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In the present day controversy for deduction of Modvat/Excise Duty/Custom duty paid on inputs the revenue has often opined that the inclusion of such cost in the unsold closing stock with corresponding claim for deduction u/s 43B is not permissible. In CIT v. Berger Paints (India) Ltd. (254ITR498) the Calcutta High Court held that section 43B supersede any accounting method that is contrary to it. The Court while admitting that though section 43 B creates a distortion in the mercantile system yet if the statute intends it by clear words, then the Court, and even more so the assessee, must honour such distortion and accept it as a fact of business life.

The assesses are therefore on a strong wicket on such claim.

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