The ACIT,(OSD)-I, Circle-4, Ahmedabad V. Jagdish Aluminium Pvt.Ltd., Ahmedabad

ITA 2134/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76731 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 29-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 43B; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 2134/AHD/2011) (ASSESSMENT YEAR: 2005-06) THE ACIT, (OSD)-1, CIRCLE- 4, AHMEDABAD V/S JAGDISH ALUMINIUM PVT. LTD. PLOT NO 1 SUBH LAKSHMI ESTATE, SARKHEJ VAVLA HIGHWAY, TA-SANAND VILL- MARAIYA AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACJ 3833H APPELLANT BY : SHRI P.L. KUREEL, SR. D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 29-05-2014 DATE OF PRONOUNCEMENT : 06 -06-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-VIII, AHMEDABAD DATED 02.06.2011 FOR A.Y. 2005-06. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER AN ADJOURNMENT APPLICATION WAS SUBMITTED BUT THE SAME WAS REJECTED AND THE CASE WAS DECIDED ON MERITS EX-PARTE QUA THE ASSESSEE. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. ITA NO 2134/AHD/2011 . A.Y. 2005- 06 2 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF MANUFACTURING OF ALUMINIUM COILS, FOILS, SHEETS AND TRADING OF ALUMINIUM COILS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 05-06 ON 24.10.2005 DECLARING TOTAL INCOME OF RS. 22,24,930/-. THE ASS ESSMENT WAS INITIALLY FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 31.12. 2007 AND LATER ON THE CASE WAS RE-OPENED AND ORDER WAS PASSED UNDER SECTI ON 143(3) READ WITH SECTION 147 ON 29.10.2009 DETERMINING REVISED TOTAL INCOME AT RS. 28,23,270/-. THE CASE WAS AGAIN RE-OPENED BY ISSUI NG NOTICE UNDER SECTION 148 AND THEREAFTER THE ASSESSMENT WAS FRAME D UNDER SECTION 143(3) READ WITH 147 VIDE ORDER DATED 12.11.2010 AN D THE TOTAL INCOME WAS DETERMINED AT RS. 42,65,312/-. AGGRIEVED BY TH E ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) V IDE ORDER DATED 02.06.2011 GRANTED RELIEF TO THE ASSESSEE. AGGRIEVE D BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETED THE ADDITION ON ACCOUNT OF UNUTILIZED CENVAT CREDIT OF RS. 13,61,234/- WITHOUT APPRECIATI NG THE PROVISIONS OF SECTION 145A OF THE INCOME TAX ACT. 5. A.O NOTICED THAT ASSESSEE WAS HAVING UNUTILIZED BAL ANCE OF CENVAT OF RS. 13,61,234/-. A.O WAS OF THE VIEW THAT SINCE TH E ASSESSEE WAS FOLLOWING EXCLUSIVE METHOD OF ACCOUNTING IN RESPECT OF EXCISE DUTY, UNUTILIZED BALANCE OF CENVAT WAS REQUIRED TO BE CRE DITED TO THE PROFIT AND LOSS ACCOUNT. A.O WAS FURTHER OF THE VIEW THAT WHEN THE ASSESSEE WAS FOLLOWING EXCLUSIVE METHOD IT WAS THE RESPONSIB ILITY OF ASSESSEE TO PRODUCE THE RECONCILIATION OF ACCOUNT RELATING TO V ALUATION OF CLOSING STOCK. A.O HAS NOTED THAT RECONCILIATION STATEMENT WAS NOT SUBMITTED BY THE ASSESSEE. HE FURTHER NOTED THAT WHETHER THE PAY MENT OF EXCISE DUTY ITA NO 2134/AHD/2011 . A.Y. 2005- 06 3 WAS MADE BY THE ASSESSEE WAS NOT AVAILABLE AND HE T HEREFORE ADDED THE UNUTILIZED CENVAT BALANCE TO THE TOTAL INCOME OF TH E ASSESSEE. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION MADE BY A.O. BY HOLDING AS UND ER:- 4.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE A.O AS WELL AS THE SUBMISSION OF THE APPELLANT. THE ASSESSEE IS FOLLOWING THE EXCLUSIVE METHOD OF EXCISE DUTY AND THE ASSESSEE HAD ALREADY SUBMITTED THE RECONCILIATION STATEMENT ALONG WITH THE INCOME TAX RETURN. THE LEARNED AR HAS ALSO REPRODUCED THE RELEVANT COPY OF THE TAX AUDIT REPORT FILED BY HIM AND IT IS EVIDENT THAT THE APPELLANT HAS CORRECTLY RECONCILED THE POSITION OF VALUATION OF THE STOCKS AS PER THE INCLUSIVE METHOD AND EXCLUSIVE METHOD AS CO NTEMPLATED UNDER SECTION 145A OF THE ACT. AGAIN, I FIND CONSIDERABLE MERIT IN THE ARGUME NT OF THE LEARNED AR THAT THE CENVAT CREDIT RECEIVABLE HAS ALREADY BEEN CREDITED TO THE RAW MATERIAL PURCHASE ACCOUNT AND THUS TO THAT EXTENT THE VALUE OF RAW MATERIAL PURCHASE HAS BEEN REDUCED. AGAIN, IT IS EVIDENT THAT AS PER THE RECONCILIATION STATEMENT BETWEEN THE INCLUS IVE AND EXCLUSIVE METHOD, THERE IS NO IMPACT ON THE NET POSITION OF THE PROFIT OF THE APP ELLANT. AGAIN, AS PER THE NORMAL ACCOUNTING PRACTICE FOLLOWED BY THE APPELLANT THE UNUTILIZED C REDIT OF THE CENVAT ACCOUNT IS ADJUSTED AGAINST THE EXCISE DUTY PAYABLE IN RESPECT OF THE S ALES MADE BY THE APPELLANT ON A NORMAL BASIS AND HENCE THE QUESTION OF APPLICABILITY OF SE CTION 43B IN THIS CASE BECOMES IRRELEVANT. THEREFORE, THERE IS NO NEED TO ASCERTAIN OR VERIFY AS TO WHETHER THE CENVAT CREDIT HAS BEEN PAID FOR THE PURPOSE OF SECTION 43B AS MENTIONED BY THE LEARNED A.O IN THE ASSESSMENT ORDER. THUS, THIS GROUND OF APPEAL IS DECIDED IN TH E FAVOUR OF THE APPELLANT, AND THE PROPOSED ADDITION OF RS. 13,61,234/- MADE BY THE A.O IS DELE TED. 6. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. BEFORE US LD. D.R. RELIED ON THE ORDER OF A.O. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT ASSESSEE WAS FOLLOWING EXCLUSIVE METHOD OF EXCISE DUTY AND H AD ALREADY SUBMITTED THE RECONCILIATION STATEMENT ALONG WITH T HE RETURN OF INCOME. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAS CO RRECTLY RECONCILED THE ITA NO 2134/AHD/2011 . A.Y. 2005- 06 4 POSITION OF VALUATION OF STOCK AS PER THE INCLUSIVE METHOD AND EXCLUSIVE METHOD AS CONTEMPLATED UNDER SECTION 145A OF THE AC T AND ON PERUSAL OF RECONCILIATION STATEMENT BETWEEN THE INCLUSIVE AND EXCLUSIVE METHOD OF ACCOUNTING THERE WAS NO IMPACT ON THE NET POSITION OF THE PROFIT OF ASSESSEE. HE HAS FURTHER NOTED THAT THE UNUTILIZED CREDIT OF CENVAT ACCOUNT WAS ADJUSTED AGAINST THE EXCISE DUTY PAYABL E IN RESPECT OF SALES MADE AND THEREFORE THE QUESTION OF APPLICABILITY OF SECTION 43B BECOMES IRRELEVANT. BEFORE US, THE REVENUE COULD NOT CONTRO VERT THE FINDINGS OF CIT(A) BY BRINGING ANY CONTRARY MATERIAL ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06 - 06 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD