This appeal filed by assessee and is directed against order of CIT(A)-I dt. 30th Aug., 2002 at Mumbai for asst. yr. 1999-2000 in matter of assessment under s. 143(3) of IT Act, 1961. We have heard both parties, perused records and other applicable legal position. assessee has raised various issues which are of independent nature, therefore, we shall deal with them one by one. (a). Ground No. 1 is reproduced below: "On facts and circumstances of case, learned CIT(A) legally erred in confirming action of AO in allowing depreciation of Rs. 3,19,79,068." In ground No. 1, issue is regarding optionality of claim of depreciation. learned counsel appearing on behalf of assessee was fair enough in stating that this issue was covered against assessee by decision of Special Bench of Tribunal, Ahmedabad Bench in case of Vahid Paper Converters & Ors. vs. ITO (2006) 100 TTJ (Ahd)(SB) 532: (2006) 98 ITD 165 (Ahd)(SB) wherein it has been held that after amendment of s. 32 and deletion of s. 34 w.e.f. 1st April, 1988, assessee has no option regarding claiming of depreciation and depreciation is to be compulsorily allowed if not claimed by assessee. Respectfully following ratio of Special Bench decision, we reject this ground of assessee. In ground No. 2, assessee is aggrieved by decision of learned CIT(A) in confirming action of AO whereby AO disallowed sum of Rs. 3,84,080 paid to Town Planning Authority, Silvasa, treating same as penalty. During course of assessment proceedings, AO noted that total sum of Rs. 3,84,080 was paid by assessee to Town Planning Authority, Silvasa which comprised of amount of Rs. 3,74,080 towards penalty imposed by Town Planner and Rs. 10,000 of penal interest. impugned payments were disallowed by AO. assessee preferred appeal before learned CIT(A) who after considering submissions made by assessee and findings of AO confirmed action of AO. learned CIT(A) also rejected alternate contention of assessee that amount was paid in respect of construction of shed, therefore, same was of capital nature for reason that penalty was paid for infraction of law and as such this expenditure by itself did not bring any new asset into existence. Aggrieved by decision of learned CIT(A), assessee is in appeal before us. learned counsel appearing on behalf of assessee contended that t h e amount was paid only for technical violation and to regularize construction and it was not in nature of penalty and drew our attention to order of Town Planner to support his contention. learned counsel also put forward alternative plea that expenditure should be treated as capital nature as it was related to construction of building and accordingly, depreciation thereon may be allowed. It was also contended that if expenditure was of capital nature, provisions of s. 37(1) of Act would not be applicable and consequently nature of such payment would be immaterial. We have considered rival submissions, material on record and orders o f authorities below. Admittedly, assessee has incurred expenditure of Rs. 3,84,080 which is towards construction of building without taking permission from concerned administrative/regulatory authority as evident from order of such authority. Every prudent businessman is supposed to take necessary permissions and approvals so as to comply with requirements of law of land. On perusal of order of Town Planner it is abundantly clear that amount is in nature of penalty and, therefore, same is not allowable as per provisions of s. 37(1) of Act. Had it been done, assessee would not have been liable to pay this amount. Further, this amount by itself has not brought any asset into existence and has been paid for negligence or contravention of law by assessee. Accordingly, same is not of capital nature. Thus, we reject both contentions of assessee. Thus, this ground of assessee stands rejected. In ground No. 3, issue is related to disallowance of Rs. 2,03,309 on account of delay in deposit of PF and ESIC dues. Briefly stated facts relating to this ground are that during year under consideration assessee deposited employer s contribution towards PF and ESIC amounting to Rs. 2,25,396 after due dates and disallowed same on suo motu. Similarly, assessee deposited amount of Rs. 2,03,309 pertaining to employees contribution of PF and ESIC after due dates. employees contribution was included in income of assessee as per provisions of s. 2(24)(x) of Act, however, since it was deposited after due dates, no deduction under s. 36(1)(va) was allowed to assessee and accordingly Rs. 2,03,309 were added by AO to total income of assessee. assessee preferred appeal before learned CIT(A) who after considering submissions made by assessee and applicable legal provisions, confirmed action of AO. Aggrieved by decision of learned CIT(A), assessee is in appeal before us. A. learned counsel appearing on behalf of assessee contended that employer s contribution deposited after due dates but before due date of filing of return of income was allowable as deduction and for this contention, he put reliance on decision of Tribunal in case of Addl CIT vs. Vestas RRB (India) Ltd. (2005) 93 TTJ (Del) 144: (2005) 92 ITD 1 (Del). B. learned Departmental Representative, on other hand, supported orders of Revenue authorities and placed reliance on decision of Tribunal in case of Swarup Vegetable Products Industries Ltd. vs. Jt. CIT (2005) 278 ITR 206 (All) (sic) to contend that s. 43B could not be held as retrospective and, therefore, benefit of this amendment was not available to defaults in deposit of employer s contribution towards PF and ESIC for period before 1st April, 2004. We have considered rival submissions, material on record and orders o f authorities below. Admittedly, assessee has deposited employees contribution towards PF and ESIC after due date as prescribed under respective legislations. As per provisions of s. 2(24)(x) of Act employees contribution is deemed to be income of assessee and corresponding deduction is allowable under s. 36(1)(va) of Act if same is deposited within prescribed time. In our considered opinion, provisions of s. 43B are not attracted in case of employees contribution towards PF and ESIC, therefore, time-limit cannot be extended beyond due dates as prescribed in respective Act. Therefore, deduction for employees contribution deposited belatedly but before due date of filing of return cannot be allowed . In this view of matter, we hold that orders of Revenue authorities are in accordance with law and accordingly we decline to interfere. alternative ground is regarding observation of learned CIT(A) in treating employer s contribution as part of disallowance under s. 43B of Act. We find that assessee had suo rnotu disallowed employer s contribution deposited after due dates, therefore, observations of learned CIT(A) does not adversely affect assessee. Thus, alternative ground is dismissed as being infructuous. Ground No. 4 is reproduced as under: "On facts and in circumstances of case, learned CIT(A) legally erred in setting aside, subject to verification, disallowance made by AO in respect of Modvat. Without prejudice to above and in alternative, learned CIT(A) legally erred in not giving relief as sought for by appellant." Briefly stated facts of this ground are that during course of assessment proceedings, AO noted that while complying to requirements of provisions of s. 145A introduced w.e.f. 1st April, 1999, assessee adjusted value of opening stock also. AO was of opinion that s. 145A required adjustment in value of closing stock by amount of unutilised Modvat credit for purposes of determining income chargeable under head profits and gains of business/profession. In view of AO, difference worked out by assessee on opening stock at Rs. 34,33,530 was not in accordance with provisions of law and same was added to amount of adjustments determined by assessee at Rs. 7,74,711. Accordingly, total disallowance at Rs. 42,08,241 was worked out. In doing so, AO, relied on decision of Hon ble Bombay High Court in case of Melmould Corporation vs. CIT (1993) 111 CTR (Bom) 357: (1993) 202 ITR 789 (Bom). assessee being aggrieved by decision of AO, preferred appeal before learned CIT(A). In appellate proceedings, assessee drew attention of learned CIT(A) to observations of auditors in tax audit report to contend that adjustment on account of Modvat had to be made both in respect of opening stock and closing stock. It was also pointed out that for asst. yr. 1998-99 amount of Rs. 7,85,386 was added to income of appellant under Modvat provisions. learned CIT(A) after considering submissions made by assessee was of opinion that decision relied on by AO was not applicable to facts of case on hand gave relief to assessee. relevant portion of findings of learned CIT(A) is extracted below: "I have carefully considered above. working given by Authorised Representative at p. 57 of paper book does not fully explain as to how opening stock figure of Rs. 34,33,530 was arrived at and what was closing stock figure of preceding year. However, I do not agree with view of AO that no adjustment at all should be made to opening stock, while applying provision of s. 145A of Act. Moreover, Authorised Representative has stated that in preceding year addition of Rs. 7,85,386 has been made to closing stock by AO on account of Modvat. If this case, AO should have taken at least that into account while arriving at opening stock figure of this year. AO is directed to verify this position from assessment order of preceding year and make suitable adjustments. It is to be made clear that if, in appeal by appellant against that addition, it has been allowed by appellate authority, there will be no need to make adjustment. AO is also directed to verify statement filed by appellant showing adjustments on account of s. 145A. If opening stock is exclusive of Modvat credit, then it should be notionally added to arrive at figure of closing stock under s. 145A of Act." During course of hearing learned counsel appearing on behalf of t h e assessee submitted that in principle learned CIT(A) agreed with contention of assessee that value of both opening stock and closing stock had to be modified. However, learned CIT(A), with regard to addition of Rs. 7,85,386 made in earlier year in respect of closing stock of that year observed to exclude same to that extent from value of opening year observed to exclude same to that extent from value of opening stock, if addition made in earlier year was deleted by appellate authority and such observations were not warranted in view of findings of learned CIT(A) that both opening stock and closing stock were to be adjusted as per inclusive method under s. 145A. learned counsel in this regard also referred to memorandum explaining provisions in Finance (No. 2) Bill, 1998 as in (1998) 231 ITR (St) 201 to show that adjustment under s. 145A had to be made both in respect of opening and closing stock. learned counsel also referred to language employed in s. 145A to contend that if only value of closing stock had to be modified, legislature would have specifically provided for valuation of closing stock only. He also drew our attention to notes to clauses and memorandum explaining object of provision of s. 145A to contend that both referred to adjustments to be made in value of opening stock as well as closing stock. It was also contended that this was notional adjustment in value of stock, therefore, both opening and closing stock had to be notionally adjusted to arrive at correct figure of profits. learned counsel also brought to our notice fact that against order of learned CIT(A) no appeal was filed by Department, therefore, order of learned CIT(A) became final to this extent. It was also argued that construction of provisions of s. 145A so as to restrict modification to valuation of closing stock only leaving aside opening stock was not correct. learned counsel further contended that it was deeming provision for purposes of computing business income and it could have never been intention of legislature to artificially inflate profits in first year of amended provision, therefore, value of opening stock had to be necessarily modified. learned Departmental Representative, on other hand, narrated factual matrix of case and contended that only value of closing stock had to be modified by amount of unutilized amount of Modvat credit. During course of proceedings, issue of powers of Tribunal arose in sense that Tribunal could not issue any direction which might put assessee in more adverse position. In this regard, learned Departmental Representative put his k reliance on decision of Hon ble Calcutta High Court in case of C.C.A.P. Ltd. vs. CIT (2005) 193 CTR (Cal) 74: (2004) 270 ITR 248 (Cal) wherein Hon ble Court observed that it was bounden duty of Tribunal to decide issue on hand regardless of fact that in some cases benefit could accrue to either party. It was also pointed out that Tribunal was competent to issue appropriate directions to learned CIT(A) and placed his reliance on decision of Hon ble Supreme Court in case of Bhavana Chemicals Ltd. vs. CIT (1998) 149 CTR (SC) 336: (1998) 231 ITR 507 (SC) and also on decision of Ahmedabad Bench of Tribunal in case of Abhinav Finance & Leasing Co. Ltd. vs. Dy. CIT (2002) 75 TTJ (Ahd) 917: (2002) 81 ITD 339 (Ahd). It was also contended that power of learned CIT(A) was co-terminus with that of AO, therefore, matter could be remanded back to learned CIT(A) to decide issue in accordance with provisions of s. 145A of Act. learned counsel, in rejoinder, pointed out that decision of Hon ble Calcutta High Court in case of C.C.A.P. Ltd. (supra) was not applicable to facts of present case for following reasons: Hon ble Calcutta High Court had not considered language of s. 254(1), which uses word thereon . binding precedent of Supreme Court in case of Hukumchand Mills Ltd. vs. CIT (1967) 63 ITR 232 (SC) was not brought to knowledge of Hon ble High Court, wherein it has been held that powers of Tribunal are to decide points or grounds raised before it. It has been clearly laid down that Tribunal has no power of enhancement, which first appellate authority has. Hon ble Calcutta High Court had neither discussed nor distinguished contrary settled law in cases of CIT vs. Cochin Refineries Ltd. (1988) 70 CTR (Ker) 167: (1988) 173 ITR 461 (Ker) and Orissa Weavers Co-operative Spinning Mills Ltd. vs. CIT (1991) 187 ITR 646 (Ori). Hon ble High Court had also not considered or distinguished earlier decision of same High Court in case of CIT vs. Anand & Co. (1994) 207 ITR 418 (Cal). All these decisions were cited by counsel appearing before High Court as recorded on page No. 252 of decision. Without prejudice to above, in decisions of jurisdictional High Court in cases of Ciba of India Ltd. vs. CIT (1993) 114 CTR (Bom) 105: (1993) 202 ITR 1 (Bom), Pokhraj Hirachand vs. CIT (1963) 49 ITR 293 (Bom) and J.B. Greaves vs. CIT (1963) 49 ITR 107 (Bom) it had been clearly laid down that it was not open to Tribunal to adjudicate or give finding on question which was not in dispute and which do not form subject-matter of appeal before it. Without prejudice to above, Hon ble High Court nowhere laid down that Tribunal had power of enhancement. It merely stated that Tribunal should lay down correct proposition of law. It may be distinctly noted that in case Tribunal was dealing with Departmental appeal and relief was sought by assessee who was not in appeal. Therefore, there was no question of enhancement to income of assessee as relief sought would have reduced total income. Had it been case of enhancement. Hon ble Calcutta High Court would have certainly referred to provisions of s. 254 and other binding precedents, which do not permit enhancement. Without prejudice to above, facts of case are clearly distinguishable inasmuch as Hon ble High Court has considered case wherein identical facts were involved in grounds of appeal challenged before it and other part of order, which was not challenged. Whereas in present case there is remarkable distinction between addition, which has been challenged before Hon ble Tribunal by assessee and one which has become final and not challenged by Department. Whereas assessee has challenged valuation of opening stock which has not been allowed by CIT(A) on ground that in earlier year addition was made to value of closing stock which has since been deleted. As against this, other part of order deals with valuation of opening stock simplicitor, de hors valuation of closing stock of preceding year. Thus, decision to be taken in respect of assessee s appeal would not apply to other part of addition in respect of which order has become final. learned counsel further contended that issue of powers of Tribunal would come into play only when appeal was decided against assessee on merits. We have considered rival submissions, material on record and orders of authorities below. Admittedly, s. 145A as enacted by Finance (II) Act, 1998 w.e.f. asst. yr. 1999-2000 provides that valuation of purchase and sale of goods and inventory for purpose of computation of income from business or profession shall be made on basis of method of accounting regularly employed by assessee but this shall be subject to certain adjustments. Therefore, it is not necessary to change method of valuation of purchase, sale and inventory regularly employed in books of account. However, adjustments provided under s. 145A would have to be made while computing income for purpose of preparing return of income. adjustments as provided under s. 145A are as follows: (a) Any tax, duty, cess or fee actually paid or incurred on inputs should be added to cost of inputs (raw materials, stores etc.); if not already added in books of account. (b) Any tax, duty, cess or fee actually paid or incurred on sale of goods should be added to sales, if not already added in books of account. (c) Any tax, duty, cess or fee actually paid or incurred on inventory (finished goods, work-in-progress, raw materials, etc.) should be added to inventories, if not already added while valuing inventory in accounts. It is evidently clear from language of s. 145A that adjustments have to be made in respect of purchases, sale and inventory, therefore, contention of Revenue that value of closing stock only needs to be adjusted is not: in accordance with provisions of law and, therefore, same is rejected. Admittedly, this is first year applicable to provisions of s. 145A, therefore, question for consideration is whether opening stock as on 1st April, 1998 should also be adjusted as required under s. 145A. From perusal of impugned order, it can be seen that working given by Authorised Representative to learned CIT(A) at p. 57 of paper book does not explain as to how opening figure of Rs. 34,33,530 was arrived at and what was closing stock figure of preceding year. It is pertinent to know that Tribunal vide order dt. 31st Jan., 2004 in appeal pertain to asst. yr. 1998-99 vide para 24 on p. 8 restored issue of addition if any on account of Modvat credit keeping in view after ascertaining from assessee whether excise duty paid on its purchases is included in purchase shown in P&L a/c. In impugned order also, learned CIT(A) has not examined whether excise duty paid is included by assessee in purchase shown in P&L a/c. Now whether value of opening stock is required to notionally adjusted by amount of Modvat referable to such on account of insertion of s. 145A of IT Act w.e.f. 1st April, 1999 is to be decided after finding out how excise duty is accounted for by assessee in books of account. We, therefore, set aside order of learned CIT(A) on this issue and restore to file of learned CIT(A) with direction that assessee should explain working furnished before learned CIT(A) at p. 57 of paper book. After ascertaining correct position of treatment given by assessee in respect of excise duty on purchases, learned CIT(A) will adjudicate this issue afresh after giving opportunity of being heard to both sides. (A). Before parting with, with regard to change of value of opening stock if any required to be made on account of Modvat, it is essential to ensure that assessee does not get double deduction on account of this Modvat. As per provisions of s. 145A of Act, sales are also to be inclusive of Excise Duty and hence, assessee is entitled to deduction for amount of Excise Duty payable on sales but because of Modvat available to assessee on account of opening stock, purchases and closing stock and since Modvat element is added to value of opening stock and purchases as provided in s. 145A, actual deduction allowable to assessee on account of Excise Duty with regard to sales should be restricted to actual duty paid by assessee by excluding Modvat element with regard to both opening stock and purchases during year to ensure that assessee does not get any double deduction on account of Modvat in year of insertion of s. 145A of Act i.e. asst. yr. 1999-2000. learned CIT should examine this issue and to ensure that no double deduction to be granted to assessee on account of Modvat by including same in opening stock and purchases and also in excise duty payable against sales. In result, appeal filed by assessee is partly allowed for statistical purposes. *** NATIONAL PLASTIC INDUSTRIES LTD. v. INCOME TAX OFFICER