ACIT CC-34, MUMBAI V. NITCO TILES LTD, MUMBAI

ITA 1599/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3616 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 02-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Keywords: Rule of consistency
• Section: 143(3); 260A; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI RAJENDRA SINGH,(AM) ITA NO.1599/MUM/2010 ASSESSMENT YEAR : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-46 ROOM NO.658, 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-20. ..( APPELLANT ) VS. M/S. NITCO TILES LTD. 85-86, MAKER CHAMBERS III NARIMAN POINT MUMBAI-21. ..( RESPONDENT ) P.A. NO. (AAACN 1674 N) APPELLANT BY : SHRI HARI GOVIND SINGH RESPONDENT BY : NONE O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 14.12.2009 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING AND SALE OF DIFFERENT KINDS OF TILES, FILED RETURN DECLARING TOTAL LOSS OF RS.1,06,93,546/-. IT HA S ALSO WORKED OUT BOOK PROFIT AT RS.23,29,96,594/- AS PER SPECIAL PROVISIO NS OF SEC.115JB ITA NO.1599/M/10 A.Y:06-07 2 OF THE INCOME TAX ACT, 1961(THE ACT). DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSING OFFICER OBSERVED THAT THER E IS A BIG DIFFERENCE BETWEEN THE SALE PRICE OF VARIOUS KINDS OF MARBLES. ON FURTHER EXAMINATION THE ASSESSING OFFICER OBSERVED THAT T HE ASSESSEE COMPANY HAS SOLD ABOUT 80% OF ITS MARBLES AS AN INSTITUTIO NAL SALES @ RS.217.72 PER SQ.FT., THEREFORE, THERE IS NO REASON WH Y SUCH RATE COULD NOT BE REALISED FROM SALES TO OTHERS AND IN PARTICULARS F ROM ITS OWN RELATED PARTIES I.E. MAHARASHTRA MARBLE COMPANY WHOSE PROPRIETOR IS DIRECTOR OF THE COMPANY. IT CANNOT BE INFERRED THAT O NLY INSTITUTIONAL BUYERS HAVE OPTED FOR EXCLUSIVE QUALITY OF THE MARBLE HAVING GREATER REALISATION RATE. ALSO, THE RATE OF RS.217.72 PER SQ. FT. IS AVERAGE RATE. THIS MEANS THAT SOME QUANTITY HAS FETCHED VALUE MORE TH AN THIS RATE. UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER AFTER CONSIDERIN G THE ASSESSEE'S EXPLANATION IN THIS REGARD, THEREFORE, REJECTE D THE BOOK RESULTS OF THE ASSESSEE AND APPLIED AVERAGE SALE VALUE OF RS.217.72 PER SQ.FT. TO THE ENTIRE SALE OF MARBLE AND THEREBY W ORKED OUT THE TOTAL AMOUNT OF SALES RS.6,24,36,531/- (RS.217.72 X 286774.44 SQ.FT.) AS AGAINST RS.5,27,02,304/- AND HENCE HE ADDED THE DIFFE RENCE RS.97,34,227/- TO THE INCOME OF THE ASSESSEE AS SUPPRESSED SAL ES. THE ASSESSING OFFICER AFTER MAKING SOME OTHER DISALLOWANCES COMPLETED THE ASSESSMENT UNDER NORMAL PROVISIONS RS.9,61,6 80/- AND U/S.115JB RS.23,29,96,594/-, VIDE ORDER DATED 23.12.2 008 PASSED UNDER SECTION 143(3) OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) FOLLOWING THE TRIBUNAL ORDER IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 2001-02 AND 2002- 03 AND ORDER OF HIS PREDECESSOR FOR THE ASSESSMENT YEAR 2005-0 6 AND KEEPING IN VIEW THE RULE OF CONSISTENCY DELETED THE AD DITION MADE BY THE ASSESSING OFFICER. ITA NO.1599/M/10 A.Y:06-07 3 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE RELIE F IN FULL RELATING TO THE ADDITION OF RS.97,34,227/- MADE ON ACCOUNT OF THE SUPPRESSED SALES IN THE ASSESSMENT ORDER BY APPLYING THE PROVISIONS OF SECTION 145 OF THE I. T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE DECISION OF THE HONBLE ITAT FOR ASSESSMENT YEAR 200 1-02 AND FOR ASSESSMENT YEAR 2002-03 IN ASSESSEE'S OWN C ASE WAS NOT ACCEPTED BY THE DEPARTMENT AND APPEAL FILED U/S. 260A OF THE ACT IS PENDING BEFORE THE HONBLE MUMBAI HIGH COURT. 5. AT THE TIME OF HEARING THE LD. DR WHILE RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITS THAT THERE IS NO DISPUTE THAT THE TRIBUNAL IN THE EARLIER YEARS HAS DECIDED THE SIMILAR ISSUE IN FAV OUR OF THE ASSESSEE, THEREFORE, THE ISSUE MAY BE DECIDED ACCORDINGLY. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE LD. DR A ND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND TH AT THE LD. CIT(A) WHILE DELETING THE ADDITION OF SUPPRESSED SALES OF RS.97 ,34,227/- HAS FOLLOWED THE ORDER OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03. IN THE ABSENCE OF A NY CONTRARY MATERIAL OR DISTINGUISHING FEATURE PLACED ON R ECORD BY THE REVENUE TO SHOW THAT THE SAID ORDER OF THE TRIBUNAL H AS BEEN REVERSED BY THE HON'BLE JURISDICTIONAL HIGH COURT OR NOT APPLI CABLE, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL SUPRA , IN THE ASSESSEE'S OWN CASE, DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) ITA NO.1599/M/10 A.Y:06-07 4 ON THIS ACCOUNT AND ACCORDINGLY THE GROUNDS TAKEN BY THE REVENUE ARE REJECTED. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12.2010. SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15.12.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.