D.R. Singh J.M.: - (1.) WITH this common order, we propose to dispose of both the appeals filed by the revenue, together, because most of the issues involved therein are identical, for the sake of convenience.
(2.) In ITA No. 1443/Chd/1994, the revenue has taken the following effective grounds : 1. On the facts and in the circumstances of the case, the learned Commissioner (Appeals) has erred in deleting the addition of Rs. 7,47,227 on account of Modvat. The assessing officer valued the closing stock of the assessee by including the amount of Modvat against the valuation shown by the assessee after excluding the amount of Modvat. 2. The learned Commissioner (Appeals) has further erred in allowing relief of Rs. 20,54,450 out of addition of Rs. 22,21,116 made by the assessing officer on account of payment of royalty as that of technical know-how treating the payment under section 35AB. The learned Commissioner (Appeals) has also erred in deleting the disallowance of Rs. 45,527 made by the assessing officer under section 37(4) on account of guest house maintenance expenditure. 3. In ITA No. 1444/Chd/1994, the revenue has taken the following effective grounds : 1. On the facts and in the circumstances of the caise, the learned Commissioner (Appeals) has erred in deleting the addition of Rs. 13,07,318 made by the assessing officer on account of MODVAT. The assessing officer made the valuation of closing stock by including the amount of MODVAT as against the valuation made by the assessee after excluding the amount of MODVAT from the closing stock. 2. The learned Commissioner (Appeals) has further erred in allowing relief of Rs. 27,20,440 out of addition of Rs. 32,28,529 made by the assessing officer on account of payment of royalty as that of technical know-ho treating the payment under section 35AB.
(3.) FIRST, we shall take up ground No. 1 of both the appeals together as the issue involved therein, i.e., whether the closing stock is to be valued by including the amount of MODVAT or after excluding the same, is common.;