The ACIT, Baroda Circle -4, Baroda V. Sayaji Iron &Engg. Co.Ltd., Baroda

ITA 1330/AHD/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0390 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-11-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 06-05-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: Set aside
• Section: 43B; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING: 26.11.09 DRAFTED ON: 30.11.09 ITA NO.1330/AHD/2005 ASSESSMENT YEAR : 2001-02 ASSTT. COMMISSIONER OF INCOME TAX, BARODA CIR.4, BARODA. VS. SAYAJI IRON & ENGG. CO. LTD. CHHANI ROAD, BARODA. PAN/GIR NO. : AACCS 5491 A (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT SR. D.R. RESPONDENT BY: SHRI VIJAY SHAH O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF CIT(APPEALS)- III, BARODA, DATED 22.02.2005 IN APPEAL NO.CAB/III/ 113/2004-05. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION OF RS.7,01,245/- ON ACCOUNT OF EXCISE DUTY ON CLOSING STOCK OF FINISHED GOODS CONSIDERING THE SAME TO HAVE BEEN PAID AS PER PROVI SIONS OF SECTION 43B R.W.S. 145A OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HELD AS UNDER:- 2.2. I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANT AND THE FACTS OF THE CASE. IN VIEW OF THE DECISION OF MCDOWELL CO.LTD. V . CIT 154 ITR 148 (SC), ITA NO .1330/AHD/2005 M/S.SAYAJI IRON & ENGG. CO. LTD. ASST.YEAR -2001-02 - 2 - RELIED UPON THE A.O AND PROVISIONS OF SECTION 145A WITH EFFECT FROM 1.4.1999, DUTY PAYABLE ON FINISHED GOODS WILL HAVE TO BE ADDED TO THE VALUE OF FINISHED STOCK. A PERUSAL OF THE DETAILS FILED R EVEALS THAT CLOSING STOCK OF RS.12,35,969/- (RS. 60,741/- + RS. 58,778/- + RS. 1 ,19,519/- + RS. 3,57,334/- + 71,846/- + RS. 1,86,038/- + RS. 3,81,713/-) IS STIL L LAYING AS FINISHED STOCK WITH THE APPELLANT AT THE TIME OF FILING OF RETURN AND T HIS STOCK WAS SOLD BEFORE THE RETURN WAS FILED. AS STOCK OF RS.12,35,969/- IS NOT SOLD BEFORE THE RETURN OF INCOME, DUTY OF RS.1,97,755/- BEING 16% OF STOCK WI LL HAVE TO BE INCLUDED IN THE VALUE OF CLOSING STOCK OF FINISHED GOODS. ON ST OCK OF RS.24,01,432/-, DUTY AMOUNT CANNOT BE INCLUDED BECAUSE THIS STOCK HAS BE EN SOLD BEFORE FILING OF RETURN OF INCOME AND DEDUCTION UNDER SECTION 43B WI LL BE AVAILABLE IN RESPECT OF THE DUTY AMOUNT. AS REGARDS FINISHED GO ODS OF SPARES, IT IS SEEN THAT ENTIRE GOODS WERE SOLD BEFORE FILING OF RETURN AND HENCE FULL AMOUNT OF EXCISE DUTY CAN BE ALLOWED AS DEDUCTION UNDER SECTI ON 43B. ACCORDINGLY, ADDITION ON ACCOUNT OF EXCISE DUTY, WHICH IS INCLUD ABLE IN THE VALUE OF UNSOLD FINISHED STOCK OF RS.12,35,969/- OF EQUIPMENTS ONLY COMES TO RS.1,97,755/-. THEREFORE, ADDITION ON ACCOUNT OF EXCISE DUTY NOT I NCLUDED IN THE CLOSING STOCK IS TO BE RESTRICTED TO RS.1,97,755/-. THE A.O . IS THEREFORE, DIRECTED TO RESTRICT THE ADDITION TO RS.1,97,755/-. 4. WE FIND THAT AS PER THE PROVISIONS OF SECTION 43 B, THE AMOUNT OF TAX DUTY ETC., WHICH IS ACTUALLY PAID ON OR BEFORE THE DUE D ATE OF FURNISHING OF RETURN UNDER SECTION 139(1) IS ONLY ALLOWABLE AS DEDUCTION TO TH E ASSESSEE IN THE RELEVANT YEAR. IN THE INSTANT CASE, THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS) CONSIDERING THE FACT THAT GOODS RELATING TO EXCISE DUTY OF RS.7,01,245/- WAS SOLD BY THE ASSESSEE PRIOR TO THE DUE DATE OF FILING OF RETURN OF INCOME AND THEREFORE, DIRECTED TO ALLOW DEDUCTION THEREOF. THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE EXCISE DUTY RELATING TO THE AFORESAID SALE BEFORE THE DUE DATE WAS ALSO ACTUALLY PAID BEFORE THE SAID DUE DATE. WE THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF THE LEARNED ASSESSING ITA NO .1330/AHD/2005 M/S.SAYAJI IRON & ENGG. CO. LTD. ASST.YEAR -2001-02 - 3 - OFFICER FOR VERIFICATION OF THE ACTUAL AMOUNT OF EX CISE DUTY PAID TO THE GOVERNMENT ON OR BEFORE THE DUE DATE OF FURNISHING OF THE RETURN OF INCOME AND ALLOW DEDUCTION IN RESPECT OF ACTUAL PAYMENT IN ACC ORDANCE WITH THE PROVISIONS OF SECTION 43B OF THE ACT. NEEDLESS TO MENTION THAT RE ASONABLE OPPORTUNITY OF HEARING SHALL BE ALLOWED TO THE ASSESSEE BEFORE ADJ UDICATING THE ISSUE AFRESH AS PER LAW. 4. THUS, THE APPEAL OF REVENUE IS ALLOWED FOR STATI STICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/11/2009. SD/- SD/- ( T.K. SHARMA ) ( N.S. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 30/11/2009 PREPARED AND COMPARED BY : PARAS # COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-III, BARODA 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD