHEETS AND SPECIALIZED RUBBER MOLDED PARTS. THE SAID PRODUCTS ARE USED IN THE INDUSTRIAL PRODUCTS AND ARE MAINLY USED IN MINING SECTOR, POWER GENERATION PLANTS, COAL FIELDS, CEMENT INDUSTRY AND OTHER ALLIED INDUSTRIES. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2009 - 10 DECLARING TOTAL INCOME AT RS.6,91,52,560/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE INCOME - TAX ACT. SO FAR AS THE ISSUE BEFORE US IS CONCERNED. 4. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT THE IDENTICAL ISSUE HAS COME FOR THE CONSIDERATION BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2005 - 06 (ITA NO. 518/PN/2009) AND THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE. THE LD. COUNSEL ALSO FILED THE COPY OF THE TRIBUNALS ORDER IN TH E ASSESSEES OWN CASE IN ITA NO. 518/PN/2009 DATED 29 - 04 - 2011 WHICH IS PLACED ON RECORD. 5. IN THIS YEAR ALSO THE ASSESSEE HAS CLAIMED THE SALES COMMISSION OF RS.36,15,585/ - TO AN ASSOCIATED CONCERN NAMELY QUADRANT TRADES PVT. LTD. AND THE ASSESSING OFF ICER MADE THE DISALLOWANCE TO THE EXTENT OF RS.38,02,226/ - BY INVOKING THE PROVISIONS OF SEC. 40A(2)(A) OF THE ACT AS EXCESSIVE AND UNREASONABLE SALES COMMISSION PAID BY THE ASSESSEE TO ITS RELATED CONCERN. AS THE FACTS ARE IDENTICAL IN THIS YEAR, WE, THE REFORE, FOLLOWING THE REASONS FOR C ONFIRMING THE DISALLOWANCE BY THE TRIBUNAL IN THE ITA NO. 518/PN/2009 ORDER DATED 29 - 04 - 2011 FOR THE A.Y. 2005 - 06 , I N THIS YEAR ALSO DISMISS THE GROUND TAKEN BY THE ASSESSEE AND CONFIRM THE DISALLOWANCE. 6. NOW, WE TAKE UP THE REVENUES APPEAL BEING ITA NO. 517/PN/2013 FOR DISPOSAL. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 3 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS.31,41,548 / - WITHOUT APPRECIATING THE FACT THAT THE ASSESSES HAS HIMSELF ADMITTED THAT IN RESPECT OF CONSUMPTION OF RAW MATERIAL THERE WAS DEVIATION FROM THE METHOD OF VALUATION PRESCRIBED U/S.145A AND SECTION 145A(A)(I) CLEARLY STIPULATES THAT PROFITS & GAINS OF BUSINESS ON PROFESSION SHALL BE IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT ADJUSTMENT HAS TO BE MADE IN THE OPENING STOCK AS WELL AS CLOSING STOCK AND HELD THAT GROSS OR NET ACCOU NTING DOES NOT MAKE ANY DIFFERENCE ON THE FINAL PROFIT/INCOME WITHOUT APPRECIATING THAT OPENING STOCK IS THE CLOSING STOCK OF LAST YEAR AND, THEREFORE, COULD NOT BE TINKERED WITH EVEN IF THERE IS CHANGE IN THE METHOD OF ACCOUNTING DURING THE YEAR. 7. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS HON'BLE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2008 - 09 (ITA NO. 1144/PN/2012) . THE LD. COUNSEL HAS FILED THE COPY OF THE TRIBUNALS ORDER IN ITA NO. 1144/PN/2012 DATED 27 - 11 - 2013 WHICH IS PLACED ON RECORD. IN THIS YEAR , AS OBSERVED BY THE ASSESSING OFFICER , FROM THE TAX AUDIT REPORT SUBMITTED BY THE ASSESSEE IT WAS NOTICED THAT THERE IS DEVIATION FROM METHOD OF VALU ATION PRESCRIBED U/S. 145A . IT IS MENTIONED THAT THE CLOSING STOCK HAS BEEN SHOWN AT NET - OFF EXCISE DUTY AND THE ASSESSEE HAS NOT INCLUDED EXCISE DUTY OF RS.31,41,548/ - FOR THE PURPOSE OF VALUATION OF CLOSING STOCK. THE ASSESSING OFFICER INTERPRETED SEC. 145A AND HELD THAT THERE IS A NON - COMPLIANCE OF THE SAID PROVISION. THE ASSESSING OFFICER OBSERVED THAT AS PER SEC. 145A WHICH ESSENTIALLY DEALS WITH THE METHOD OF VALUATION OF THE CLOSING STOCK, THE CLOSING STOCK OF THE BUSINESS HAS TO BE TAKEN AS PER T HE METHOD REGULARLY EMPLOYE D BY THE ASSESSEE AND TO BE FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, DUTY, CESS OR FEES (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, MADE THE 4 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE ADDITION OF RS.31, 41,548/ - BY NOTING THAT THE SAID ADDITION IS MADE U/S. 145A(B) OF THE ACT . ON APPEAL BY THE ASSESSEE T HE LD. CIT(A) DELETED THE ADDITION. NOW, THE REVENUE IS IN APPEAL BEFORE US. 8. IN THE ASSESSEES OWN CASE FOR THE A.Y. 2008 - 09 THE IDENTICAL ISSUE H AS BEEN CONSIDERED BY THE TRIBUNAL AND IT IS HELD AS UNDER: 3.3 AFTER GOING THROUGH THE RIVAL SUBMISSION AND MATERIAL RECORD, WE FIND THAT ASSESSEE HAS CHOICE OF USING METHOD OF VALUATION OF STOCK. HE IS REQUIRED TO FOLLOW THE SAME YEAR AFTER YEAR WHERE METHOD IS CONSISTENTLY FOLLOWED, IT IS NOT OPEN TO ASSESSING OFFICER TO QUESTION THE SAME BY IMPOSING DIFFERENT METHODS AND HAVING ACCEPTED A METHOD IT IS NOT OPEN TO ASSESSING OFFICER TO QUESTION THE SAME. THE ISSUE RELATING TO WHETHER VALUE OF CLOSING S TOCK OF INPUTS, WORK IN PROGRESS AND FINISHED GOODS MUST NECESSARILY INCLUDE ELEMENT FOR WHICH MODVAT CREDIT IS AVAILABLE WAS DEBATABLE ISSUE AT RELEVANT POINT OF TIME. PROVISIONS OF SEC. 145A CLARIFY THAT WHILE COMPUTING VALUE OF INVENTORY AS PER METHOD OF ACCOUNTING REGULARLY EMPLOYED BY ASSESSEE, SAME SHALL INCLUDE THE AMOUNT OF TAX, DUTY, CESS OR FEES PAID OR LIABILITY INCURRED FOR SAME UNDER ANY LAW IN FORCE, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SEC.145A. THE EXPLANATION TO SEC. 145A PROVIDE T HAT FOR THE PURPOSE OF THIS SECTION ANY TAX, DUTY, CESS OR FEE UNDER ANY LAW FOR THE TIME BEING IN FORCE SHALL INCLUDE ALL SUCH PAYMENTS NOTWITHSTANDING ANY RIGHT ARISING AS CONSEQUENCE TO SUCH PAYMENT. HONBLE SUPREME COURT IN THE CASE OF CIT VS. INDO - NI PPON CHEMICALS CO. LTD., (2003) 261 ITR 275 (SC) POINTED OUT THAT VALUE OF UNCONSUMED RAW MATERIAL AND WORK IN PROGRESS AT THE END OF THE YEAR AT NET METHOD WOULD BE CONSISTENT WITH THE PRINCIPLES OF ACCOUNTANCY. ADOPTING GROSS METHOD FOR PURCHASE AND NET METHOD FOR UNSOLD STOCK AT THE END OF YEAR IS NOT SO CONSISTENT AND IS NOT PERMISSIBLE. ADOPTION OF UNIFORM NET METHOD COULD NOT BE FAULTED, WHERE IT IS CONSISTENTLY ADOPTED THAT EXCISE DUTY IS PAYABLE ON REMOVAL FROM FACTORY SITE. BUT WHERE CLOSING STO CK WAS NOT CLEARED, THERE IS NO LIABILITY TO PAY EXCISE DUTY, SO THAT IT COULD NOT BE ADDED IN VALUATION OF CLOSING STOCK. HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. ENGLISH ELECTRIC CO. OF INDIA LTD., (2000) 243 ITR 512 (MAD) RELIED UPON THE NATURE OF EXCISE DUTY FOR DECISION AS TO WHETHER EXCISE DUTY SHOULD BE ADDED TO THE VALUE OF CLOSING STOCK. HONBLE HIGH COURT OBSERVED THAT IT DOES NOT BECOME COST TILL EXCISE DUTY IS LEVIABLE ON SUCH PRODUCTION. SINCE IT 5 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE WAS LEVIABLE ONLY ON REMOVAL MERE PRO SPECT OF LIABILITY COULD NOT CONVERTED INTO AN ASSETS IN THE MANNER EXPECTED BY ASSESSING OFFICER. IF SUCH LIABILITY HAS BEEN INCURRED IT COULD HAVE BEEN ADDED TO THE STOCK WHILE CLAIMING LIABILITY ITSELF AS A CHARGE ON PROFIT WHERE THERE HAS BEEN NO SUCH CHARGE, THE INFERENCE THAT AMOUNT SHOULD BE ADDED TO CLOSING STOCK WOULD NOT BE CORRECT. THIS REASONING WILL POSSIBLY NOT APPLICABLE IN CASES OF DISPUTED DUTY, WHERE IT HAS BEEN ADJUDICATED AS PAYABLE IN A LATER YEAR. 3.1 IT WAS FOUND MISUNDERSTANDING O F THIS POSITION OF ACCOUNT AND LAW, THAT HAS RESULTED IN THE ENACTMENT OF SEC. 145A REQUIRING ANY TAX ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING GOODS TO THE PLACE OF ITS LOCATION AS ON THE DATE OF VALUATION TO BE ADDED TO THE CLOSING STOCK. BUT EV EN THIS PROVISION, IF PROPERLY UNDERSTOOD WOULD REFER TO EXCISE DUTY 'ACTUALLY PAID OR INCURRED'. THE QUESTION OF INCLUSION OF EXCISE ELEMENT IN VALUATION OF STOCK IS NOW A MATTER GOVERNED BY SEC. 145A AND NOT SO MUCH AN ISSUE TO BE DECIDED ON THE BASIS OF ACCOUNTING PRINCIPLES. SECTION 145A HAS ALSO BEEN THE SUBJECT MATTER OF SUBSTITUTION BY THE FINANCE ACT, 2009 WITH EFFECT FROM A.Y. 2010 - 11. PRIOR TO THIS AMENDMENT THE SECTION DID RECOGNIZE THE SYSTEM REGULARLY ADOPTED, BUT SUBJECT TO ADJUSTMENT IN RESPE CT OF ANY TAX, DUTY, CESS, OR FEE WITH REFERENCE TO ACTUAL PAYMENT, SO THAT WHERE NO ACTUAL PAYMENT IS MADE THE AMOUNT COULD NOT BE RECKONED FOR PURPOSES OF INVENTORY VALUATION. SEC. 145A COVERS ONLY SUCH TAX OR DUTY, WHICH HAD BEEN PAID, IT SHOULD NOT MAK E A DIFFERENCE WHETHER THE MANUFACTURED GOODS IN STOCK HAVE LEFT FACTORY PREMISES OR NOT, SO AS TO REQUIRE CLEARANCE UNDER THE EXCISE LAW. WHEN THE ASSESSING OFFICER ADDED THE EXCISE DUTY PAYABLE AS SOON AS THE GOODS WERE MANUFACTURED, THE QUESTION OF INCL USION OF EXCISE OVER THE UNCLEARED GOODS CANNOT ARISE, THOUGH SEC.145A USES THE EXPRESSION 'ACTUALLY PAID OR INCURRED BY THE ASSESSEE'. IT CAN BE TREATED AS HAVING BEEN INCURRED ONLY ON CLEARANCE. IT IS UNDER THESE CIRCUMSTANCES, THE ADDITION FOR EXCISE ON GOODS, WHERE EVEN THE PAYMENT HAS NOT BEEN MADE, WAS FOUND UNTENABLE BY THE TRIBUNAL IN ASHIWN A SHAH VS ACIT (2010) 1 ITR (TRIB) 683 (AHD) WHICH RELIED AND FOLLOWED THE DECISION OF THE HIGH COURT IN CIT VS ENGLISH ELECTRIC CO OF INDIA LTD, (SUPRA) AND CI T VS PARRY CONFECTIONARY LTD (2008) CITED SUPRA. 3.2 WHERE ADDITIONS ARE MADE TO THE CLOSING STOCK ON THE BASIS THAT THE PROCESSING COST HAD NOT BEEN CORRECTLY ASCERTAINED, THE 6 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE ISSUE THAT ARISES, IS WHETHER SIMILAR REVISION OF THE OPENING STOCK WOULD BE N ECESSARY. THE HIGH COURT IN CIT VS INDIAN NATIONAL TANNERY P LTD (2005) 278 ITR 213 (ALL) FOUND THAT THE PRINCIPLE THAT THE OPENING STOCK SHOULD BE VALUED IN THE SAME MANNER AS CLOSING STOCK OF THE PRECEDING YEAR WOULD APPEAR TO BE THE GENERAL RULE. IN THE CASE OF MELMOULD CORPORATION VS CIT (1993) 202 ITR 787 (BOM), THE HIGH COURT HELD THAT IT IS NOT NECESSARY TO REVALUE THE OPENING STOCK ON THE REVISED BASIS AS DONE FOR CLOSING STOCK. IN COMING TO THE CONCLUSION, THE HIGH COURT HAD FOLLOWED THE DECISIONS IN CIT VS MOPEDS INDIA LTD (1998) 173 ITR 347 (AP) WHERE IT WAS POINTED OUT THAT, IF THE OPENING STOCK WERE TO BE DISTURBED, THERE WOULD BE A SNOWBALLING EFFECT, BECAUSE OF THE CLOSING STOCK OF THE IMMEDIATELY PRECEDING YEAR AND THE COMPUTATION OF EVERY EA RLIER YEAR WILL NEED REVISION. IT WAS MADE CLEAR, THAT THE PRINCIPLE, THAT NO CHANGE IS NECESSARY FOR OPENING STOCK IN SUCH CASES, WOULD HAVE APPLICATION ONLY WHERE THE ASSESSEE CHANGES HIS METHOD OF VALUATION BONAFIDE. SIMILAR VIEW WAS ALSO TAKEN IN THE C ASE OF CIT VS MAHAVIR ALUMINIUM LTD (2008) 297 ITR 77 (DEL). 3.3 IN WEST COAST PAPER MILLS LTD VS CIT (2006) 286 ITR (AT) 252 (MUMBAI), THE TRIBUNAL HELD THAT WHERE THERE IS A CHANGE IN METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE INCLUDING EXCISE DUTY IN CLOSING STOCK, IT IS NOT OPEN TO THE ASSESSEE TO REVALUE THE OPENING STOCK. IN THIS CASE, THE ASSESSEE HAD CHANGED THE METHOD BECAUSE OF THE STATUTORY REQUIREMENT OF SEC. 145A OF THE IT ACT. A SIMILAR ISSUE HAD ARISEN IN CIT VS MAHALAXMI GLASS WORKS P LTD (2009) 318 ITR 116 (BOM) WHERE THE ASSESSEE MADE A CLAIM FOR ADOPTION OF CLOSING STOCK OF THE PREVIOUS YEAR IN THE OPENING STOCK OF SUCCEEDING YEAR. THE ISSUE IN THIS CASE RELATED TO STOCK VALUATION ON ADJUSTMENT OF UNUTILIZED MODVAT CREDIT. THE TRIBUNAL ALLOWED THE ADJUSTMENT. SINCE SUCH ADJUSTMENT WAS CONCEALED BY THE DEPARTMENTAL REPRESENTATIVE BEFORE THE TRIBUNAL THAT, IT COULD ISSUE A DIRECTION FOR VERIFICATION FOR ASSESSEE'S CLAIM ON FACTS, THERE WAS NO QUESTION OF LAW TO BE DEBATED BY THE HIGH COURT . 3.4 THE ISSUE RELATING TO WHETHER THE VALUE OF CLOSING STOCK OF THE INPUTS, WORK - IN - PROGRESS AND FINISHED GOODS MUST NECESSARILY INCLUDE THE ELEMENT FOR WHICH MODVAT CREDIT IS AVAILABLE WAS A DEBATED TOPIC. SECTION 145A WAS INDUCTED TO CLARIFY TH AT WHILE COMPUTING THE VALUE OF INVENTORY AS PER THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE, THE SAME SHALL INCLUDE THE 7 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE AMOUNT OF ANY TAX, DUTY, CESS OR FEES PAID OR LIABILITY INCURRED FOR THE SAME. THE EXPLANATION TO SEC. 145A PROVIDES TH AT FOR THE PURPOSES OF THIS SECTION, ANY TAX, DUTY, CESS OR FEES UNDER ANY LAW FOR THE TIME BEING IN FORCE, SHALL INCLUDE ALL SUCH PAYMENT NOTWITHSTANDING ANY RIGHT ARISING AS A CONSEQUENCE TO SUCH PAYMENT. 3.5 IN THE CASE OF THE BOMBA Y HIGH COURT IN THE CASE OF CIT VS . LOKNETE BALASAHEB DESAI SSK LTD (2011) 243 CTR (BOM) 181, IT WAS HELD THAT THE EXCISE DUTY LIABILITY CRYSTALLIZES ON THE DATE OF CLEARANCE OF EXCISABLE GOODS AND NOT ON THE DATE OF MANUFACTURE, AND THEREFORE, EXCISE LIAB ILITY WAS NOT INCURRED BY THE ASSESSEE IN RESPECT OF UNSOLD SUGAR LYING IN STOCK AND COULD NOT BE INCLUDED IN THE VALUE OF CLOSING STOCK OF SUGAR. IT FURTHER HELD THAT THE EXPRESSION 'INCURRED BY THE ASSESSEE' IN SEC. 145A (B) IS FOLLOWED BY THE WORDS 'TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION 1 . THUS THE EXPRESSION 'INCURRED BY THE ASSESSEE' RELATES TO THE LIABILITY DETERMINED AS TAX, DUTY, CESS OR FEE PAYABLE IN BRINGING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION OF THE GOODS. EXPLANATION TO SEC. 145A(B) MAKES IT FURTHER CLEAR THAT THE INCOME CHARGEABLE UNDER THE HEAD' PROFIT AND GAINS OF BUSINESS' SHALL BE ADJUSTED BY THE AMOUNT PAID AS TAX OR DUTY. THEREFORE, THE EXPRESSION 'INCURRED' IN SEC. 145A (B) MUST BE CONSTRUED TO MEAN LIABILITY ACTUALLY INCURRED BY THE ASSESSEE. IN THE CASE OF EXCISABLE GOODS MANUFACTURED AND LYING IN STOCK, EXCISE DUTY LIABILITY CRYSTALLIZING ON THE DATE OF CLEARANCE OF GOODS AND NOT ON THE DATE OF MANUFACTURE. CONSEQUENTL Y, ASSESSEE CANNOT BE SAID TO HAVE INCURRED THE EXCISE DUTY LIABILITY IN RESPECT OF EXCISABLE GOODS LYING IN STOCK TILL THE DATE OF CLEARANCE OF SUCH GOODS. 3.6 IN VIEW OF THE ABOVE FACTS, AND THE RATIO OF JUDICIAL CITATIONS MENTIONED ABOVE THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER OF RS.34,66,768/ - WAS RIGHTLY DELETED BY CIT(A). THIS REASONED FACTUAL LEGAL FINDING OF CIT(A), NEED NO INTERFERENCE FROM OUR SIDE, WHEREIN CIT(A) HAS DELETED THE ADDITION OF RS.34,66,768/ - MADE BY ASSESSING OFFICER BY APP LYING THE PROVISIONS OF SEC.145A OF I.T ACT. 9. AS THERE IS NO CHANGE IN FACTS THIS YEAR W E, THEREFORE, FOLLOWING THE DECISION OF THIS TRIBUNAL IN THE A.Y. 2008 - 09 IN THE ASSESSEES OWN CASE 8 ITA NO S. 550 & 517/PN/2013, ORIENTAL RUBBER INDUSTRIES LTD., PUNE CONFIRM THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION. AC CORDINGLY, THE GROUNDS TAKEN BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS, THE ASSESSEES AS WELL AS REVENUES ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22 - 07 - 2014 SD/ - SD/ - ( R . K . PAN DA ) ( R.S. PADVEKAR ) ACCOUNT ANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 22 ND JULY, 2014 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - II, PUNE 4 THE CIT - II, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// B Y ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE