The Dy. Cit Baroda Circle I, Baroda V. Gujarat Alkalies & Chemicals Ltd, Baroda

ITA 1090/AHD/2003

• Counselvise Citation: 109020514 RSA 2003
• Duration Of Justice: 9 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-06-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 20-03-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGH
• Assessee Lawyers: M J SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI G.C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 1090/ AHD/2003 (ASSESSMENT YEAR 1998-99) DCIT, CIRCLE I, BARODA VS. GUJARAT ALKALIES & CHEMICALS LTD., P.O. PETROCHEMICALS, DISTT. BARODA-391346 PAN/GIR NO. : - (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI KARTAR SINGH, CIT DR RESPONDENT BY: SHRI M J SHAH, AR DATE OF HEARING: 26.06.2012 DATE OF PRONOUNCEMENT: 06.07.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A) BARODA DATED 31.12.2002 FOR THE ASSESSMENT YEAR 1998-99. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED CIT(A)-I, BARODA HAS ERRED IN (I) DELETING THE DISALLOWANCE OF INTEREST AND CO MMITMENT CHARGES OF RS.67,33,15,160/- RELYING ON THE DECISION OF THE / ITAT IN ASSESSEE'S OWN CASE FOR A.Y. 95-96 WHERE THE ITAT / WAS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT WAS REVENUE I EXPENDITURE ALLOWABLE U/S 36(IXIII) OF THE ACT DISREGARDING TH E CLEAR PROVISIONS OF SECTION 43(1) EXPL.(8) OF THE ACT. (II) DELETING THE DISALLOWANCE OF RS.1,42,72,000/- ON ACCOUNT OF VALUATION OF CLOSING STOCK OF FINISHED GOODS. THE E XCISE DUTY SHOULD BE CONSIDERED AS MANUFACTURING EXPENSES AND AN ELEMENT OF COST, FOR INVENTORY VALUATION. THE EXCISE DUTY PAYA BLE ON FINISHED GOODS SHOULD BE INCLUDED IN THE COST. THIS VIEW IS ALSO EXPRESSED I.T.A.NO. 1090 /AHD/2003 2 BY THE INSTITUTE OF C.A.'S GUIDELINES COVERED IN IN STRUCTION NO. 1389 DATED 24.03.81 ISSUED BY CBDT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THAT THE LEARNED CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). HE FURTHER SUBM ITTED THAT THE ISSUE INVOLVED IN GROUND NO.1 REGARDING DISALLOWANCE OF I NTEREST AND COMMITMENT CHARGES OF RS.67,33,15,160/- IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT REN DERED IN THE ASSESSEES OWN CASE AS REPORTED IN 299 ITR 85. REG ARDING THE 2 ND ISSUE I.E. REGARDING DISALLOWANCE OF RS.1,42,72,000/- ON ACCOUNT OF VALUATION OF CLOSING STOCK OF FINISHED GOODS, IT WAS SUBMITTED T HAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONB LE GUJARAT HIGH COURT RENDERED IN THE CASE OF ACIT VS NARMADA CHEMATUR PE TROCHEMICALS LTD. AS REPORTED IN 327 ITR 369. 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENTS CITED BY THE LD. A.R. OF THE ASSESSEE. WE FIND THAT LD. CIT(A) HAS DECIDED THE FIRST ISSUE AS PER PARA 5.2 OF HIS ORDER BY FOLLOWING THE TRIBUNAL DECISION IN ASSESSEES OWN C ASE FOR THE ASSESSMENT YEAR 1994-95, 1995-96 AND 1996-97. NO CONTRARY DEC ISION HAS BEEN CITED BY THE LD. D.R. IN FACT, IT HAS BEEN SUBMITTED BY THE LD. A.R. THAT NOW, THIS ISSUE IS COVERED BY THE JUDGMENT OF HONBLE AP EX COURT RENDERED IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS CI TED ABOVE. THE 2 ND ISSUE HAS BEEN DECIDED BY LD. CIT(A) AS PER PARA 6. 2 OF HIS ORDER BY FOLLOWING HIS OWN ORDER IN ASSESSEES ONE CASE FOR ASSESSMENT YEAR 1997- 98. NOTHING HAS BEEN BROUGHT ON RECORD BY THE LD. D.R. THAT THIS ORDER OF LD. CIT(A) IN ASSESSMENT YEAR 1997-98 HAS BEEN REVE RSED BY THE I.T.A.NO. 1090 /AHD/2003 3 TRIBUNAL. THIS ISSUE HAS BEEN DECIDED BY HONBLE G UJARAT HIGH COURT ALSO IN FAVOUR OF THE ASSESSEE IN THE CASE OF ACIT VS NARMADA CHEMATUR PETROCHEMICALS LTD.(SUPRA). IN THAT CASE, IT WAS H ELD BY HONBLE GUJARAT HIGH COURT THAT THE ASSESSMENT YEAR BEING 1997-98, PROVISIONS OF SECTION 145A OF THE INCOME TAX ACT, 1961 INSERTED BY THE FI NANCE (NO.2) ACT 1998 W.E.F. APRIL 1, 1999, COULD NOT BE INVOKED. I N THE PRESENT CASE, THE ASSESSMENT YEAR INVOLVED IN ASSESSMENT YEAR 1998-99 AND THEREFORE, IN THE PRESENT CASE ALSO, THE PROVISIONS OF SECTION 14 5A CANNOT BE INVOKED. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN TH E ORDER OF LD. CIT(A). 4. REGARDING THE FIRST ISSUE, WE FIND THAT LD. CIT( A) HAS FOLLOWED THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR THREE EARLIER YEARS I.E. ASSESSMENT YEARS 1994-95, 1995-96 AND 1996-97 AND N OTHING HAS BEEN BROUGHT ON RECORD BY LD. D.R. THAT THESE TRIBUNAL D ECISIONS HAVE BEEN REVERSED BY THE HONBLE GUJARAT HIGH COURT. IN FAC T, THE SAME ISSUE HAS BEEN DECIDED BY HONBLE GUJARAT HIGH COURT ALSO IN FAVOUR OF THE ASSESSEE AND THEREAFTER, THE MATTER WAS TAKEN TO HO NBLE APEX COURT ALSO BY THE REVENUE AND THE HONBLE APEX COURT ALSO DECI DED THE ISSUE IN FAVOUR OF THE ASSESSEE AS PER THE JUDGEMENT CITED B Y THE LD. A.R. HAVING BEEN REPORTED AT 299 ITR 85. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THE FIRST I SSUE ALSO. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP I.T.A.NO. 1090 /AHD/2003 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 27/6 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/6.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.4/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.6/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 06/07/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .