The DCIT, Circle-1, Ahmedabad V. M/s. AIA Engineering Ltd., Ahmedabad

ITA 1122/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8495 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 01-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: T P HEMANI
• Section: 143(3)

Judgement Text

ITA NO. 1122/AHD/2015 DCIT VS. AIA ENGINEERING LTD ASSESSMENT YEAR: 2006-07 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 1122/AHD/2015 ASSESSMENT YEAR: 2006-07 DCIT .............APPELLANT CIRCLE 1 (1)(1) AHMEDABAD VS. M/S. AIA ENGINEERING LTD .......................RESPONDENT 115, GVMM ESTATE, ODHAV ROAD, ODHAV, AHMEDABAD 382 410 [PAN : AABCA 2777 J] APPEARANCES BY: VK SINGH FOR THE APPELLANT TP HEMANI FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 25.09.2017 DATE OF PRONOUNCING THE ORDER : 26.09.2017 ORDER PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF ORDER OF LEARNED CIT(A)-1, AHMEDABAD DATED 09.01.2015, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 263 OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2006-07. 2. GRIEVANCE RAISED IN THE APPEAL IS AS FOLLOWS:- THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,15,69,034/- MADE ON ACCOUNT OF DISALLOWANCE OF UNUTILIZED CENVAT CREDIT DESPITE THE FACT THAT THE ASSESSEE HAD FOLLOWED EXCLUSIVE METHOD OF ACCOUNTING IN CONTRAVENTION OF THE PROVISIONS OF SECTION 145A. 3. AT THE TIME OF HEARING BEFORE US, LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE ABOVE GRIEVANCE IS COVERED, IN FAVOUR OF THE ASSESSEE, BY THE DECISION DATED 31.08.2016 OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS. MAMATA BRAMPTON ENGG. PVT. LTD. IN ITA NO.2387/AHD/2013 FOR ASSESSMENT YEAR 2008-09 WHEREIN THE TRIBUNAL HAS, INTER ALIA, OBSERVED AS FOLLOWS:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE ADDITION OF UNUTILISED CENVAT CREDIT TO THE CLOSING STOCK. WE FIND THAT THE LD.CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF ITA NO. 1122/AHD/2015 DCIT VS. AIA ENGINEERING LTD ASSESSMENT YEAR: 2006-07 PAGE 2 OF 2 ASSESSEE HAS GIVEN A FINDING THAT ASSESSEE IS FOLLOWING EXCLUSIVE METHOD OF ACCOUNTING WHEREBY THE EXCISE DUTY IS NOT INCLUDED IN THE VALUATION OF STOCK AND RAW-MATERIALS AS THE EXCISE DUTY PAID AND COLLECTED IS NOT MADE PART AND PARCEL OF THE PROFIT & LOSS A/C. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTION 145A OF THE ACT AND THE EFFECT OF INCLUDING EXCISE DUTY IN VALUATION OF CLOSING STOCK DOES NOT AFFECT THE PROFIT AND IS REVENUE NEUTRAL. HE HAS FURTHER RELIED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF NARMADA CHEMATUR PETROCHEMICALS LTD.(SUPRA). BEFORE US, REVENUE HAS NEITHER CONTROVERTED THE FINDING OF LD.CIT(A) NOR HAS PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. WE FURTHER FIND THAT THE HON'BLE APEX COURT IN THE CASE OF INDO NIPPO CHEMICALS (2003) 261 ITR 375 HAS HELD THAT UNAVAILED MODVAT CREDIT CANNOT BE CONSTRUED AS INCOME AND THERE IS NO LIABILITY TO PAY TAX ON SUCH UNAVAILED MODVAT CREDIT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 4. WE SEE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. RESPECTFULLY FOLLOWING THE SAME, WE SEE NO REASONS TO INTERFERE IN THE CONCLUSIONS ARRIVED AT BY TH E LD. CIT(A). ACCORDINGLY, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 26 TH DAY OF SEPTEMBER, 2017. SD/- SD/- S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 26 TH DAY OF SEPTEMBER, 2017 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ........26.09.2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER: ... 26.09.2017........ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: 26.09.2017....... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: .. 26.09.2017....... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .. 27.09.2017.... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: ..