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Section 4 of the Income-tax Act, 1961 - Income - Chargeable us MODVAT credit available to assessee in terms of provisions of Central Excise Act is not income liable to be taxed [In favour of assessee] [A/Y : 1989-90] CIT v. Unique Industries [2008] 307 ITR 350 (Guj.) An amount was available as credit to the assessee in terms of the provisions of the Central Excise Act and the Rules thereunder. The Assessing Officer came to the conclusion that the amount had to be treated as income of the assessee which was liable to tax because the assessee had not utilized the credit for payment of excise duty or adjusted the same against the purchase. Held that in view of the decision of the Supreme Court in CIT v. Indo Nippon Chemicals Co. Ltd. [2003] 261 ITR 275 (SC), the amount added on account of MODVAT credit was to be deleted. Manish R. Bhatt for the Applicant. Mrs. Swati Soparkar for the Respondent. JUDGMENT D.A. Mehta J.- The Income-tax Appellate Tribunal, Ahmedabad Bench-A, has referred the following question for the opinion of this court under section 256(1) of the Income-tax Act, 1961 (the Act) at the instance of the Revenue. "Whether, on the facts and circumstances of the case, the Tribunal was right in upholding the order of the Commissioner of Income-tax (Appeals) deleting the addition of Rs. 3,40,644 made on account of Modvat credit?" 2. The assessment year is 1989-90, the relevant previous year being the financial year ended on March 31, 1989. The amount of Rs. 3,40,644 was available as credit to the assessee in terms of the provisions of the Central Excise Act and the Rules there under. The Assessing Officer came to the conclusion that the amount of Rs. 3,40,644 had to be treated as income of the assessee which was liable to tax because the assessee had not utilised the credit for payment of excise duty of adjusted the same against the purchase. 3. In the appeal filed by the assessee, the Commissioner (Appeals) followed the Calcutta Bench decision in the case of M/s. Berger Paints India Limited and allowed the appeal. The Tribunal has…

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