Garden Reach Shipbuilders & Engineers Ltd., Kolkata V. DCIT, CIR-1(1), KOLKATA, Kolkata

CO 38/KOL/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4006 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 10-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Section: 154

Judgement Text

1 ITA NO. 966/KOL/2015 & CO NO.38/KOL/2015 GARDEN REACH SHIP BUILDERS & ENGINEERS LTD., AY 200 7-08 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 966/KOL/2015 ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), KOLKATA. VS. M/S. GARDEN REACH SHIP BUILDERS & ENGINEERS LTD. (PAN: AAACG9371K APPELLANT RESPONDENT & C.O. NO. 38/KOL/2015 IN I.T.A. NO. 966/KOL/2015 ASSESSMENT YEAR: 2007-08 M/S. GARDEN REACH SHIP BUILDERS & ENGINEERS LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), KOLKATA. CROSS OBJECTOR RESPONDENT DATE OF HEARING 11.04.2018 DATE OF PRONOUNCEMENT 10.07.2018 FOR THE REVENUE SHRI SAURABH KUMAR, ADDL. CIT, SR. DR FOR THE ASSESSEE/CROSS OBJECTOR SHRI SANJAY BHATTACHARYA, AR ORDER PER SHRI A.T.VARKEY, JM THE APPEAL PREFERRED BY THE REVENUE AND THE CROSS O BJECTION PREFERRED BY THE ASSESSEE ARE AGAINST THE ORDER OF THE LD. CIT(A)-23 , KOLKATA DATED 22.04.2015 FOR AY 2007- 08. 2. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE DIRECTION OF LD. CIT(A) TO INCREASE THE OPENING STOCK OF THE ASSESSEE FOR AY 2007-08, T AKING INTO CONSIDERATION THE FACT THAT AO HAS ORDERED INCREASE IN CLOSING STOCK TO THE TUNE O F RS.1,57,22,000/- FOR AY 2006-07. 2 ITA NO. 966/KOL/2015 & CO NO.38/KOL/2015 GARDEN REACH SHIP BUILDERS & ENGINEERS LTD., AY 200 7-08 3. BRIEFLY STATED FACTS ARE THAT FOR THE ASSESSMENT YEAR 2007-08 THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.10.2007 DECLARING A TOTAL IN COME OF RS.175,63,80,640/-. THE A.O. ISSUED AN INTIMATION U/S.143(1) OF THE INCOME-TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 02.02.2009. BEFORE THE ISSUE OF THE AB OVE REFERRED INTIMATION DATED 02.02.2009 THE A.O. HAD MADE THE ASSESSMENT FOR THE PRECEDING ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 29.10.2008 PASSED U/S.143(3) OF THE ACT. IN T HE ABOVEMENTIONED ASSESSMENT ORDER DATED 29.10.2008 THE A.O. INCREASED THE VALUE OF TH E CLOSING STOCK FOR THE ASSESSMENT YEAR 2006-07 BY A SUM OF RS.1,57,22.000/-. IT WAS NOTICE D BY THE ASSESSEE THAT THE A.O. HAD NOT INCREASED THE VALUE OF THE OPENING STOCK FOR THE IM MEDIATE FOLLOWING ASSESSMENT YEAR 2007- 08 BY RS.1,57,22,000/-, SO THE ASSESSEE FILED A PET ITION U/S.154 OF THE ACT DATED 18.02.2011 PRAYING BEFORE THE A.O.TO RECTIFY THE ORDER U/S.154 OF THE ACT BY INCREASING THE VALUE OF THE OPENING STOCK FOR THE ASSESSMENT 2007-08 BY A SUM O F RS.1,57,22,000/-. THE AO REJECTED THE SEC. 154 APPLICATION BY OBSERVING AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A . Y.2006-07, RS. 157.22 LAKHS WAS ADDED IN THE CLOSING STOCK BUT THE CORRESPONDING AMOUNT I S TO BE INCREASED IN THE OPENING STOCK FOR THE A. Y.2007-08. BUT YOUR CONTENTION CAN NOT BE ME T UP BY PROCEEDINGS U/S.154 OF THE INCOME TAX ACT, 1961. HENCE, THE RECTIFICATION PETITION U /S.154 FILED BY YOU IS HEREBY REJECTED. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE LD. CIT(A) WHO WAS PLEASED TO ALLOW THE APPEAL BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT FOR INCREASING THE VALUE OF OPENING STOCK OF THE SUCCEEDING YEAR BY THE AMOUNT OF INCREASE MADE IN THE VALUE OF CLOSING STOCK OF THE PRECEDING YEAR BY THE A.O. THE A.O. HA S REJECTED THE RECTIFICATION PETITION FILED BY THE APPELLANT ON THE GROUND THAT SUCH CONTENTION OF THE APPELLANT CANNOT BE MET UP U/S.154 OF THE INCOME TAX ACT, 1961.THE APPELLANT HAS FURTHER RELIED UPON THE JUDGEMENT OF THE APEX COURT IN THIS REGARD. IN VIEW OF THE FACT THAT THER E HAS BEEN INCREASE IN THE CLOSING STOCK OF THE PRECEDING YEAR BY THE A.O., THE OPENING STOCK OF TH E SUCCEEDING YEAR WOULD BE INCREASED BY THAT AMOUNT. THIS CONTENTION OF THE APPELLANT IS CO RRECT AND THE A.O. IS DIRECTED TO GIVE EFFECT TO THAT EXTENT. FURTHER, IN VIEW OF THE FACT THAT T HE OPENING STOCK IS INCREASED TO THAT EXTENT THE CLOSING STOCK OF THE FINANCIAL IT MAY ALSO REQUIRE ENHANCEMENT OR INCREASE IN THE CLOSING STOCK OF THE SUCCEEDING YEAR I.E. A.Y.2007-08YEAR CORRESP ONDING TO THE ASSESSMENT YEAR 2007-08 IS ALSO REQUIRED TO BE LOOKED INTO AND. THUS, THE A.O. IS DIRECTED TO VERIFY THIS ASPECT ALSO AND GIVE CONSEQUENTIAL EFFECT TO THE CLOSING STOCK OF T HIS FINANCIAL YEAR PERTAINING TO ASSESSMENT YEAR 2007-08 AFTER GIVING DUE OPPORTUNITY TO THE APPELLANT. 5. AGGRIEVED, THE REVENUE IS BEFORE US. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO FOR AY 2006-07 ORDERED I NCREASE IN CLOSING STOCK TO THE TUNE OF RS.1,57,22,000/- BY ORDER DATED 29.10.2008. SO, AO WAS AWARE THAT HIS SAID ORDER WILL HAVE 3 ITA NO. 966/KOL/2015 & CO NO.38/KOL/2015 GARDEN REACH SHIP BUILDERS & ENGINEERS LTD., AY 200 7-08 IMPACT ON THE OPENING STOCK FOR AY 2006-07 AND THA T THE OPENING STOCK NEED TO BE INCREASED BY RS.1,57,22,000/-. SO, WHEN THE RETURN OF ASSESSEE WAS PROCESSED U/S. 143(1) OF THE ACT AND AN INTIMATION TO THE ASSESSEE WAS GIVEN ON 02.02.2009, THE DEPARTMENT WAS AWARE OF THE ASSESSMENT ORDER PASSED ON 29.10.2008. SO, WHEN THE CLOSING STOCK OF ASSESSEE GOT INCREASED FOR AY 2006-07, SO THE OPENING STOCK HAS TO BE INCREASED BY THAT AMOUNT OF RS.1,57,22,000/-. SO, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND THE DIRECTION OF LD. CIT(A) IS JUSTIFIED IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND TAKES CARE OF THE REVENUES INTEREST TOO, SO NO INTERFERENCE IS REQUI RED FROM OUR PART. THEREFORE, WE CONFIRM THE ORDER OF LD. CIT(A). REVENUES APPEAL IS, THERE FORE, DISMISSED. 5. COMING TO THE ASSESSEES CROSS OBJECTION, WE NOT E THAT IT IS SUPPORTING THE DECISION OF THE LD. CIT(A), SO THE CROSS OBJECTION OF ASSESS EE IS DISMISSED. 6 IN THE RESULT, THE APPEAL OF REVENUE AS WELL AS T HE CROSS OBJECTION OF ASSESSEE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10/07/201 8 SD/- SD/- (J. SUDHAKAR REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10TH JULY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT DEPUTY COMMISSIONER OF INCOME-TAX, CIRC LE-1(1), KOLKATA. 2 RESPONDENT M/S. GARDEN REACH SHIP BUILDERS & ENGI NEERS LTD., 43/46, GARDEN REACH ROAD, KOLKATA-700 024. 3 4 5 CIT(A)- 23, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY