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Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock - Assessment year 1987-88 - Whether excise duty liability is not to be included in valuation of closing stock - Held, yes CASE REFERRED TO CIT v. English Electric Co. of India Ltd. [2000] 243 ITR 512 / 109 Taxman 401 (Mad.) [Para 4]. J. Naresh Kumar for the Appellant. V.D. Gopal for the Respondent. JUDGMENT S.R. Singharavelu, J. - The substantial question of law involved in this case is : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of Income-tax (Appeals) directing the exclusion of the excise duty from the closing stock valuation ?" 2. The assessee is a private limited company carrying on the business of manufacture and sale of television sets. The assessment year is 1987-88. The assessee was following a consistent system of accounting in excluding excise duty in the valuation of its stock from year to year. The introduction of section 43B of the Income-tax Act has also made this a very convenient system of accounting. 3. Even according to the Assessing Officer, there was no attempt made by the assessee in changing the system of accounting that had been consistently followed. It is also not the case of the Assessing Officer that the assessee failed to disclose true and correct profits. It has also been consistently held that excise duty need not be included in the cost price while valuing the closing stock. It has now become an accepted proposition that the assessee is empowered to change its method of accounting regularly…

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