Adani Gas Ltd, Ahmedabad V. The Dy.CIT.,Circle-1, Ahmedabad

ITA 1382/AHD/2013

• Counselvise Citation: 138220514 RSA 2013
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Keywords: Depreciation; Rectification of order; Corroborative evidences; Assessment record; Revenue expenditure; Capital expenditure
• Section: 43B; 143(3); 142(1); 32; 145; 263; 63

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH, AHMEDABAD , . .. . . .. . , , , , '# ' $ '# ' $ '# ' $ '# ' $ BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.1382/AHD/2013 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR : 2008-09) ADANI GAS LTD. 1, ADANI HOUSE NR.MIOTHAKHALI SIX ROADS NAVRANGPURA AHMEDABAD-380 009 & & & & / VS. DY.CIT CIRCLE-(1) AHMEDABAD ) '# ./*+ ./ PAN/GIR NO. : AAFCA 3788 D ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / ' / APPELLANT BY : SHRI S.N.SOPARKAR WITH SHRI VARTIK CHOKSHI, ARS -.), 0 / ' / RESPONDENT BY : SHRI T.P.KRISHNAKUMAR,CIT-DR &1 0 # / / / / DATE OF HEARING : 05/12/2013 23( 0 # / DATE OF PRONOUNCEMENT : 09/01/2014 '4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX, AHMEDABAD-1(CIT FO R SHORT) DATED 18/03/2013 PERTAINING TO ASSESSMENT YEAR (AY) 2008- 09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- GROUNDS OF APPEAL (WITHOUT PREJUDICE TO EACH OTHER) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN ASSUMING HIS JURISDICTION U/S.263 OF THE I .T.ACT, WHEREAS THE MANDATORY CONDITIONS FOR ASSUMING SUCH JURISDICTION ARE TOTALLY ABSENT, WITH THE RESULT THAT THE IMPUGNED ORDER PAS SED U/S.263 IS BAD IN LAW. ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 2 - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN ARRIVING AT A CONCLUSION WITHOUT ANY BASIS WHATSOEVER TO THE EFFECT THAT THE ASSESSMENT ORDER PASSED BY THE ASSE SSING OFFICER WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN CANCELLING THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 15 TH DECEMBER, 2010 U/S.143(3) OF THE I.T. ACT AND DIRECTING THE ASSESSING OFFICER TO MAKE A FRESH ASS ESSMENT. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DU RING THE COURSE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS TH E ACT) WAS FRAMED VIDE ORDER DATED 28/12/2010, THEREBY THE ASSESSING OFFICER(AO) MADE DISALLOWANCE U/S.35D OF THE ACT AMOUNTING TO RS.10, 28,028/- AND ASSESSED TOTAL INCOME AT RS.10,04,39,172/- AGAINST THE TOTAL INCOME AS DISCLOSED IN THE RETURN OF INCOME OF RS.9,09,73,050 /-. SUBSEQUENTLY, THE LD.CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FOLLOWED EXCLUSIVE METHOD FOR VALUATION OF PURCHASE/SALE OF GOODS AND INVENTORY IN CONTRAVENTI ON OF PROVISIONS OF SECTION 145A OF THE INCOME-TAX ACT, 1961. THIS HAS RESULTED IN UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.182.36 LAK HS (NET OF OPENING AND CLOSING BALANCE OF UNUTILIZED CENVAT CREDIT OF RS.677.43 LAKHS AND RS.759.78 LAKHS RESPECTIVELY. A NOTICE TO THIS EF FECT WAS ISSUED CALLING UPON THE ASSESSEE AS TO WHY APPROPRIATE ORDER U/S.2 63(1) OF THE ACT BE NOT PASSED. IN RESPONSE THERETO, THE ASSESSEE MA DE DETAILED SUBMISSIONS AS FORMING PART OF THE STATEMENT OF FACTS IN THIS A PPEAL. THE LD.CIT, HOWEVER, DID NOT ACCEPT THE SUBMISSIONS MADE BY THE ASSESSEE AND, THEREFORE, THE ORDER U/S.143(3) PERTAINING TO AY 2 008-09 PASSED BY THE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 3 - DCIT CIRCLE-1 VIDE HIS ORDER DATED 15.12.2010 WAS C ANCELLED AND THE AO WAS DIRECTED TO MAKE A FRESH ASSESSMENT IN ACCORDAN CE WITH LAW. THE LD.COUNSEL FOR THE ASSESSEE SHRI S.N.SOPARKAR SUBMI TTED THAT THE ACTION OF THE LD.CIT IS CONTRARY TO THE LAW. HE REITERATED T HE SUBMISSIONS AS WERE MADE BEFORE THE LD.CIT. HE ALSO SUBMITTED THAT EX- FACIE, THERE IS NO VIOLATION OF SECTION 145A OF THE ACT. HE SUBMITTED THAT AS PER THE MANDATE OF CLAUSE(A)(II) OF SECTION 145A, THE VALUA TION OF INVENTORY IS TO BE ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, ETC. ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION. THE IMPORT ANT WORDS ARE ACTUALLY PAID OR INCURRED. THUS, THE QUESTION OF INCLUSION OF DUTY, ETC. WOULD ARISE ONLY WHEN IT IS ACTUALLY PAID OR THE LI ABILITY FOR PAYMENT IS INCURRED. HE PLACED RELIANCE ON THE DECISION OF HO NBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. LOKNETE BALASAHEB DESA I S.S.K. LTD. REPORTED AT 339 ITR 288. HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT RENDERED IN THE C ASE OF ACIT VS. D&H SECHERON ELECTRODES (P.) LTD. REPORTED AT (2008 ) 173 TAXMAN 188 (MP). RELIANCE HAS ALSO BEEN PLACED ON THE DECISI ON OF HONBLE COORDINATE BENCH (ITAT ALLAHABAD BENCH) RENDERED IN THE CASE OF SHYAM BIRI WORKS LTD. VS. ACIT REPORTED AT (2007) 108 ITD 489 (ALL.). 3. ON THE CONTRARY, LD.CIT-DR PLACED RELIANCE ON TH E ORDER OF THE LD.CIT AND THE DECISION OF HONBLE COORDINATE BENCH (ITAT B BENCH AHMEDABAD) RENDERED IN THE CASE OF RATNESH METAL IN DUSTRIES VS. CIT IN ITA NOS.529 & 530/AHD/2012 FOR AYS 2007-08 & 2008-0 9, DATED 15/03/2013. ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 4 - 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS RELIED UPON BY BOTH THE PA RTIES. IN THE PRESENT CASE, THE LD.CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AND ISSUED SHOW-CAUSE NOTICE DATED 22/02/2013, WHICH IS REPRODUCED HEREUNDER:- NO.CIT-1/ABD/U/S 263/AGL/2012-13 DATED 22/ 02/2013 TO ADANI GAS LTD., 1, ADANI HOUSE, NR.MITHAKHALI SIX ROAD NAVRANGPURA,AHMEDABAD (PAN AAFCA 3788D) SUB : INITIATION OF PROCEEDINGS UNDER SECTION 263 OF THE IT ACT ADANI GAS LTD., A.Y. 2008-09 REGARDING. THE UNDERSIGNED, HAVING CALLED FOR AND EXAMINED THE ASSESSMENT RECORDS FOR A.Y. 2008-09, CONSIDERS THAT THE ASSESS MENT COMPLETED UNDER SECTION 143(3) OF THE I.T.ACT, 1961 ON 15-12- 2010 DETERMINING TOTAL INCOME FOR S.21,93,012/- BY THE DCIT, CIRCLE- 1, AHMEDABAD IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE ON THE FOLLOWING GROUNDS:- THE ASSESSEE HAS FOLLOWED EXCLUSIVE METHOD FOR VAL UATION OF PURCHASE/SALE OF GOODS AND INVENTORY IN CONTRAVENTI ON OF PROVISIONS OF SECTION 145A OF THE INCOME-TAX ACT, 1 961. THIS HAS RESULTED IN UNDER ASSESSMENT OF INCOME TO THE EXTEN T OF RS.182.36 LAKHS (NET OF OPENING AND CLOSING BALANCE OF UNUTIL IZED CENVAT CREDIT OF RS.577.43 LAKHS AND 759.78 LAKHS RESPECTI VELY). 2. IN VIEW OF THE ABOVE, IT APPEARS TO THE UNDERSIG NED THAT THE ORDER DATED 15-12-2010 PASSED UNDER SECTION 143(3) OF THE I.T.ACT, 1961 BY THE DCIT, CIRCLE-1, AHMEDABAD IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF REVENUE WITHIN THE MEANING OF SECTION 2 63(1) OF THE I.T.ACT, 1961. ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 5 - 13. YOU ARE, THEREFORE, REQUESTED TO SHOW CAUSE AS TO WHY APPROPRIATE ORDER UNDER SECTION 263(1) OF THE I.T.ACT, 1961 BE NOT PASSED IN YOUR CASE TO ELIMINATE THE ABOVE ERROR. FOR THIS PURPOS E, THE HEARING IN YOUR CASE IS FIXED ON 11/03/2013 AT 03.30 P.M. AT THE AB OVE ADDRESS. YOU MAY ATTEND PERSONALLY OR THROUGH AN AUTHORIZED REPR ESENTATIVE ON THE SCHEDULED DATE AND TIME OR SUBMIT YOUR WRITTEN REPL Y WITH SUPPORTING EVIDENCES. IN CASE NOTHING IS HEARD FROM YOU BY TH E SAID DATE, IT SHALL BE PRESUMED THAT YOU HAVE NOTHING TO STATE IN THIS MATTER WHICH SHALL THEN BE DECIDED ON MERITS. (KRISHNA SAINI) COMMISSIONER OF INCOME-TAX AHMEDABAD-1, AHMEDABAD 4.1. THE ASSESSEE IN RESPONSE THERETO, MADE DETAILE D SUBMISSIONS AS ENCLOSED IN THE PAPER-BOOK AT PAGES 3 TO 26. THE S UBMISSIONS MADE BEFORE LD.CIT(A) ARE ALSO REITERATED BEFORE US. TH E SUBMISSIONS ARE ALSO FORMING PART OF THE STATEMENT OF FACTS-CUM-SYNOPSIS , WHICH ARE IN THE FOLLOWING MANNER:- STATEMENT OF FACTS-CUM-SYNOPSIS 1. THE RELEVANT FACTS LEADING TO PASSING OF THE IMPUGN ED ORDER U/S.263 BY THE CIT, AHMEDABAD-1 ARE THAT THE ORIGINAL ASSESSMENT WAS MA DE BY THE DCIT, CIRCLE-1, AHMEDABAD AFTER THOROUGH SCRUTINY U/S.!43(3) OF THE I.T. ACT VIDE HIS ORDER DATED 15.12.2010. SUBSEQUENTLY, THE LEARNED CIT-I ISSUED A SHOW CAUSE NOTICE DATED 22.2.2013 CALLING UPON THE ASSESSEE-COMPANY TO EXPL AIN AS TO WHY THE SAID ASSESSMENT ORDER BE NOT TREATED AS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF THE REVENUE AS PER THE PROVISIONS OF SECTION 263 OF THE I.T. ACT ON THE FOLLOWING GROUND: THE ASSESSEE HAS FOLLOWED EXCLUSIVE METHOD FOR VAL UATION OF PURCHASE/SALE OF GOODS AND INVENTORY IN CONTRAVENTION OF PROVISIO NS OF SECTION 145A OF THE INCOME-TAX ACT, 1961. THIS HAS RESULTED IN UNDER AS SESSMENT OF INCOME TO THE EXTENT OF RS.182.36 LAKHS (NET OF OPENING AND CLOSI NG BALANCE OF UNUTILIZED CENVAT CREDIT OF RS.677.43 LAKHS AND RS.759.78 LAKH S RESPECTIVELY).' 2. THE ASSESSEE-COMPANY FILED A DETAILED REP LY DATED 18.3.2013 WHEREIN THE LEARNED CIT WAS INFORMED THAT THE FIGURES MENTIONED IN THE AFORESAID SHOW CAUSE NOTICE HAVE BEEN TAKEN FROM ANNEXURE-IX OF THE AUDI TED ACCOUNTS. IT WAS POINTED OUT THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUS INESS OF SALES/SUPPLIES OF PIPED NATURAL GAS (PNG) AND COMPRESSED NATURAL GAS (CNG). IT WAS CLARIFIED THAT EXCISE DUTY IS NOT LEVIABLE ON PNG AS PER THE PROVI SIONS OF THE CENTRAL EXCISE ACT AND A COPY OF THE EXEMPTION NOTIFICATION WAS ALSO F URNISHED TO THE LEARNED CIT. THE LEARNED CIT WAS ALSO INFORMED THAT INSOFAR AS C NG WAS CONCERNED, THE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 6 - CLOSING STOCK DOES NOT INCLUDE EXCISE DUTY AS PER T HE CONSISTENT METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE-COMPANY AND THI S METHOD IS NOT IN CONTRAVENTION OF THE PROVISIONS OF SECTION 145A OF THE I.T. ACT. IT WAS SUBMITTED BEFORE THE LEARNED CIT THAT EXCISE DUTY ACCRUES OR BECOMES PAYABLE ONLY WHEN THE CNG IS SUPPLIED TO THE CUSTOMERS I.E. WHEN THE GOOD S ARE CLEARED FOR CONSUMPTION. ACCORDINGLY, IT WAS POINTED OUT THAT LIABILITY FOR PAYMENT OF EXCISE DUTY DOES NOT ARISE ON THE CLOSING STOCK OF CNG WHICH HAS NOT BEE N CLEARED FOR CONSUMPTION. THUS, THE OPENING STOCK AND CLOSING STOCK OF CNG WE RE VALUED WITHOUT ADDING THE COMPONENT OF EXCISE DUTY. THIS METHOD ADOPTED WAS I N CONSONANCE WITH THE MANDATE OF SECTION 145A WHICH IS REPRODUCED BELOW F OR READY REFERENCE: '145A. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 145, (A) THE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSES OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' SHALL BE (I) IN ACCORDANCE WITH THE METHOD OF ACCOUNTIN G REGULARLY EMPLOYED BY THE ASSESSEE; AND (II) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, DUTY, CESS OR FEE (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF JTS LOCATION AND CONDITION AS ON THE DATE OF VALUATION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION, AN Y TAX, DUTY, CESS OR FEE (BY WHATEVER NAME CALLED) UNDER ANY LAW FOR THE TIM E BEING IN FORCE, SHALL INCLUDE ALL SUCH PAYMENT NOTWITHSTANDING ANY RIGHT ARISING AS A CONSEQUENCE TO SUCH PAYMENT; (B) INTEREST RECEIVED BY AN ASSESSEE ON COMPENSATIO N OR ON ENHANCED COMPENSATE-ION, AS THE CASE MAY BE, SHALL BE DEEMED TO BE THE INCOME OF THE YEAR IN WHICH IT IS RECEIVED.' (EMPHASIS SUPPLIED) 3. AS PER THE MANDATE OF CLAUSE (A)(II) OF SECTION 145A, THE VALUATION OF INVENTORY IS TO BE ADJUSTED TO INCLUDE THE AMOUNT O F ANY TAX ETC. 'ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION'. THE IMPORTANT WORDS A RE 'ACTUALLY PAID OR INCURRED'. THUS, THE QUESTION OF INCLUSION OF DUTY ETC. WOULD ARISE ONLY WHEN IT IS ACTUALLY PAID OR THE LIABILITY FOR PAYMENT IS INCURRED. THE PROVI SIONS OF SECTION 145A HAVE COME UP FOR INTERPRETATION BEFORE THE HON'BLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. LOKNETE BALASAHEB DESAI S.S.K. LTD. 339 ITR 288. FOR READY REFERENCE, THE HEADNOTE OF THIS CASE IS REPRODUCED BELOW: 'SECTION 145A OF THE INCOME-TAX ACT, 1961, WAS INSE RTED BY THE FINANCE (NO. 2) ACT, 1998, WITH EFFECT FROM APRIL 1, 1999. IT PR OVIDES FOR VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PU RPOSES OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND G AINS OF BUSINESS OR PROFESSION'. THE EXPRESSION 'INCURRED BY THE ASSESS EE' IN SECTION 145A(B) IS FOLLOWED BY THE WORDS 'TO BRING THE GOODS TO THE PL ACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION'. THUS, THE E XPRESSION 'INCURRED BY THE ASSESSEE' RELATES TO THE LIABILITY DETERMINED AS TA X, DUTY, CESS OR FEE PAYABLE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 7 - IN BRINGING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION OF THE GOODS. THE EXPLANATION TO SECTION 145A(B) MAKES IT FURTHER CLEAR THAT THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUS INESS' SHALL BE ADJUSTED BY THE AMOUNT PAID AS TAX, DUTY, CESS OR FEE. THERE FORE, THE EXPRESSION 'INCURRED' IN SECTION 145A(B) MUST BE CONSTRUED TO MEAN THE LIABILITY ACTUALLY INCURRED BY THE ASSESSEE. THOUGH THE DATE OF MANUFACTURE IS THE RELEVANT DATE FOR DURABILITY, THE RELEVANT DATE FOR THE DUTY LIABILITY IS THE DATE ON WHICH THE GOODS ARE CLEARED. IN OTHER WORDS, IN RESPECT OF EXCISABLE GOODS, MANUFACTURED AND LYING IN STOCK, THE EXCISE DUTY LIABILITY WOULD GET CRYSTALLISED ON THE DATE OF CLEARANCE OF GOODS AND NOT ON THE DATE OF MANUFACTURE. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFAC TURE AND SALE OF WHITE SUGAR. IN THE ASSESSMENT YEAR 2001-02 THE ASSESSING OFFICER HELD THAT THE EXCISE DUTY ON SUGAR MANUFACTURED BUT NOT SOLD AND LYING IN CLOSING STOCK WAS A LIABILITY INCURRED BY THE ASSESSEE UNDER SECT ION 145A(B) AND HAD TO BE CONSIDERED FOR DISALLOWANCE UNDER SECTION 43B OF TH E ACT. THE TRIBUNAL DELETED THE ADDITION. ON APPEAL TO THE HIGH COURT: HELD, THAT THE MANUFACTURED SUGAR WAS LYING IN STOC K AND WAS NOT CLEARED FROM THE FACTORY. THEREFORE, THE TRIBUNAL WAS JUSTI FIED IN HOLDING THAT IN RESPECT OF THE UNSOLD SUGAR LYING IN STOCK. CENTRAL EXCISE LIABILITY WAS NOT INCURRED AND CONSEQUENTLY THE ADDITION OF EXCISE DU TY MADE BY THE ASSESSING OFFICER TO THE VALUE OF THE EXCISABLE GOODS WAS LIA BLE TO BE DELETED.' (EMPHASIS SUPPLIED) 4. KIND REFERENCE IS ALSO INVITED TO THE HON 'BLE SUPREME COURT DECISION IN THE CASE OF CIT VS. DYNAVISION LTD., 348 ITR 380 AND THE RELEVANT PART OF THE JUDGEMENT IS REPRODUCED BELOW FROM PAGE 381 OF THE REPORT: '..LASTLY, THOUGH UNDER SECTION 3 OF THE CENTRAL EX CISE ACT. 1944. THE LEVY OF EXCISE DUTY IS ON THE MANUFACTURE OF THE FINISHED P RODUCT THE SAME IS QUANTIFIED AND COLLECTED ON THE VALUE (I.E. SELLING PRICE). BEFORE CONCLUDING, WE MAY RELY ON THE JUDGMENT OF THIS COURT IN THE CA SE OF CHAINRUP SAMPATRAM V. CIT REPORTED IN [1953] 24 ITR 481 (SC) IN WHICH IT HAS BEEN HELD THAT, 'VALUATION OF UNSOLD STOCK AT THE CLOSE OF THE ACCOUNTING PERIOD WAS A NECESSARY PART OF THE PROCESS OF DETERMINING THE TRADING RESULTS OF THAT PERIOD. IT CANNOT BE REGARDED AS SOURCE OF PROFITS. THAT, THE TRUE PURPOSE OF CREDITING THE VALUE OF UNSOLD STOCK IS TO BALANCE T HE COST OF THE GOODS ENTERED ON THE OTHER SIDE OF THE ACCOUNT AT THE TIME OF THE PURCHASE, SO THAT ON CANCELLING OUT OF THE ENTRIES RELATING TO THE SAME STOCK FROM BOTH SIDES OF THE ACCOUNT WOULD LEAVE ONLY THE TRANSACTIONS IN WHICH ACTUAL SALES IN THE COURSE OF THE YEAR HAS TAKEN PLACE AND THEREBY SHOWING THE PROFIT OR LOSS ACTUALLY REALIZED ON THE YEAR'S TRADING. THE ENTRY FOR STOCK WHICH APPEARS IN THE TRADING ACCOUNT IS INTENDED TO CANCEL THE CHARGE FO R THE GOODS BOUGHT WHICH HAVE REMAINED UNSOLD WHICH SHOULD REPRESENT THE COS T OF THE GOODS', (SEE ALSO: PARA. 8 OF THE JUDGMENT OF THIS COURT IN THE CASE OF CIT V. HINDUSTAN ZINC LTD. REPORTED IN [2007] 291 ITR 391 (SC).' (EMPHASIS SUPPLIED) 5. FOR THE SAME PROPOSITION, THE ASSESSEE-C OMPANY STRONGLY RELIES ON THE HON'BLE GUJARAT HIGH COURT DECISION IN THE CASE OF ACIT VS. NARMADA CHENATUR ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 8 - PETROCHEMICALS LTD., 327 ITR 369. THE RELEVANT PARTS OF THE HEADNOTE OF THIS CASE ARE REPRODUCED BELOW FOR READY REFERENCE: 'ACCORDING TO THE SETTLED LEGAL POSITION AND ACCEPT ED PRINCIPLES OF ACCOUNTING, CLOSING STOCK HAS TO BE VALUED, AT THE OPTION OF THE ASSESSEE, AT COST OR MARKET PRICE, WHICHEVER IS LOWER. DUTY OF C ENTRAL EXCISE IS LEVIED ON THE GOODS MANUFACTURED, I.E.. EXCISABLE GOODS MANUF ACTURED BY AN ASSESSEE. IT IS NOT A PART OF MANUFACTURING COST. IT CAN BE T ERMED A POST-MANUFACTURING COST. THEREFORE, UNLESS AND UNTIL IT IS ENTERED ON ONE SIDE, AS AN ITEM OF COST, IT CANNOT BE TAKEN AS A COMPONENT OF THE VALUE OF T HE CLOSING STOCK ON THE OTHER SIDE. THE TRUE PURPOSE OF CREDITING THE VALUE OF UNSOLD STOCK IS TO BALANCE THE COST OF THOSE GOODS ENTERED ON THE OTHE R SIDE OF THE ACCOUNT. THE WORD 'LIABLE' HAS BEEN DEFINED TO MEAN OBLIGED IN LAW OR EQUITY; SUBJECT; ANSWERABLE; RESPONSIBLE. THUS, LIABILITY I S THE STATE OF BEING LIABLE; HAVING RESPONSIBILITY OR OBLIGATION, E.G., TO MAKE PAYMENT OF DEBTS. THOUGH THE OPENING PORTION OF SUB-SECTION (1) OF SE CTION 3 OF THE CENTRAL EXCISE ACT, 1944 IN ISOLATION, APPEARS TO INDICATE THAT THE CHARGE IS LEVIED IN SECTION 3 AND THE LIABILITY STANDS INCURRED UPON MA NUFACTURE OF EXCISABLE GOODS AT THE RATES SET OUT IN THE FIRST SCHEDULE TO THE CENTRAL EXCISE TARIFF ACT, 1985, WHEN ONE READS SECTION 4, IT BECOMES CLE AR THAT THE ASSESSEE UNDER THE EXCISE ACT IS NOT REQUIRED TO DISCHARGE THE LIA BILITY TO PAY DUTY LEVIED UPON THE MANUFACTURE OF EXCISABLE GOODS, TILL SUCH GOODS ARE REMOVED FROM THE FACTORY PREMISES, OR A BONDED WAREHOUSE. THE TEST TO DETERMINE AS TO WHETHER THE LIABILITY HAD BEEN INCURRED OR NOT WOUL D BE WHETHER A CORRESPONDING RIGHT IS AVAILABLE WITH THE EXCISE AU THORITY TO ENFORCE SUCH A LIABILITY. MERE PRODUCTION OR MANUFACTURE BY ITSELF WOULD NOT BE SUFFICIENT. NEITHER THE RATE NOR THE VALUE WOULD BE DETERMINABL E TILL THE POINT OF TIME OF REMOVAL OF THE EXCISABLE GOODS FROM THE FACTORY PRE MISES AND HENCE THE SCHEME ITSELF INDICATES THAT SO FAR AS AN ASSESSEE IS CONCERNED, HE INCURS LIABILITY TO PAY EXCISE DUTY ONLY UPON BOTH THE EVE NTS TAKING PLACE, NAMELY, MANUFACTURE OF EXCISABLE GOODS AND REMOVAL OF EXCIS ABLE GOODS. FOR THE PURPOSES OF THE INCOME-TAX ACT, THE POSITION IN LAW CANNOT BE DIFFERENT. THE MAKING OF AN ENTRY OR ABSENCE OF AN ENTRY CANNO T DETERMINE THE RIGHTS AND LIABILITIES OF PARTIES. IN OTHER WORDS, IF THE LAW DOES NOT LEAD TO INCURRING OF A LIABILITY, OR DOES NOT LEAD TO A CORRESPONDING RIGHT TO INSIST ON DISCHARGING SUCH A LIABILITY ANY ACCOUNTING PRACTIC E (EVEN IF SUGGESTED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA) CANNOT LAY DOWN ANYTHING TO THE CONTRARY. AN INTERPRETATION OF A PARTICULAR STATUTE SHOULD NO T ORDINARILY BE IN CONFLICT WITH ANOTHER STATUTE UNLESS AND UNTIL SPECIFICALLY PROVIDED SO BY THE OTHER STATUTE. WITH THE RETURN OF TOTAL INCOME FOR THE ASSESSMENT YEAR 1997-98, THE ASSESSEE FILED VARIOUS STATUTORY ACCOUNTS INCLUDING THE AUDI TED BALANCE-SHEET AND PROFIT AND LOSS ACCOUNT ACCOMPANYING THE ANNUAL REP ORT OF THE ASSESSEE COMPANY. A NOTE WAS MADE IN SCHEDULE 23 OF THE ANNU AL REPORT STATING THAT THE COMPANY HAD NOT ACCOUNTED FOR THE LIABILITY FOR EXCISE DUTY ON FINISHED ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 9 - GOODS AS IT WOULD BECOME DUE AS AND WHEN THE GOODS WERE SOLD AND CLEARED FROM FACTORY PREMISES. THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE ENTIRE AMOUNT OF EXCISE DUTY OF RS. 20,17,000 PERTAINING TO THE FINISHED GOODS AS ON MARCH 31, 1997 SHOULD NOT BE INCLUDED IN THE VALUE OF INVENTORY OF THE FINISHED GOODS. THE ASSESSEE TE NDERED AN EXPLANATION. THE ASSESSING OFFICER HELD THAT THE GOODS HAD BEEN MANU FACTURED, WERE READY FOR DESPATCH, AND HENCE THE LIABILITY OF EXCISE DUTY RE LATING TO CLOSING STOCK OF FINISHED GOODS HAD ALREADY ACCRUED AND THEREFORE, S HOULD HAVE BEEN SHOWN AS PART OF CLOSING STOCK SINCE THE ASSESSEE WAS FOL LOWING THE MERCANTILE SYSTEM OF ACCOUNTING. THE ASSESSING OFFICER FURTHER HELD THAT AS NO PROVISION HAD BEEN MADE NOR THE EXCISE DUTY BEEN PAID, NO DED UCTION UNDER SECTION 43B OF THE INCOME-TAX ACT, 1961 COULD BE ALLOWED BU T THE ENTIRE AMOUNT WAS REQUIRED TO BE ADDED FOR THE PURPOSES OF VALUATION OF FINISHED GOODS THUS RESULTING IN ADDITION OF AN IDENTICAL AMOUNT TO THE RETURNED INCOME OF THE ASSESSEE. THE COMMISSIONER (APPEALS) ALLOWED THE AS SESSEE'S APPEAL AND THE TRIBUNAL AFFIRMED THIS REFERRING TO SECTION 145A IN SERTED IN THE ACT BY THE FINANCE (NO. 2) ACT, 1998 WITH EFFECT FROM APRIL 1, 1999 AND STATING THAT THE PROPOSAL TO INTRODUCE THIS SECTION WITH RETROSPECTI VE EFFECT WAS NOT APPROVED BY THE LEGISLATURE AND HENCE ANY TAX, DUTY, CESS OR FEE PRIOR TO ASSESSMENT YEAR 1999-2000 COULD NOT BE ADDED TO THE VALUATION OF CLOSING STOCK. ON APPEAL: HELD, DISMISSING THE APPEAL, THAT THE TRIBUNAL WAS JUSTIFIED IN EXCLUDING THE EXCISE DUTY AT THE TIME OF VALUATION OF THE CLOSING STOCK OF FINISHED GOODS AT THE END OF THE ACCOUNTING PERIOD BECAUSE: (A) NO DEDUCTION FOR THE LIABILITY HAD BEEN CLAIMED BY THE ASSESSEE. THE EXCISE DUTY PAYABLE ON THE FINISHED GOODS LYING IN THE CLOSING STOCK AT THE END OF THE RELEVANT ACCOUNTING PERIOD HAD BEEN PAID IN THE SUBSEQUENT YEAR BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCO ME AND THAT WAS HOW THE AMOUNT WAS AVAILABLE CONSIDERING THE FACT THAT THE ASSESSMENT HAD BEEN FRAMED AND THE SHOW-CAUSE NOTICE WAS ISSUED MUCH AF TER THE CLOSE OF THE ACCOUNTING YEAR; (B) THE ASSESSING OFFICER HAD NOT HAD RECOURSE TO S UBSECTION (3) OF SECTION 145 OF THE ACT. THE ASSESSEE WAS FOLLOWING THE MERC ANTILE SYSTEM OF ACCOUNTING BUT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSING OFFICER WAS NOT IN A POSITION TO DEDUCE TRUE PROFIT S OF THE YEAR UNDER CONSIDERATION. SUCH DUTY OF CENTRAL EXCISE IF ADDED TO ENHANCE THE VALUE OF CLOSING STOCK WOULD RESULT IN ENHANCED OPENING STOC K ON THE FIRST DAY OF THE NEXT ACCOUNTING PERIOD, NAMELY, APRIL 1. 1997. SO T HE NEXT YEAR X S PROFITS WOULD GET DEPRESSED ACCORDINGLY. OVER A PERIOD OF T IME THE WHOLE EXERCISE WOULD EVEN OUT, IN OTHER WORDS, BE REVENUE NEUTRAL. AT THE SAME TIME WHILE DISTURBING THE VALUE OF THE CLOSING STOCK THE ASSES SING AUTHORITY COULD NOT CHANGE THE METHOD OF ACCOUNTING REGULARLY EMPLOYED. ' (EMPHASIS SUPPLIED) ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 10 - 6. FROM THE ABOVE, IT MAY KINDLY BE SEEN THA T THE VALUATION OF CLOSING STOCK HAS BEEN CORRECTLY DONE BY THE ASSESSEE-COMPANY IN ACCO RDANCE WITH THE PROVISIONS OF SECTION 145A. 7. THE AFORESAID LEGAL POSITION REGARDING AC CRUAL OF EXCISE DUTY WAS THOROUGHLY EXPLAINED BEFORE THE LEARNED CIT IN THE WRITTEN REP LY. IT WAS FURTHER EXPLAINED THAT THE METHOD ADOPTED BY THE ASSESSEE WAS IN CONSONANC E WITH ACCOUNTING STANDARD 2 READ WITH THE GUIDANCE NOTE ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. THIS GUIDANCE NOTE WAS ISSUED TO RECONCILE T HE DIFFERENCE IN APPROACH FOR DETERMINING THE VALUATION OF PURCHASES AND SALES OF GOODS AND CLOSING STOCK AS PER AS-2 AND AS PER THE PROVISIONS OF SECTION 145A AND THE INSTITUTE OPINED THAT THE DIFFERENCE IN APPROACH FOR PREPARATION OF FINANCIAL STATEMENTS AND FOR COMPUTATION OF TAX LIABILITY SHALL HAVE NO IMPACT ON THE PROFIT OR LOSS OF THE ASSESSEE-COMPANY. IN OTHER WORDS, EXCISE DUTY IS ACCOUNTED ON ACTUAL SAL ES AND FOR PAYMENT OF SUCH EXCISE DUTY THE ASSESSEE GETS MATCHING DEDUCTION BY VIRTUE OF PROVISIONS OF SECTION 43B OF THE I.T. ACT. IT WAS ALSO SUBMITTED BEFORE THE LEAR NED CIT THAT THE AFORESAID VIEW OF THE INSTITUTE HAS BEEN ENDORSED BY THE HON'BLE GUJA RAT HIGH COURT IN THE CASE OF NARMADA CHEMATUR PETROCHEMICALS (SUPRA) WHEREIN IT WAS HELD THAT IF THE AMOUNT OF DUTY IS NOT ENTERED ON ONE SIDE AS AN ITEM OF COST, IT CANNOT BE TAKEN AS A COMPONENT OF THE VALUE OF THE CLOSING STOCK ON THE OTHER SIDE . THERE IS ANOTHER DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. U NIQUE INDUSTRIES, 307 ITR 350, WHEREIN IT WAS HELD THAT EXCISE DUTY, SALES-TAX AND OTHER DUTIES FORM PART OF CLOSING STOCK WHEN THE SAME ARE ACTUALLY INCURRED. AS EXPLA INED ABOVE, IN THE CASE OF THE ASSESSEE-COMPANY THE LIABILITY FOR EXCISE DUTY IS N OT INCURRED TILL THE RELEVANT GOODS HAVE BEEN CLEARED FOR CONSUMPTION. 8. THE LEARNED CIT WAS ALSO INFORMED THAT THE FIGURE O F ASSUMED UNDERASSESSMENT TO THE EXTENT OF RS.182.36 LACS MEN TIONED IN THE SHOW CAUSE NOTICE WAS FACTUALLY INCORRECT. THESE FIGURES AS ME NTIONED ABOVE WERE SIMPLY ADOPTED BY THE LEARNED CIT FROM ANNEXURE-IX OF THE AUDITED ACCOUNTS. THE AFORESAID ANNEXURE-IX INDICATES THE TOTAL FIGURES P ERTAINING TO PNG AND CNG. AS MENTIONED ABOVE EXCISE DUTY IS NOT LEVIABLE ON P NG AND ONLY CNG IS EXCISABLE. THE FACTUAL POSITION REGARDING OPENING S TOCK, PURCHASES, SALES AND CLOSING STOCK OF PNG AND CNG IS SEPARATELY EXPLAINE D AT PARA-20 OF NOTE NO.36 OF THE 'NOTES TO FINANCIAL STATEMENTS' WHICH FORMS PART OF THE AUDITED ACCOUNTS ALREADY FILED ALONGWITH THE RETURN OF INCO ME BEFORE THE ASSESSING OFFICER. AS PER THESE DETAILS THE FACTUAL POSITION OF CNG FOR THE YEAR ENDED 31.3.2008 IS AS UNDER: SR. NO. PARTICULARS AMOUNT IN RS. 1. OPENING STOCK 3,35,838 2. CONVERSION FROM PNG 78,50,59,046 3. SALES DURING THE YEAR 124,07,25,659 4. CLOSING STOCK 4,50,920 ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 11 - 9. FROM THE ABOVE, IT MAY KINDLY BE APPRECIA TED THAT THE FIGURE OF CLOSING STOCK OF CNG IS NEGLIGIBLE HAVING REGARD TO THE VOLUME OF THE ASSESSEE'S TURNOVER. IT IS TO BE FURTHER APPRECIATED THAT THE COMPONENT OF EXCISE DUTY / SERVICE TAX CONTAINED IN THE VALUE OF OPENING STOCK AND CLOSING STOCK WOULD BE MUCH LOWER AND ITS IMPACT WOULD BE NEGLIGIBLE. 10. IT WAS FURTHER EXPLAINED TO THE LEARNED CI T THAT EVEN THIS NEGLIGIBLE EFFECT WOULD BE VIRTUALLY CANCELLED BECAUSE IF SOME ADDITI ON IS MADE TO THE VALUE OF CLOSING STOCK THE OPENING STOCK OF THIS YEAR WILL ALSO HAVE TO BE REVALUED ON THE SAME BASIS AS PER THE FINDING OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MAHAVIR ALLUMINIUM LTD., 297 ITR 77. FURTHER, THE VALUE OF OPENING STOCK FOR THE SUBSEQUENT YEAR WILL ALSO HAVE TO BE SIMILARLY ADJUSTED WITH T HE RESULT THAT THE ENTIRE EXERCISE IS GOING TO BE REVENUE NEUTRAL. TO FURTHER EMPHASIZE T HE FUTILITY OF THIS EXERCISE, BEING REVENUE NEUTRAL, FOLLOWING EXPLANATION HAS GIVEN BE FORE THE LEARNED CIT AT 12 OF THE WRITTEN REPLY: '12. IN THE BACKDROP OF THE ABOVE MENTIONED FACT UAL AND LEGAL POSITION WITH REGARD TO THE MANDATE OF SECTION 145A, THE JURISDIC TIONAL SCOPE AND AMBIT OF THE POWERS OF THE CIT U/S.263 MAY BE CONSIDERED. IN THE PRESENT CASE THE RETURN OF INCOME WAS ACCOMP ANIED BY STATUTORILY AUDITED ACCOUNTS AND PRESCRIBED FORMS DULY CERTIFIE D BY THE AUDITORS AND COMPLETE INFORMATION REGARDING THE ACCOUNTING PROCE DURE WAS FULLY REFLECTED FROM THESE ACCOUNTS. AS A MATTER OF FACT, AS PER AN NEXURE-'III(A)' OF THE AUDITED ACCOUNTS, THE EFFECT OF THE METHOD OF VALUA TION, ON THE PROFIT AND LOSS ACCOUNT IS ANALYZED AS CERTIFIED BY THE AUDITO RS. AS PER THIS ANNEXURE (COPY OF WHICH IS ATTACHED AS ANNEXURE-D FOR READY REFERENCE), PROFIT AS PER PROFIT AND LOSS ACCOUNT IS SHOWN AT RS.13,75,06,878 . EXCISE DUTY ON SALES IS RS.17,37,25,364 WHICH IS ADDED TO THE AFORESAID NET PROFIT RESULTING INTO THE TOTAL FIGURE OF RS.31,12,32,242. THEREAFTER, THE EX CISE DUTY OF RS.17,37,25,364 IS DEDUCTED U/S.43B RESULTING INTO THE SAME NET PROFIT OF RS.13,75,06,878. THIS CLEARLY SHOWS THAT THERE IS N O IMPACT IN THE TAXABLE PROFIT OF THE ASSESSEE...' 11. THE SCOPE AND AMBIT OF THE JURISDICTION OF THE CIT VESTED U/S.263 WAS ALSO FULLY EXPLAINED BEFORE THE LEARNED CIT, IN THE WRITTEN RE PLY, DRAWING SUPPORT FROM VARIOUS JUDICIAL PRONOUNCEMENTS AND IT WOULD BE FRUITFUL TO REPRODUCE BELOW THE RELEVANT PART OF THE WRITTEN REPLY FOR THE KIND CONSIDERATIO N OF THIS HON'BLE TRIBUNAL: '.... ALL THESE DETAILS WERE ALREADY THERE BEFORE T HE ASSESSING OFFICER WHEN HE FRAMED THE ORIGINAL ASSESSMENT AFTER THOROUGH SCRUT INY AND OBVIOUSLY ON A CAREFUL AND JUDICIOUS CONSIDERATION OF THE ACCOUNTI NG PROCEDURES AND IMPACT THEREOF ON THE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFICER DID NOT CONSIDER IT NECESSARY TO MAKE ANY ADJUSTMENTS IN TH E VALUATION OF OPENING STOCK AND CLOSING STOCK. EVEN THOUGH THERE IS NO DI RECT DISCUSSION IN THE ASSESSMENT ORDER ON THIS ISSUE, IT IS OBVIOUS THAT THE ASSESSING OFFICER HAS DULY CONSIDERED ALL THE RELEVANT FACTS WHICH WERE D ULY PLACED BEFORE HIM IN THE AUDITED ACCOUNTS AND FURTHER EXPLAINED ORALLY D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS. IN THESE CIRCUMSTANCES, WHE N THE ASSESSING OFFICER ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 12 - HAS ADOPTED A VIEW WHICH IS PLAUSIBLE AND WHICH HAS NOT RESULTED INTO ANY UNDER ASSESSMENT OF INCOME, THE ORDER PASSED BY HIM IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE REFORE, IT IS RESPECTFULLY SUBMITTED THAT THE JURISDICTION U/S.263 CANNOT BE L EGALLY INVOKED. 13. THE ASSESSEE RELIES ON THE HON'BLE GUJARAT HIGH COURT DECISION IN THE CASE OF CIT V. ARVIND JEWELERS 259 ITR 502. THE FACTS AND THE RATIO OF THIS CASE ARE REPRODUCED BELOW FOR YOUR KIND CONSIDERATION: 'THE PROVISIONS OF SECTION 263 OF THE INCOME-TAX AC T. 1961. CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE O R ERROR COMMITTED BY THE ASSESSING OFFICER. IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT A PPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS T O BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFF ICER AND EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE. WHEN AN ASSESSING OFFICER ADOPTS ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULT ED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AN D THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. THE ASSESSEE-FIRM HAD FILED ITS RETURN OF INCOME DI SCLOSING A NET LOSS OF RS. 2,777 IN THE BUSINESS OF PURCHASE AND SALE OF ORNAM ENTS AND JEWELLERY. THE INCOME-TAX OFFICER ISSUED NOTICES UNDER SECTIONS 14 3(2) AND 142(1) OF THE INCOME-TAX ACT ALONG WITH THE REQUIREMENT LETTER. A FTER CONSIDERING THE MATERIAL PRODUCED BY THE ASSESSEE AND THE EXPLANATI ON OFFERED, THE INCOME- TAX OFFICER FRAMED THE ASSESSMENT DETERMINING THE T OTAL INCOME AT RS. 32,900. THE COMMISSIONER OF INCOME-TAX HELD THAT TH E ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IN SO FAR AS THE INCOME-TAX OFFICER HAD NOT CARRIED OUT ANY INVESTIGATION EITHE R WHILE ADDING CERTAIN AMOUNTS IN THE TOTAL INCOME OR WHILE ACCEPTING THE ASSESSEE'S EXPLANATIONS ON THE VARIOUS POINTS. THE TRIBUNAL SET ASIDE THE O RDER OF THE COMMISSIONER OF INCOME-TAX. ON A REFERENCE: HELD, THAT THE FINDING OF FACT BY THE TRIBUNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICES ISSUED UNDER SECTION 142(1) AS WELL AS SECT ION 143(2) OF THE ACT AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS, TH E INCOME-TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. SINCE THE MATERIAL W AS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME-TAX OFFI CER AND A PARTICULAR VIEW WAS TAKEN, THE MERE FACT THAT DIFFERENT VIEW C AN BE TAKEN SHOULD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263. THE ORDE R OF REVISION WAS NOT JUSTIFIED.' (EMPHASIS SUPPLIED) ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 13 - FROM THE ABOVE GUJARAT HIGH COURT JUDGEMENT, IT IS CLEAR THAT EVEN IF TWO POSSIBLE VIEWS ARE POSSIBLE ON MERITS OF A QUESTION, AND IF THE ASSESSING OFFICER HAS ADOPTED ONE VIEW, HIS ORDER CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. FOR THE SAME PROPOSITION, RELIANCE IS PLAC ED ON THE LEADING SUPREME COURT DECISION IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD, V. CIT 243 ITR 83 AND THE HON'BLE SUPREME COURT DECISION IN THE CASE OF CIT V. G. M. MITTAL STAINLESS STEEL P. LTD. 263 ITR 255. 14. RELIANCE IS ALSO PLACED ON THE ALLAHABAD HIGH C OURT JUDGEMENT IN THE CASE OF CIT V. MAHENDRAKUMAR BANSAL 297 ITR 99 WHEREIN IT HAS BEEN HELD THAT MERELY BECAUSE THE ITO HAD NOT WRITTEN A LENGTHY ORDER, IT WOULD NOT ESTABLISH WITHOUT BRINGING ON RECORD SPECIFIC INSTANCES THAT THE ASSE SSMENT ORDER PASSED U/S. 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. THE ASSESSEE STRONGLY RELIES ON THE BOMBAY HIGH COURT DECISION IN THE CAS E OF CIT V. GABRIAL [INDIA] LTD. 203 ITR 188. IN THIS CASE, IT WAS HELD THAT IF THE ASSESSING OFF ICER HAS RAISED QUERIES AND THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS/EXPL ANATION, MERELY BECAUSE THERE IS NO DISCUSSION IN THE ASSESSING OFFICER'S ORDER ON T HE RELEVANT ISSUE, IT CANNOT BE SAID THAT SUCH ORDER BECOMES ER RONEOUS. SIMILAR VIEW AS BEEN TAKEN BY THE RAJASTHAN HIGH COURT IN THE CASE OF CI T V. GANPAT RAM BISHNOI 296 ITR292. 15. FOR THE SAME PROPOSITION, THE ASSESSEE-COMPANY FURTHER RELIES ON THE FOLLOWING CASES: (1) CIT VS. HINDUSTAN COCO COLA BEVERAGES P. LTD. 331 ITR 192 (DEL.). THE HEADNOTE OF THIS CASE IS REPRODUCED BELOW FOR KIND CONSIDERATION: 'THE ASSESSEE, A LIMITED COMPANY WAS ENGAGED IN MAN UFACTURING AND TRADING OF NON- ALCOHOLIC BEVERAGES. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING LOSS FOR THE ASSESSMENT YEAR 2001-02 AND THE ASSESSMENT WAS COMP LETED DETERMINING THE LOSS AND ALLOWING DEPRECIATION ON GOODWILL AS CLAIMED IN THE RETURN. THE COMMISSIONER INVOKED HIS JURISDICTION UNDER SECTION 263 OF THE I NCOME-TAX ACT, 1961, ON THE VIEW THAT GOODWILL WAS NOT AN ASSET SO AS TO ENTITLE THE ASSESSEE THE BENEFIT OF DEPRECIATION AS CLAIMED UNDER SECTION 32 OF THE ACT AND, HENCE, THE ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH RE SULTED IN ESCAPEMENT OF INCOME. THE COMMISSIONER FURTHER NOTED THAT THE ASSESSEE CO NSIDERED GOODWILL TO BE A VALUABLE COMMERCIAL ASSET SIMILAR TO OTHER INTANGIB LE ASSETS MENTIONED IN THE DEFINITION OF BLOCK OF ASSETS WHICH WAS CONTRARY TO EXPLANATION 3 TO SECTION 32 AND, HENCE, IT WAS NOT JUSTIFIED. THE COMMISSIONER SET A SIDE THE ORDER OF THE ASSESSING OFFICER RELATING TO THE CLAIM OF DEPRECIATION ON GO ODWILL AND SENT THE MATTER FOR FRESH ADJUDICATION. THE TRIBUNAL HELD THAT FROM THE FACT THAT THE ASSESSING OFFICER HAD NOT DISCUSSED THE CLAIM OF DEPRECIATION ON GOODWILL IN THE ASSESSMENT ORDER EVEN THOUGH THE SAME CLAIM WAS ALLOWED IN THE EARLIER YEARS AND EVEN THOUGH THE ASSESSING OFFICER HAD BEFORE HIM A DETAILED EXPLANATION IN SU PPORT OF THE LEGAL CLAIM, IT COULD NOT BE INFERRED THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND TO THE MATTER. THE ASSESSING OFFICER DECIDED NOT TO REJECT THE CLAIM, ADMITTEDLY AFTER HAVING HAD AN OPPORTUNITY TO PERUSE THE DETAILED SUBMISSIONS, AND THIS STAND BY ITSELF COULD NOT IMPLY THAT THERE WAS NO APPLICATION OF MIND. WHEN T HE ASSESSING OFFICER TOOK A POSSIBLE VIEW OF THE MATTER ON THE MERITS, HIS ORDE R COULD NOT BE SUBJECTED TO REVIEW ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 14 - MERELY BECAUSE OTHER VIEW WAS POSSIBLE. THEREFORE THE TRIBUNAL DISLODGED THE ORDER PASSED BY THE COMMISSIONER. ON APPEAL: HELD, THAT IT WAS CLEAR FROM THE ORDER PASSED BY TH E TRIBUNAL, THAT THE DEPRECIATION WAS CLAIMED ON GOODWILL BY THE ASSESSEE ON ACCOUNT OF PAYMENT MADE FOR THE MARKETING AND TRADING REPUTATION, TRADE STYLE AND N AME, MARKETING AND DISTRIBUTION, TERRITORIAL KNOW-HOW, INCLUDING INFORMATION OR CONS UMPTION PATTERNS AND HABITS OF CONSUMERS IN THE TERRITORY AND THE DIFFERENCE BETWE EN THE CONSIDERATION PAID FOR BUSINESS AND VALUE OF TANGIBLE ASSETS. THE TRIBUNAL HAD TREATED IT TO BE VALUABLE COMMERCIAL ASSET SIMILAR TO OTHER INTANGIBLES MENTI ONED IN THE DEFINITION OF THE BLOCK OF ASSETS AND, HENCE, ELIGIBLE TO DEPRECIATION. IT HAD ALSO BEEN NOTED BY THE TRIBUNAL THAT THESE FACTS WERE STATED BY THE ASSESSEE IN THE AUDIT REPORT AND THE ASSESSING OFFICER HAD EXAMINED THE AUDIT REPORT AND ALSO MADE QUERIES AND ACCEPTED THE EXPLANATION PREFERRED BY THE ASSESSEE. THE ACCEPTAN CE OF THE CLAIM OF THE ASSESSEE BY THE ASSESSING OFFICER WOULD COME IN THE COMPARTMENT OF TAKING A PLAUSIBLE VIEW INASMUCH AS BASICALLY INTANGIBLE ASSETS WERE IDENTIFIABLE NON-MONETARY ASSETS THAT COULD NOT BE SEEN OR TOUCHED OR PHYSICAL MEASURES W HICH WERE CREATED THROUGH TIME AND / OR EFFORT AND THAT WERE IDENTIFIABLE AS A SEP ARATE ASSET. THEY COULD BE IN THE FORM OF COPYRIGHTS, PATENTS, TRADEMARKS, GOODWILL, TRADE SECRETS, CUSTOMER LISTS, MARKETING RIGHTS, FRANCHISES, ETC. WHICH EITHER ARI SE ON ACQUISITION OR WERE INTERNALLY GENERATED. GOODWILL CONVEYS A POSITIVE REPUTATION B UILT BY A PERSON/COMPANY/BUSINESS CONCERN OVER A PERIOD OF TI ME. THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT IF TWO VIEWS WERE POSSIBLE AND WHEN THE ASSESSING OFFICER HAD ACCEPTED ONE VIEW WHICH WAS A PLAUSIBLE ONE, IT WAS NOT APPROPRIATE ON THE PART OF THE COMMISSIONER TO EXERCISE HIS POWER UNDER SECTIO N 263 SOLELY ON THE GROUND THAT IN THE BOOKS OF ACCOUNT IT WAS MENTIONED AS GOODWIL L AND NOTHING ELSE.' (EMPHASIS SUPPLIED) (2) CIT VS. ANIL KUMAR SHARMA, 335 ITR 83 (DEL.). THE HEADNOTE IS REPRODUCED BELOW FOR REA DY REFERENCE: 'THERE IS A DISTINCTION BETWEEN 'LACK OF INQUIRY' A ND 'INADEQUATE INQUIRY'. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF TH E INCOME-TAX ACT, 1961, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER: HELD, DISMISSING THE APPEAL, THAT THE PRESENT CASE WOULD NOT BE ONE OF 'LACK OF INQUIRY' EVEN IF THE INQUIRY WAS TERMED INADEQUATE. THE TRIBUNAL FOUND THAT COMPLETE DETAILS WERE FILED BEFORE THE ASSESSING OFFICER AND THAT HE APPLIED HIS MIND TO THE RELEVANT MATERIAL AND FACTS, ALTHOUGH SUCH APPLICAT ION OF MIND WAS NOT DISCERNIBLE FROM THE ASSESSMENT ORDER. THE TRIBUNAL HELD THAT T HE COMMISSIONER IN PROCEEDINGS UNDER SECTION 263 ALSO HAD ALL THESE DETAILS AND MA TERIAL AVAILABLE BEFORE HIM, BUT HAD NOT BEEN ABLE TO POINT OUT DEFECTS CONCLUSIVELY IN THE MATERIAL, FOR ARRIVING AT A CONCLUSION THAT PARTICULAR INCOME HAD ESCAPED ASSES SMENT ON ACCOUNT OF NON- APPLICATION OF MIND BY THE ASSESSING OFFICER. THE TRIBUNAL WAS RIGHT AND THE ORDER OF REVISION WAS NOT VALID.' (EMPHASIS SUPPLIED) ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 15 - IN THE ABOVE CASE THE HON'BLE COURT HAS REFERRED TO ITS EARLIER DECISION IN THE CASE OF CIT VS. SUNBEAM AUTO LTD., 332 ITR 167 AND HAS REPRODUCED AT PAGE 85 THE FOLLOWING OBSERVATIONS OF THE HON'BLE HIGH COURT IN THE CASE OF SUNBEAM AUTO LTD.: '. . . . AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE REVENUE WAS THAT WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING O FFICER DID NOT CONSIDER THIS ASPECT SPECIFICALLY WHETHER THE EXPENDITURE IN QUESTION WA S REVENUE OR CAPITAL EXPENDITURE. THIS ARGUMENT PREDICATES ON THE ASSESSMENT ORDER, W HICH APPARENTLY DOES NOT GIVE ANY REASONS WHILE ALLOWING THE ENTIRE EXPENDITURE A S REVENUE EXPENDITURE. HOWEVER, THAT BY ITSELF WOULD NOT BE INDICATIVE OF THE FACT THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND ON THE ISSUE. THERE ARE JUDGMENTS GALORE LAYING DOWN THE PRINCIPL E THAT THE ASSESSING OFFICER IN THE ASSESSING ORDER I S NOT REQUIRED TO GIVE DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTI ON, ETC. THEREFORE, ONE HAS TO SEE FROM THE RECORD AS TO WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION AS REVENUE EXPENDITURE. LEA RNED COUNSEL FOR THE ASSESSEE IS RIGHT IN HIS SUBMISSION THAT ONE HAS TO KEEP IN MIN D THE DISTINCTION BETWEEN 'LACK OF INQUIRY' AND 'INADEQUATE INQUIRY'. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSION ER TO PASS ORDERS UNDER SECTION 263 OF THE ACT, MERELY BECAUSE HE HAS DIFFERENT OPI NION IN THE MATTER.' (EMPHASIS SUPPLIED) (3) CIT VS. R.K. CONSTRUCTION CO. 313 ITR 65 (GUJ.). THE HEADNOTE IS REPRODUCED BELOW FOR READ Y REFERENCE: 'THE COMMISSIONER OF INCOME-TAX ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961, IN RESPECT OF THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) FOR THE ASSE SSMENT YEAR 2001-02. IT WAS STATED IN THE SHOW-CAUSE NOTICE THAT FOR WANT OF CONDUCTIN G RELEVANT INQUIRIES THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE. THE COMMISSIONER UPON EXAMINING THE RECORDS CALLED FOR AND CONSIDERING THE DETAILED REPLIES OF THE ASSESSEE TO THE SECOND SHOW-CAUSE NOTICE PASSED AN ORDER ENHANCING THE TOTAL INCOME DETERMINED IN THE ASSESS MENT ORDER BY MAKING AN ADDITION IN RESPECT OF PAYMENT MADE BY THE ASSESSEE TO SUB-CONTRACTORS. IN AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMM ISSIONER, THE TRIBUNAL AFTER CONSIDERING THE ENTIRE FACTS AND EXAMINATION OF THE EVIDENCE PLACED BEFORE IT, ALLOWED THE APPEAL BOTH ON POINT OF LAW AS WELL AS THE MERI TS. THE TRIBUNAL ALSO GAVE A SPECIFIC FINDING TO THE EFFECT THAT THERE WAS NO EV IDENCE ON RECORD THAT THE SUB- CONTRACTORS WERE RELATED TO THE ASSESSEE OR WERE AS SOCIATES OR SISTER CONCERNS OF THE ASSESSEE. THE TRIBUNAL ALSO GAVE A FINDING THAT THE REVENUE HAD NOT DISCHARGED THE ONUS TO SHOW THAT THE PAYMENTS TO THE SUBCONTRACTOR S WERE NOT GENUINE. ON APPEAL BY THE DEPARTMENT: HELD, DISMISSING THE APPEAL, THAT SINCE ALL THE NEC ESSARY DETAILS WERE FURNISHED TO THE ASSESSING OFFICER, THERE WAS NO REASON FOR THE COMM ISSIONER TO INVOKE THE REVISIONAL JURISDICTION UNDER SECTION 263 OF THE ACT. THE ASSESSING OFFICER HAD TAKEN A PARTICULAR VIEW ON THE BASIS OF THE EVIDENCE PRODUC ED BEFORE HIM. ON THE BASIS OF THE EVIDENCE BEFORE THE ASSESSING OFFICER AND MATERIALS WHICH WERE COLLECTED BY THE COMMISSIONER IN REVISIONAL PROCEEDINGS, THE COMMISS IONER HAD TAKEN A DIFFERENT VIEW. HOWEVER, IN THE REVISIONAL PROCEEDINGS UNDER SECTION 263, IT WAS NOT OPEN FOR ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 16 - THE COMMISSIONER TO TAKE SUCH A DIFFERENT VIEW. THE RE WAS NOTHING ON RECORD TO SUGGEST THAT THE VIEW TAKEN BY THE ASSESSING OFFICE R WAS UNSUSTAINABLE IN LAW. (EMPHASIS SUPPLIED)' 12. THE LEARNED CIT HAS SUMMARILY REJECTED THE DETAILED SUBMISSIONS MADE BEFORE HIM, AT PARAS 5 & 6 OF HIS ORDER. AT PARA-6 HE HAS STATED THAT WITH REGARD TO MERITS OF THE CASE , ALL THE CASES RELIED UPON BY THE ASSESSE E WERE RENDERED IN THE CONTEXT OF THE PROVISIONS OF SECTION 145 OF THE L.T. ACT WHEREAS I N THE PRESENT CASE THE INTERPRETATION OF SECTION 145A AS AMENDED BY THE FINANCE ACT, 1998 , WAS INVOLVED. IT IS RESPECTFULLY SUBMITTED THAT THE LEARNED CIT HAS TOTALLY MISUNDER STOOD THE DECISIONS CITED BEFORE HIM. ALL THESE DECISIONS ARE REGARDING THE INTERPRE TATION OF THE AMENDED PROVISIONS OF SECTION 145A AND IN THESE CASES THE COURTS HAVE DISCUSSED AND DECIDED THE IMPLICATIONS OF WORDS 'ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION', CONTAINED IN SECTION 145A OF THE ACT. THE ENTIRE EMPHASIZE OF TH E ASSESSEE-COMPANY BEFORE THE LEARNED CIT WAS THAT EVEN AS PER THE MANDATE OF SEC TION 145A ONLY SUCH COMPONENT OF EXCISE DUTY ETC. CAN BE ADDED TO THE VALUE OF CL OSING STOCK, WHICH IS ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO T HE PLACE OF ITS LOCATION AND CONDITION AS ON THE FATE OF VALUATION. THE LEGAL PO SITION WAS FULLY CLARIFIED BEFORE THE LEARNED CIT TO THE EFFECT THAT IN THE PRESENT CASE THE LIABILITY HAD NOT BEEN INCURRED AND, THEREFORE, THE EXCISE DUTY WAS NOT TO BE CONSI DERED WHILE VALUING THE CLOSING STOCK. THE LEARNED CIT HAS ARBITRARILY ASSUMED THAT THE CA SES CITED ARE NOT IN CONNECTION WITH THE PROVISIONS OF SECTION 145A. 13. REGARDING THE SCOPE OF THE JURISDICTION OF CIT U/S.263 OF THE I.T. ACT, THE LEARNED CIT, AT PARA-5 OF HIS ORDER, HAS OPINED THA T 'SO FAR AS THE SECOND OBJECTION OF THE ASSESSEE IS CONCERNED, NAMELY THAT ACTION U/S.2 63 IS NOT POSSIBLE IN CASES WHERE THE A.O. HAD ALREADY EXAMINED THE ISSUE, THIS PROPO SAL IS PALPABLY UNTENABLE FOR THE REASON THAT THE POWER U/S.263 IS INTENDED TO CORREC T THE WRONG ASSESSMENT MADE BY THE ASSESSING AUTHORITY. IF THE STAND TAKEN BY THE A.O. WERE FINAL, THEN THERE WAS NO NEED TO HAVE SECTION 263 ON THE STATUTE BOOK AT ALL . SUCH INTERPRETATION WOULD RENDER THE SECTION SUPERFLUOUS WHICH COULD NEVER BE THE IN TENTION OF THE LEGISLATURE.' 14. THIS OBSERVATION OF THE LEARNED CIT IS AGAI NST THE ESTABLISHED LEGAL POSITION WHICH EMERGES FROM THE SEVERAL DECISIONS INCLUDING SUPREME COURT JUDGEMENTS, CITED BEFORE HIM IN THE WRITTEN SUBMISSIONS AS EXPLAINED ABOVE. THE LEARNED CIT HAS NOT EVEN CONSIDERED IT PROPER TO DEAL WITH ALL THESE CA SES RELIED UPON BEFORE HIM BY THE ASSESSEE-COMPANY. ON THE OTHER HAND, HE HAS REFERRE D TO THE FOLLOWING CASES TO SUBSTANTIATE HIS CONCLUSIONS: (I) CIT VS. M.M. KHAMBHATWALA, 198 ITR 144 (G UJ.) (II) SWARUP VEGETABLE PRODUCTS VS. CIT, 187 IT R 412 (ALL.) (III) CIT VS. SHREE MANJUNATHESWARE PACKING PRODUC TS AND CAMPHOR WORKS, 231 ITR 53 (SC) 15. IT IS RESPECTFULLY SUBMITTED THAT THE AFORE SAID CASES ARE NOT RELEVANT AT ALL. IN THE CASE OF M.M. KHAMBHATWALA (SUPRA) RENDERED ON 2 ND DECEMBER, 1991, THE HON'BLE GUJARAT HIGH COURT OBSERVED THAT U/S.263 CI T CAN EXERCISE POWER EVEN WHERE ISSUE IS DEBATABLE IF THE ORDER OF THE ITO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT REVISIONAL POWERS U/S.263 ARE NOT COMPARABLE WITH POWERS OF RECTIFICATION OF MISTAKE U/S.154 OF THE I .T. ACT. THE IMPACT OF THIS ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 17 - OBSERVATION OF THE HON'BLE GUJARAT HIGH COURT STAND S SUBSTANTIALLY DILUTED BY THE SUBSEQUENT LEADING DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) WHICH HAS BEEN CONSIDER ED, EXPLAINED AND FOLLOWED IN SEVERAL JUDGEMENTS BY DIFFERENT HIGH COURTS REFEREN CE TO WHICH HAS ALREADY BEEN MADE ABOVE. THE PRESENT ESTABLISHED POSITION IS THA T WHERE TWO PLAUSIBLE VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VI EW, THE ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE SAID TO BE ERRONEOUS. I N THE CASE OF SWARUP VEGETABLE PRODUCTS (SUPRA) THE FACTS WERE TOTALLY DIFFERENT. IN THAT CASE, THE ASSESSEE HAD ACTUALLY RECEIVED THE AMOUNT OF REFUND OF EXCISE DU TY WHICH WAS PLACED IN THE SUSPENSE ACCOUNT AND NOT IN THE PROFIT AND LOSS ACC OUNT ON THE GROUND THAT THE MATTER WAS PENDING BEFORE THE SUPREME COURT THE ITO DID NOT INCLUDE THE AFORESAID AMOUNT IN THE TAXABLE INCOME OF THE ASSESSEE. IN TH ESE CIRCUMSTANCES, THE HON'BLE ALLAHABAD HIGH COURT OBSERVED THAT PENDENCY OF DISP UTE BEFORE THE SUPREME COURT WAS NOT RELEVANT AND THE ORDER OF THE ITO WAS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HON'BLE SUPREME COURT JUDGEMENT IN THE CASE OF SHREE MANJUNATHESWARE PACKING PRODUCTS AND CAMPHOR WORKS (SUPRA) HAS NO RELEVANCE FOR DECIDING THE SCOPE AND AMBIT OF THE POWERS CONF ERRED U/S.263 OF THE I.T. ACT WHICH LAYS DOWN THAT SUCH POWERS CAN BE INVOKED BY THE CIT ONLY WHEN THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS INASMUCH AS IT I S PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE ABOVE CASE, THE HON'BLE SUPREME COU RT WAS CONCERNED WITH MERE INTERPRETATION OF THE WORD 'RECORD' AS DEFINED AT CLAUSE (B) OF THE EXPLANATION U/S.263(L) OF THE I.T. ACT. 16. IT IS HUMBLY SUBMITTED THAT THE SUPPORT DRAWN B Y THE LEARNED CIT FROM THE ABOVE THREE CASES IS TOTALLY FALLACIOUS. IN THE WRITTEN S UBMISSIONS IT WAS THOROUGHLY EXPLAINED, RELYING ON THE FACTUAL POSITION AS EMERG ING FROM THE AUDITED ACCOUNTS, THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THERE WAS NO ERROR FOR THE SIMPLE REASON THAT THE ASSESSEE-COMPANY WHILE VALUING THE OPENING STOCK AN D THE CLOSING STOCK HAD NOT CONTRAVENED THE PROVISIONS OF SECTION 145A OF THE I .T. ACT. AT THE SAME TIME, NO PREJUDICE WAS CAUSED TO THE REVENUE FOR THE REASON THAT EVEN IF ANY ADJUSTMENTS, WHICH WOULD BE NEGLIGIBLE, ARE MADE TO THE OPENING AND CLOSING STOCK, THE ENTIRE EXERCISE WOULD BE REVENUE NEUTRAL AND THUS NO LOSS HAD BEEN CAUSED TO THE REVENUE. IT IS RESPECTFULLY SUBMITTED THAT THE PRIMARY CONDI TION OF SECTION 263 IS NOT FULFILLED AND, THEREFORE, THE LEARNED CIT HAD NO JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 263 AND CANCEL THE ASSESSMENT ORDER PASSED BY THE A SSESSING OFFICER AND DIRECT HIM TO MAKE A FRESH ASSESSMENT. IT IS SUBMITTED THAT TH E ORDER PASSED BY THE LEARNED CIT DESERVES TO BE CANCELLED. FOR ADANI GAS LTD. SD/- DIRECTOR (APPELLANT) 4.2. BEFORE US, LD.SR.COUNSEL SUBMITTED THAT THE LD .CIT FAILED TO TAKE NOTE OF THE CASE-LAWS AND DID NOT ACCEPT THE EXPLAN ATION ON THE BASIS THAT THE CASES RELIED UPON BY THE LD.COUNSEL FOR THE ASS ESSEE RELATE TO DIFFERENT PROVISION OF THE ACT AND ALSO TO ASSESSMENT YEARS P RIOR TO BRINGING ON THE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 18 - STATUTE BOOK OF THE PROVISIONS UNDER SECTION 145A O F THE ACT. THIS OBSERVATION OF THE LD.CIT IS EX-FACIE INCORRECT. W E FIND THAT LD.CIT RECORDED THE SUBMISSIONS OF THE LD.AR IN PARA-3 OF HIS ORDER, WHICH IS REPRODUCED HEREINBELOW:- 3. IT WAS SUBMITTED BY THE LEARNED A.R. THAT THIS ISSUE HAS BEEN ADJUDICATED UPON BY THE JURISDICTIONAL HIGH COURT O F GUJARAT IN THE CASE OF NARMADA CHEMATUR PETROCHEMICALS LTD., 327 ITR 369 AND THE HON.SUPREME COURT IN THE CASE OF CIT VS. SH REE RAM HONDA POWER EQUIPMENT LTD. 26 TAXMAN.COM 331 WHEREI N IT HAS BEEN HELD THAT THE CENTRAL EXCISE LIABILITY/CENVAT CREDIT WAS NOT INCURRED SINCE THE GOODS WERE NOT CLEARED FROM THE FACTORY AND THEREFORE, THE INCLUSION OF THE SAME IN THE VALUE O F CLOSING STOCK WAS INCORRECT. FURTHER REFERENCE WAS MADE TO THE D ECISION OF APEX COURT IN THE CASE OF CIT VS.DYNAVISION LTD. 348 ITR 380 AND ACIT VS. TORRENT CABLES LTD. 26 TAXMAN.COM 334, WHE REIN THE APEX COURT HAS REITERATED ITS DECISION IN SHREE RAM HONDA POWER EQUIPMENT LTD. 4.3. THE LD.CIT DECIDED THIS ISSUE IN PARA-6 OF HIS ORDER, BY OBSERVING AS UNDER:- 6. WITH REGARD TO THE MERITS OF THE CASE, IT IS RE LEVANT TO NOTE THAT ALL THE CASES RELIED UPON BY THE LEARNED A.R. RELATE TO A DIFFERENT PROVISION OF THE ACT AND ALSO TO ASSESSME NT YEARS PRIOR TO BRINGING ON THE STATUTE BOOK OF THE PROVISIONS UNDE R SECTION 145A. SECTION 145A HAS BEEN INTRODUCED ON THE STATUTE BOO K BY THE FINANCE ACT, 1998, WITH EFFECT FROM 1-4-1999; AND W OULD THEREFORE APPLY IN RELATION TO ASSESSMENT YEAR 1999-2000 AND SUBSEQUENT YEARS. ON THE OTHER HAND, THE CASES RELIED UPON BY THE ASSESSEE ARE WITH REFERENCE TO THE PROVISIONS OF SECTION 145 AND NOT SECTION 145A. HENCE, THOSE DECISIONS CANNOT COME TO THE AI D OF THE ASSESSEE, AND ARE, THEREFORE, NOT CONSIDERED. 5. AFTER PERUSING THE VARIOUS CASE-LAWS AND THE FAC TS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE LD.CIT IS NOT JUS TIFIED IN INVOKING THE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 19 - SECTION 263 OF THE ACT. THE UNDISPUTED FACTS IN TH IS CASE ARE THAT THE ASSESSEE HAS BEEN FOLLOWING EXCLUSIVE METHOD BY NOT INCLUDING THE EXCISE DUTY. SO FAR AS THE NON-INCLUSION OF THE EXCISE DU TY ON PIPED NATURAL GAS (PNG) IS CONCERNED, THE ASSESSEE HAS DEMONSTRATED T HAT ON THIS NO EXCISE IS LEVIABLE AS PER THE NOTIFICATION NO.12/2012-CENT RAL EXCISE DATED 17/03/2012 ISSUED BY THE GOVERNMENT OF INDIA, MINIS TRY OF FINANCE (DEPARTMENT OF REVENUE), COPY ENCLOSED AT PAGE NOS. 24 & 25 OF THE PAPER-BOOK. THE LD.CIT IN PARA-6 OF HIS ORDER HAS HELD THAT THE CASE-LAWS RELIED UPON BY THE LEARNED AUTHORIZED REPRESENTATIV E OF THE ASSESSEE RELATE TO A DIFFERENT PROVISION OF THE ACT AND ALSO TO ASS ESSMENT YEARS PRIOR TO BRINGING ON THE STATUTE BOOK OF THE PROVISIONS UNDE R SECTION 145A OF THE ACT. WE FIND THAT AT PAGE-4 OF THE SUBMISSIONS I N PARA-3, THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. LOKNETE BALASAHEB DESAI SSK LTD. (339 ITR 288)[BOM.], DATED 22/06/2011, WHEREIN THE ASSESSMEN T YEAR INVOLVED WAS 2001-02 AND THE HONBLE HIGH COURT HAS EXAMINED THE PROVISIONS OF SECTION 145A OF THE ACT AND HELD AS UNDER:- 9. THE EXPRESSION 'INCURRED BY THE ASSESSEE 1 IN SECTION 145A(I) IS FOLLOWED BY THE WORDS 'TO BRING THE GOODS TO THE PLACE OF ITS L OCATION AND CONDITION AS ON THE DATE OF VALUATION'. THUS, THE EXPRESSION 'INCUR RED BY THE ASSESSEE' RELATES TO THE LIABILITY DETERMINED AS TAX, DUTY, CESS OR F EE PAYABLE IN BRINGING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION OF THE GOODS. EXPLANATION TO SECTION 145A(5) MAKES IT FURTHER CLEAR THAT THE INC OME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS SHALL BE ADJUSTE D BY THE AMOUNT PAID AS TAX, DUTY, CESS OR FEE. THEREFORE, THE EXPRESSION ' INCURRED' IN SECTION 145A(&) MUST BE CONSTRUED TO MEAN THE LIABILITY ACTUALLY IN CURRED BY THE ASSESSEE. 10. WHERE THE EXCISABLE GOODS ARE MANUFACTURED AND ARE LYING IN STOCK ON THE LAST DAY OF THE ACCOUNTING YEAR, WHETHER THE MANUFA CTURER HAS INCURRED LIABILITY TO PAY EXCISE DUTY ON THE MANUFACTURED GO ODS IS THE QUESTION. ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 20 - 11. THE APEX COURT IN THE CASE OF COLLECTOR OF CENT RAL EXCISE V. POLYSET CORPN. [2000] 115ELT41 HAS HELD THAT THE DURABILIT Y OF EXCISABLE GOODS IS DETERMINED WITH REFERENCE TO THE DATE OF MANUFACTUR E AND THE RATE OF EXCISE DUTY PAYABLE HAS TO BE DETERMINED WITH REFERENCE TO THE DATE OF CLEARANCE OF THE GOODS. THEREFORE, THOUGH THE DATE OF MANUFACTUR E IS THE RELEVANT DATE FOR DUTY LIABILITY, THE RELEVANT DATE FOR THE DUTY LI ABILITY IS THE DATE ON WHICH THE GOODS ARE CLEARED. IN OTHER WORDS, IN RESPECT OF EX CISABLE GOODS MANUFACTURED AND LYING IN STOCK, THE EXCISE DUTY LI ABILITY WOULD GET CRYSTALLISED ON THE DATE OF CLEARANCE OF GOODS AND NOT ON THE DATE OF MANUFACTURE. THEREFORE, TILL THE DATE OF CLEARANCE OF THE EXCISABLE GOODS THE EXCISE DUTY PAYABLE ON THE SAID GOODS DOES NOT GET CRYSTALLISED AND CONSEQUENTLY THE ASSESSEE CANNOT BE SAID TO HAVE IN CURRED THE EXCISE DUTY LIABILITY. IN RESPECT OF THE EXCISABLE GOODS LYING IN STOCK, NO LIABILITY IS DETERMINED AS PAYABLE AND CONSEQUENTLY, THERE WOULD BE NO QUESTION OF INCURRING EXCISE DUTY LIABILITY. 12. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE MANUFACTURED SUGAR WAS LYING IN STOCK AND THE SAME WERE NOT CLEARED FROM T HE FACTORY. THEREFORE, IN THE FACTS OF THE PRESENT CASE, THE IT AT WAS JUSTIF IED IN HOLDING THAT IN RESPECT OF UNSOLD SUGAR LYING IN STOCK, CENTRAL EXCISE LIAB ILITY WAS NOT INCURRED AND CONSEQUENTLY THE ADDITION OF EXCISE DUTY MADE BY TH E ASSESSING OFFICER TO THE VALUE OF THE EXCISABLE GOODS WAS LIABLE TO BE DELET ED. 13. IN THE RESULT, THE QUESTION RAISED IN THIS APPE AL IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. 5.1. WHILE DECIDING THIS ISSUE, THE HONBLE HIGH CO URT OF BOMBAY HAS ALSO REFERRED TO THE JUDGEMENT OF THE HONBLE MADHY A PRADESH HIGH COURT RENDERED IN THE CASE OF ACIT VS. D & H SEHER ON ELECTRODES (P.) LTD. (2008) 173 TAXMAN 188 (SUPRA). THE HONBLE MA DHYA PRADESH HIGH COURT HAS HELD AS UNDER:- AT THE STAGE, IT WOULD BE USEFUL TO REFER TO THE P ROVISIONS CONTAINED IN SECTION 145A OF THE INCOME-TAX ACT, WH ICH READ AS EXTRACTED BELOW:- SECTION:145A. METHOD OF ACCOUNTING IN CERTAIN CASES .NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 145 T HE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSES OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUS INESS OR PROFESSION' SHALL BE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 21 - (A) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REG ULARLY EMPLOYED BY THE ASSESSEE; AND (B) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY T AX, DUTY, CESS OR FEE (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION. 5.2. A BARE LOOK AT THE PROVISION MANIFESTS THAT IT IS ONLY WHEN THE TAX, DUTY, CESS OR FEE IS ACTUALLY PAID OR INCURRED BY T HE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION THAT THE SAID AM OUNT FORMS PART OF THE VALUE. IT IS NOT DISPUTED IN THE PRESENT CASE THA T THE EXCISE DUTY HAD NOT BEEN PAID BY THE ASSESSEE ON THE GOODS IN STOCK AS THE GOODS DID NOT LEAVE THE PREMISES. 5.3. THE HONBLE ITAT ALLAHABAD BENCH IN THE CASE O F SHYAM BIRI WORKS LTD. VS. ACIT REPORTED AT (2007) 108 ITD 489 (ALL.), AFTER EXAMINING THE PROVISIONS OF CENTRAL EXCISE ACT, 194 4 HELD, THE ASSESSEE IS NOT REQUIRED TO MAKE THE PAYMENT OF EXCISE DUTY ON THE GOODS KEPT IN THE BOUNDED WAREHOUSE UNTIL IT IS REMOVED THEREFROM . THUS, WHILE VALUING THE CLOSING STOCK OF THE GOODS KEPT IN THE BOUNDED PREMISES EXCISE DUTY NOT PAID IS NOT LIABLE TO BE INCLUDED I N THE CLOSING STOCK. THUS, WE ARE OF THE CONSIDERED VIEW THAT LD.CIT WAS NOT JUSTIFIED IN HOLDING THIS VIEW THAT EXCISE DUTY PAYABLE IS TO BE INCLUDED IN THE VALUATION OF CLOSING STOCK IN THE BOUNDED WAREHOUSE . SINCE THERE IS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS ACCOUNT, WE DO NOT FIND HIS ORDER ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ALL THE FACTS ARE AVAILABLE ON RECORD O F THE ASSESSING OFFICER AND, THEREFORE, THERE IS NO CASE OF CARRYING OUT AN Y ENQUIRY FOR TAKING A DECISION AS TO WHETHER EXCISE DUTY WAS INCLUDED IN THE VALUATION OF STOCK ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 22 - OR NOT. IN FACT, LD.CIT HAS HELD THE LEGAL VIEW AN D THERE WAS NO DIRECTION AS TO COLLECT SOME MORE FACTS. THE LEGAL VIEW HELD BY THE CIT WAS NOT FOUND CORRECT AND, THEREFORE, CANCELLATION OF THE O RDER BY HIM WAS NOT PROPER. HIS ORDER IS, THEREFORE, CANCELLED. W E ALSO FIND FORCE IN THE CONTENTION OF LD.COUNSEL FOR THE ASSESSEE THAT EVE N IF A NEGLIGIBLE ADDITION IS TO BE MADE ON THE ASSUMPTION TO THE CLO SING STOCK, OPENING STOCK WILL ALSO TO BE ADJUSTED ACCORDINGLY AND, HEN CE, THE ENTIRE EXERCISE WOULD BE REVENUE NEUTRAL. IN SUPPORT OF THIS CONTE NTION, LD.COUNSEL HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE DELH I HIGH COURT RENDERED IN THE CASE OF CIT VS. MAHAVIR ALLUMINIUM LTD., 297 ITR 77. WE FURTHER FIND THAT THE ASSESSEE HAS ALSO BROUGHT INTO THE NO TICE OF LD.CIT ABOUT ERROR IN THE FIGURES TAKEN BY HIM. IT WAS INFORMED THAT THE SAID FIGURES PERTAIN TO BOTH CNG AND PNG. IT WAS POINTED OUT TO THE LD.CIT(A) THAT NO EXCISE DUTY IS NOT LIABLE ON PNG AND ONLY CNG IS EXCISABLE. 5.4. IN VIEW OF THE DISCUSSION MADE HEREINABOVE, LD .CIT HAS NOT PROPERLY INTERPRETED THE PROVISIONS OF SECTION 145A OF THE ACT IN THE LIGHT OF THE VARIOUS CASE-LAWS CITED BY THE LD.COUNSEL FO R THE ASSESSEE. THE LD.CIT REJECTED THESE DECISIONS ON THE BASIS THAT T HESE ARE PERTAINED TO SECTION 145 BUT NOT TO 145A OF THE ACT. IN THE L IGHT OF THE VARIOUS CASE- LAWS AS DISCUSSED HEREINABOVE, WE ARE OF THE VIEW T HAT THERE IS A CLEAR-CUT MANDATE OF SECTION 145A OF THE ACT THAT THE VALUATI ON OF THE INVENTORY SHOULD BE ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX , DUTY, CESS OR FEE,ETC. ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING TO THE PLACE OF ITS LOCATION AND CONDITION ON THE DATE OF VALUATION. A S PER THIS PROVISION, FIRST OF ALL, IT HAS TO BE SEEN AS TO WHETHER THE T AX HAS BEEN ACTUALLY PAID OR LIABILITY FOR TAX HAS BEEN INCURRED. THE VARIOU S CASE-LAWS CITED BY THE ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 23 - LD.COUNSEL FOR THE ASSESSEE INDICATE THAT EXCISE DU TY, CENVAT, ETC. WOULD BE INCURRED ONLY AT THE POINT OF TIME WHEN TH E GOODS ARE REMOVED AND THE SAME ARE READY FOR DELIVERY OF SALE. UNDER THESE FACTS, THE TAX OR DUTY WILL HAVE TO BE DEBITED TO THE P&L ACCOUNT AND IT WOULD BE ALSO BE ADDED TO THE VALUE OF THE INVENTORY. IN THE PRESE NT CASE, THE ASSESSEE IS ABLE TO DEMONSTRATE THAT SUCH TAXES HAVE NEITHER BE EN DEBITED TO THE P&L ACCOUNT NOR LIABILITY HAS BEEN INCURRED, THEREFORE, AS PER MATCHING CONCEPT OF ACCOUNTANCY SUCH ASSUMED TAX CANNOT BE A DDED TO THE VALUE OF INVENTORY. AFTER CONSIDERING ALL ASPECTS OF THE MATTER, WE FIND THAT LD.CIT WAS NOT JUSTIFIED IN HOLDING THAT THE CASE-L AWS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE PERTAIN TO THE DIFFEREN T PROVISIONS OF THE ACT. HOWEVER, AS DISCUSSED HEREINABOVE, THE HONBLE MADH YA PRADESH HIGH COURT, HONBLE BOMBAY HIGH COURT AND THE HONBLE IT AT ALLAHABAD HAVE INTERPRETED THE PROVISIONS OF SECTION 145A OF THE ACT. IN VIEW OF THIS, WE HEREBY SET ASIDE THE ORDER OF THE LD.CIT A ND HOLD THAT THE ASSESSMENT ORDER DATED 28/12/2010 PASSED BY THE AO IS NOT ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF REVENUE. THUS, GRO UNDS RAISED IN ASSESSEES APPEAL ARE ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD /- ( .. ) ( ) '# ( T.R. MEENA ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 09/ 01 /2014 ..&, .&../ T.C. NAIR, SR. PS ITA NO.1382/AHD /2013 ADANI GAS LTD. VS. DCIT ASST.YEAR 2008-09 - 24 - '4 0 -7 8'7( '4 0 -7 8'7( '4 0 -7 8'7( '4 0 -7 8'7(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-CONCERED 5. 7: -& , , / DR, ITAT, AHMEDABAD 6. :;' <1 / GUARD FILE. '4& '4& '4& '4& / BY ORDER, .7 - //TRUE COPY// = == =/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..31.12.13/2.1.14 (DICTATION-PAD 16+5PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2.1.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.9.1.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.1.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER