With the interest for the purchase of credit inputs and capital goods the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench held that Unutilized CENVAT can be availed for initiated upon the liability of tax.
The taxpayer M/s. Asta India Pvt. Ltd. has requested upon the order of Income-tax commissioner in which Rs 2,93,36,409 represents unutilized CENVAT / VAT credited for the related financial year while for Section 145 A the AO has illegally summoned the provision for the act to improve the value of the closing stock for the amount.
The problem raised in this matter was that the CIT (A) erred in law including on points validating the addition to closing stock by AO of Rs. 2, 93, 36, 409/- unutilized Cenvat credit u/s 145A of the Act.
The assessee’s company has submitted the same and carries the technique concerning the accounting for the case and excise duties or other levies have not been calculated. The profits were not get impacted by closing the stock and purchase or sale of the stock.
At the end of the financial result for the financial year the adopted technique for accounting the excise duty, Value Added Tax (VAT), etc. are not been included wither from sale or purchase and closing of the stock. Thus correct results from accounting will come without any reporting of the income.
According to the inclusive approach and exclusive approach the CIT(A) has selected the problem against the assessee on the point which requires settlement within the financial accounts and which is not been provided.
The CENVAT credit is an entitlement for the central tax on the purchase of inputs relevant to the formation of final products said by the Vice President, Rajpal Yadav. The CENVAT credit is provided with relation to the tax paid on capital goods as well such as machinery, plant, spare parts of machinery, etc. it is similar to the amount credit in the bank account which can be settled against the liability of the taxes on the manufactured goods.
“The CENVAT credit so accumulated in respect of inputs or capital goods purchased can be availed for set off against the liability of Excise Duty arising to the assessee in respect of output of service or manufacture of goods,”
“The CIT(A), in our view, ought to have given a reasonable opportunity to the assessee for substantiating its claim that method of accounting followed by the assessee does not impinge upon the provisions of Section 145A of the Act, in tandem with the action of the CIT(A) in A Y 2010-11.”
