Commissioner of Income Tax vs Modipon Ltd.

The following three questions of law have been referred for our opinion u/s 256(1) of the Income Tax Act, 1961:

1.Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in allowing relief of custom duty paid included in closing stock as allowable u/s 43B following the order of the Tribunal (Special Bench)?

2.Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the Excise Duty on unsold items is to be excluded while determining the value of the closing stock as adopted by the assessee?

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing to exclude the expenditure incurred on account of rent, repairs, insurance and depreciation on the reasoning that these are specifically allowable under Sections 30, 31 and 32 and are not hit by the provisions of Section 37(4) of the Income Tax Act?

Learned Counsel for the parties are agreed that in view of our decision in ITR No. 40/1996, decided on 10-8-2007 in respect of the same assessee, first two questions are required to be answered in favour of the assessee and against the revenue while the third question is required to be answered in favour of the revenue and against the assessee.

The reference is disposed of accordingly.