The DCIT, Circle-3(1)(1), Ahmedabad V. M/s. Patel Alloy Steel Co. Pvt. Ltd., Ahmedabad

ITA 2340/AHD/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5300 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-04-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 25-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Maximum Marginal Rate; Question of law
• Section: 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER THE DCIT, CIRCLE-3(1)(1), AHMEDABAD (APPELLANT) VS M/S. PATEL ALLOYS STEEL PVT. LTD. 297/300, PHASE-II, GIDC VATVA, AHMEDABAD-382440 PAN: AABCP2984J (RESPONDENT) REVENUE BY: SHRI L.P. JAIN, SR. D.R. ASSESSEE BY: SHRI TUSHAR HEMANI, SR . A.R. WITH SHRI P.B. PARMAR, A.R. DATE OF HEARING : 07-01-2021 DATE OF PRONOUNCEMENT : 01-02-2021 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS REVENUES APPEAL FOR A.Y. 2014-15, ARISES FROM ORDER OF THE CIT(A)-7, AHMEDABAD DATED 31-08-2017, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL:- 1. THE CIT[A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.1,53,66,002/- MODE ON ACCOUNT OF DISALLOWANCE OF REMUNERATION PAI D TO DIRECTORS. 2. THE CIT[A] HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.27,78,372/- MADE ON ACCOUNT OF REVALUATION OF STOCK U/S. 145A O F THE ACT. 3. THE CIT[A] HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ITA NO. 2340 /AHD/2017 ASSESSMENT YEAR 2014-15 ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 2 OSSESSEE HAS SOUGHT TO TAKE THE BENEFIT OF ADDITION TO CLOSING STOCK IN AY 2013-14 IN THE OPENING STOCK OF AY 2014-15 BUT HAD NOT ACCEPTED TH E ADDITION TO THE CLOSING STOCK MADE IN AY 2013-14. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. COMMISSIONER OF INCOME-TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER IN RESPECT OF ABOVE ISSUES. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX [A] MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME D ECLARING INCOME OF RS. 3,78,66,410/- AND BOOK PROFIT OF RS. 5,43,19,105/- WAS FILED ON 14 TH NOV, 2014. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 1 ST SEP, 2015. THE ASSESSEE IS ENGAGED IN THE BUSINES S OF MANUFACTURING OF DIFFERENT TYPES OF CASTINGS AND CAPITAL GAIN. THE ASSESSING OFFICER HAS FINALIZED THE ASSESSMENT ON 2 9 TH DECEMBER, 2016 U/S. 143(3) OF THE ACT AT RS. 5,60,10,784/- AFTER MAKING ADDITION ON ACCOUNT OF DISALLOWANCE OF DIRECTORS REMUNERATION U/S. 40A(2) (B) OF THE ACT TO THE AMOUNT OF RS. 1,53,66,002/- AND ADDITION OF RS. 27, 78,372/- U/S. 145A OF THE ACT ON THE ISSUE OF NON INCLUSION OF UNUTILSIED CEN VAT CREDIT IN THE CLOSING STOCK. AGGRIEVED ASSESSEE HAS FILED APPEA L BEFORE THE LD. CIT(A) AGAINST THE AFORESAID DISALLOWANCE AND ADDITION MAD E BY THE ASSESSING OFFICER U/S. 143(3) OF THE ACT. THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE REVENUE HAS CONTESTED BOTH THE ISSUE S OF DELETING THE ADDITIONS IN THE INSTANT APPEAL. THE RELEVANT FACTS PERTAINI NG TO THE ISSUES IN THE APPEAL ARE DISCUSSED WHILE ADJUDICATING THE GROUNDS OF APP EAL OF THE REVENUE AS FOLLOWS:- GROUND NO. 1 & 4 ( DISALLOWANCE OF REMUNERATION PA ID TO DIRECTORS) 4. DURING THE COURSE OF ASSESSMENT, THE ASSES SING OFFICER NOTICED THAT ASSESSEE COMPANY HAS PAID REMUNERATION TO ITS DIREC TOR SHRI ABHISHEK K. JAVERI TO THE AMOUNT OF RS. 1,63,08,202/- DURING TH E FINANCIAL YEAR 2013-14. ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 3 THE ASSESSING OFFICER STATED THAT THE ABOVE NAMED D IRECTOR HAS JOINED THE COMPANY IN ASSESSMENT YEAR 2005-06 WHEN THE BASIC R EMUNERATION OF RS. 4.5 LACS WAS PAID TO HIM AND THERE HAS BEEN INCREASED O F REMUNERATION OF ALMOST 36 TIMES IN THE SPAN OF 6-7 YEARS. THE ASSESSING O FFICER POINTED OUT THAT IN ASSESSMENT YEAR 2010-11 BECAUSE OF UNREASONABLENESS IN PAYMENT OF REMUNERATION ADDITION OF RS. 3,81,99,984/- HAD BEEN MADE IN THE CASE OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER ALSO STATE D THAT THIS ISSUE HAS BEEN DISCUSSED IN THE PRECEDING ASSESSMENT THAT THE PAYM ENT MADE TO THE DIRECTOR WAS UNEXCESSIVE AND UNJUSTIFIED. THE ASSESSING OFF ICER ALSO STATED THAT DIRECTORS ARE ALSO PROMOTERS OF THE COMPANY, THE EX TRAORDINARY HIGH REMUNERATION PAID TO THE DIRECTOR CANNOT BE HELD RE ASONABLE WITH REGARD TO THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. HO WEVER KEEPING THE INFLATION TREND IN MIND, THE ASSESSING OFFICER HAS HELD THAT INCREASE OF 10% IN THE REMUNERATION EVERY YEAR IS REASONABLE AND JU STIFIED. THEREFORE, THE ASSESSING OFFICER HAS MADE DISALLOWANCE TO THE AMOU NT OF RS. 1,53,66,002/- OUT OF THE REMUNERATION PAID TO SHRI ABHISHEK K. JA VERI U/S. 40A(2)(B). 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE T HE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE ITAT IN THE CASE OF THE AS SESSEE ITSELF FOR ASSESSMENT YEAR 2008-09 VIDE ITA NO. 857 AND 1213/A HD/2018 DATED 8 TH APRIL, 2016. THE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS DISCUSSED AS UNDER:- 4.2 1 HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. IT IS SEEN THAT THE AO HAS MADE T HE IMPUGNED ADDITION PRIMARILY BECAUSE THE SAME DISALLOWANCE WAS ALSO MADE IN THE ASSESSMENTS FOR ASST. YEARS 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13. THE HON'BLE ITAT 'C' BENCH, AHM EDABAD IN 1TA NOS. 857 & 1213/AHD/2012 DATED OH.04.2016 IN THE APPELLANT'S O WN CAST; FOR ASST. YEAR 2008-09 HAS HELD AS UNDER: ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 4 '11. ID. AUTLIORI7ED REPRESENTATIVE STALES THAT THE THERE IS NO DISPUTE ABOUT GENUINENESS OF THE IMPUGNED REMUNERATIONS. IT'S A QUESTION OF EXCE SSIVE ELEMENT THEREIN. IT IS SUBMITTED THAT ASSESSEE'S PAYEES/DIRECTOR HAVE ALREADY PAID T AXES THEREUPON AT THE MAXIMUM MARGINAL RATE. THE ASSESSEE EXPLAINS THAT THE IMPUG NED BENCHMARKING HAS BEEN DRAWN W.E.F. FINANCIAL YEAR 2003-04 AND NOT FROM PRECEDIN G ASSESSMENT YEAR. AND THAT NO COMPARABLE INSTANCE HAS BEEN QUOTED AS WELL IN THE LOWER ORDER EXCEPT FOLLOWING INFLATION I.T.A NOS.1961,857 , 12L3 , 26L7,2921 & CO 210/AHD/2012 A.Y. 2004-05, 08-09 & 09-10 PAGE NO ACIT VS. M/S. PATEL ALLOY STEEL PVT. LTD 11 RATE @ 10% (SUPRA). CASE LAW OF (2014) 45 TAXMUN.COM 478 (GUJ) (CIT VS. INDU NISAAN OXO CHEMICAL INDUSTRIES LTD. UPHOLDING TRIBUNAL'S FINDING THAT WHERE THE CO MPANY LAW HOARD HAS ALREADY AUTHORIZED SUCH REMUNERATION AND RECIPIENT PAID TUX ES AT MAXIMUM RATE DOES NOT RESULT IN SECTION 40A(2)(H) DISALLOWANCE; IS CITED IN SUPP ORT. L.D. DR REPRESENTING REVENUE PRAYS FOR RESTORATION OF THE ENTIRE DISALLOWANCE FI GURE. 12. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL CONTENTIONS. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER HAS COMPARED THE IMPUGNE D REMUNERATION WITH THAT PAID IN FY 2003-04. HE GIVES ANNUAL 10% INCREASE. WE FIND THIS APPROACH TO BE ENTIRELY UNSUSTAINABLE. ASSESSEE'S REMUNERATIONS IN PRECEDIN G ASSESSMENT YEARS ALREADY STAND ACCEPTED. THERE IS NO JUSTIFICATION TO DRAW THE CLO CK BACK TO FINANCIAL YEAR 2003-04 IN SUCH A CASE. WE FURTHER DO NOT. NOTICE COMPARISON O F THE IMPUGNED REMUNERATION VIS-A- VIS MARKET RATE EITHER IN ASSESSMENT OR IN THE LOWE R APPELLATE ORDER SO AS TO POINT OUT ANY EXCESSIVENESS CLEMENT. HON'BLE JURISDICTIONAL HIGH COURT IN ITS DECISION HEREINABOVE HAS ALREADY HELD THAT SECTION 10A(2)(H) DISALLOWANCE IS NOT TO HE INVOKED WHEN THE PAYEES ALREADY STAND ASSESSED AT MAXIMUM RATE. THE CENTRAL BOARD OF DIRECT TAXES HAS ALSO ISSUED A CIRCULAR ON 06-07-1968 DIRECTING THE ASSES SING AUTHORITY NOT TO INVOKE THE IMPUGNED DISALLOWANCE IN ABSENCE OF ANY TAX EVASION BEING NOTICED. WE QUOTE TILL THIS REASONING FOR ACCEPTING ASSESSEE'S ARGUMENTS AGAINS T THE IMPUGNED SECTION 40A(2)(B) DISALLOWANCE. THE REVENUE'S CORRESPONDING GROUND IS REJECTED. THE I.T.A NOS.L961,857,1213,2617,2921 & CO 210/AM/2012 A.Y. 2 004-05, 08-09 & 09-10 PAGE NO ACIT VS. M/S. PATEL ALLOY STEEL PVT. LTD 12 ASSE SSING OFFICER IS DIRECTED TO DELETE THE ENTIRE DISALLOWANCE SUM OF RS. 3,21,96,741/-.' 4.2.1 FURTHER, THE ID CIT(A) VIDE HIS ORDER NO. CIT (A)-9/364/DCLT-CIR-3(L)(1)/15-L6 DATED 03.08.2016 FOR AY 2013-14 AFTER CONSIDERATION OF TH E ORDER OF THE HON'BLC ITAT TILED SUPRA, HAS DELETED THE ADDITION AND ALLOWED THE APPELLANT'S AP PEAL MADE ON THE IDENTICAL GROUND. RESPECTFULLY FOLLOWING THE ORDER OF THE HON'BLE ITAT AND IN VIEW OF THE DECISION IN THE APPELLANT'S OWN CASE FOR EARLIER YEARS BY THE CIT(A), ADDITION OF RS.1,53,66 ,002/- MADE BY THE ASSESSING OFFICER IS DELETED. GROUNDS OF APPEAL NOS. 1& 2 ARE ALLOWED. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS B EFORE US, THE LD. COUNSEL HAS CONTENDED THAT THE ISSUE IN THE APPEAL IS COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO-ORDINATE BENCH O F THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEARS. THE LD. COUNSEL HA S ALSO CONTENDED THAT THE ORDER OF THE HONBLE ITAT HAS ALSO BEEN CONFIRMED B Y THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT (2019) 103 TAX MAN.COM 434 (GUJ) AND ALSO BY THE HONBLE SUPREME COURT VIDE (2019) 103 T AXMAN.COM 432. THE LD. DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH NOT TO CONTROVERT THESE ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 5 UNDISPUTED FACT THAT THE ISSUE IN THE APPEAL IS COV ERED BY THE DECISION OF JUDICIAL PRONOUNCEMENT AS REFERRED BY THE LD. COUNS EL. 7. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THR OUGH THE JUDICIAL PRONOUNCEMENT IN THE CASE OF THE ASSESSEE ON THE SI MILAR ISSUE AND FACTS ADJUDICATED BY THE CO-ORDINATE BENCH OF THE ITAT. THE LD. CIT(A) HAS DISCUSSED THE FINDINGS OF ITAT FOR A.Y. 2008-09 IN HER DECISION AS ELABORATED SUPRA IN THIS ORDER. THE CO-ORDINATE BEN CH OF THE ITAT HAVE ADJUDICATED THE SIMILAR ISSUE IN FAVOUR OF THE ASSE SSEE FOR OTHER ASSESSMENT YEARS I.E. ASSESSMENT YEAR 2008-09 ITA NOS. 857 & 1213/AHD/2012, ASSESSMENT YEAR 2009-10 ITA NOS. 2617 & 2921/AHD/2 012, ASSESSMENT YEAR 2012-13 ITA NOS. 3158 & 3340/AHD/2015 AND ASSE SSMENT YEAR 2013- 14 ITA NO. 2817/AHD/2016. IT IS FURTHER NOTICED T HAT HONBLE JURISDICTIONAL HIGH COURT VIDE HAS ALSO ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDING OF JURISDICTIONAL HIGH COURT I S REPRODUCED AS UNDER:- 5.2 NOW, SO FAR AS THE IMPUGNED ORDER PASSED BY TH E LEARNED TRIBUNAL DELETING THE DISALLOWANCE UNDER SECTION 40A(2)(B) ON ACCOUNT OF THE EXCESS RE MUNERATION TO THE DIRECTORS IS CONCERNED, AT THE OUTSET IT IS REQUIRED TO BE NOTED THAT MAKING D ISALLOWANCE UNDER SECTION 40A(2)(B) ON ACCOUNT OF EXCESS REMUNERATION TO DIRECTORS, THE ASSESSING OFFICER CONSIDERED THE REMUNERATION PAID TO THE DIRECTORS IN THE YEAR 2004-05 THOUGH IN THE PRE CEDING ASSESSMENT YEAR I.E. AY 2007-08 THE REMUNERATION PAID TO THE DIRECTORS WAS RS.3,25,65,3 15/- AGAINST THE REMUNERATION PAID IN THE CURRENT YEAR AT RS.4,31.00.600/-. IT IS NOT IN DISP UTE THAT THE ASSESSEE'S REMUNERATION IN THE PRECEDING ASSESSMENT YEARS STAND ACCEPTED. THEREFOR E, THE LEARNED TRIBUNAL RIGHTLY OBSERVED THAT IN VIEW OF THE MATTER THE ASSESSING OFFICER WAS NOT JUSTIFIED IN COMPARING THE IMPUGNED REMUNERATION WITH THAT PAID IN AY 2004-05. THE LEAR NED COUNSEL APPEARING ON BEHALF OF THE REVENUE IS NOT IN A POSITION TO DISPUTE THAT IN AY 2007-08 (FY 2006-07) THE REMUNERATION PAID WAS RS.3,25,65,315/- TO THE DIRECTOR SHRI K.H. JHAV ERI, WHICH WAS ACCEPTED. THEREFORE, LOOKING TO THE INCREASE IN THE PROFIT AND THE BUSINESS WHEN IN THE SUBSEQUENT YEAR I.E. YEAR IN CONSIDERATION THE LEARNED TRIBUNAL ACCEPTED THE REMUNERATION PAID TO THE DIRECTOR AS ADMISSIBLE, IT CANNOT BE SAID THAT THE LEARNED TRIBUNAL HAS COMMITTED ANY ER ROR. THE LEARNED TRIBUNAL HAS RIGHTLY OBSERVED THAT ONCE THE REMUNERATION PAID IN THE PRECEDING YE AR WAS ACCEPTED BY THE REVENUE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN CONSIDERING AND/OR COM PARING THE REMUNERATION PAID IN AY 2004-05. WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE LEARNED TRIBUNAL. NO SUBSTANTIAL QUESTION OF LAW ARISE. ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 6 HONBLE SUPREME COURT HAS ALSO UPHELD THE DECISION OF HONBLE HIGH COURT VIDE ORDER (2019) 131 TAXMAN.COM 432 (SC). THE REL EVANT PART OF DECISION IS AS UNDER:- SECTION 40A(2) OF THE INCOME-TAX ACT, 1961 - BUSIN ESS DISALLOWANCE - EXCESSIVE OR UNREASONABLE PAYMENTS (SALARIES TO DIRECTORS) - ASS ESSMENT YEAR 2008-09 - FOR RELEVANT YEAR, ASSESSEE FILED ITS RETURN DECLARING CERTAIN T AXABLE INCOME - IN COURSE OF ASSESSMENT, ASSESSING OFFICER NOTED THAT THERE WAS AN EXTRAORDINARY INCREASE IN SALARY PAID TO DIRECTORS AS COMPARED TO SAID PAYMENTS MADE IN ASSESSMENT YEAR 2004-05 - ASSESSING OFFICER THUS MADE CERTAIN DISALLOWANCE UN DER SECTION 40A(2)(B) OUT OF RENUMERATION PAID TO DIRECTORS OF ASSESSEE-COMPANY - TRIBUNAL TOOK A VIEW THAT ONCE RENUMERATION PAID IN PRECEDING YEAR WAS ACCEPTED BY REVENUE, ASSESSING OFFICER WAS NOT JUSTIFIED IN CONSIDERING AND COMPARING RENUMERA TION PAID IN ASSESSMENT YEAR 2004-05 - TRIBUNAL THUS DELETED DISALLOWANCE MADE UNDER SEC TION 40A(2) - HIGH COURT UPHELD ORDER PASSED BY TRIBUNAL - WHETHER, ON FACTS, SLP F ILED AGAINST DECISION OF HIGH COURT WAS TO BE DISMISSED - HELD, YES [PARA 3] [IN FAVOUR OF ASSESSEE] IN VIEW OF THE ABOVE FACTS AND FINDING AFTER RESPEC TFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT AND H ONBLE HIGH COURT OF GUJARAT AND HONBLE SUPREME COURT AS CITED SUPRA , THIS GROUND OF APPEAL OF THE REVENUE STANDS DISMISSED. GROUND NO. 2 & 3 (DELETING THE ADDITION OF RS. 27,7 8,372 U/S. 145A) 8. AT THE TIME OF ASSESSMENT, THE ASSESSING OFFIC ER NOTICED THAT ASSESSEE COMPANY HAS FOLLOWED EXCLUSIVE METHOD OF ACCOUNTING AS AGAINST INCLUSIVE METHOD PRESCRIBED U/S. 145A OF THE ACT. UNDER THE AFORESAID OBSERVATION, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT SHOWN UNUTILIZED CENVAT CREDIT OF RS. 27,78,372/- IN ITS INCOME. ON QUERY, THE ASSESSEE EXPLAINED THAT IT HAS BEEN FOLLOWING EXCLUSIVE METH OD OF ACCOUNTING THEREFORE THE VALUE OF CLOSING STOCK WAS SHOWN AT N ET OF TAX, DUTY, CESS, ETC. AND ALSO FURNISHED STATEMENT OF ACCOUNTS SHOWING TH AT THERE WAS NO EFFECT ON PROFIT DUE TO FOLLOWING THE EXCLUSIVE METHOD OF ACC OUNTING REGULARLY FROM YEAR TO YEAR. HOWEVER, THE ASSESSING OFFICER HAS N OT AGREED WITH THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF RS . 27,78,372/- IN THE TOTAL ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 7 INCOME OF THE ASSESSEE IN RESPECT OF UNUTILIZED CEN VAT CREDIT REFERRING THAT SIMILAR ADDITION WERE MADE IN THE PRECEDING ASSESSM ENT YEARS. 9. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE ADDITION AFTER REFERRING THE DECISION OF CO-ORDINATE BENCH OF THE ITAT VIDE ITA NO. 857 AND 1213/AHD/202 0 DATED 08-04-2016 IN THE CASE OF THE ASSESSEE. THE RELEVANT PART OF T HE DECISION OF THE LD. CIT(A) IS AS UNDER:- 5.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. IT IS SEEN THAT THE AO HAS MADE T HE IMPUGNED ADDITION PRIMARILY BECAUSE THE SAME DISALLOWANCE WAS ALSO MADE IN THE ASSESSMENTS FOR ASST. YEARS 2008-09 , 2009-10, 2010-11, 2011-2 & 2012-13. THE HON'BLE ITAT 'C' BENCH, AHMED ABAD IN ITA NOS. 857 & 1213/AHD/2012 DATED 08.04.2016 IN THE APPELLANT'S OWN CASE FOR AS ST. YEAR 2000-09 HAS HELD ASUNDER: '25. THE REVENUE STRONGLY SEEKS TO RESTORE ASSESSIN G OFFICER'S FINDINGS, LD. AUTHORIZED, REPRESENTATIVE POINTS OUT THAT THE ASSESSEE FOLLOWS EXCLUSIVE METHOD OF ACCOUNTING MEANING THEREBY THAT IF THE IMPUGNED ADDITION IS RE STORED, IT WOULD BE AGAIN A REVENUE NEUTRAL ACTION AS HELD IN THE LOWER APPELLATE FINDI NGS. HE QUOTES HON'BLE JARISDICTIONAL HIGH COURT DECISION IN TAX APPEAL NO. 436 AND 437/2 011 CIT VS. BELL GRANITO CERAMICA DATED 13-96-2012 FOLLOWING ITS EARLIER JUDGMENT ACI T VS. NARMADA CHEMATOR PETRO- CHEMICALS LTD. (2010) 233 CTR 265 (GUJ) REJECTING R EVENUE'S SUBSTANTIAL QUESTION FRAMED IN CHALLENGING TRIBUNAL'S ORDER THAT NO SUCH ADDITION COULD BE MADE ON ACCOUNT OF EXCISE DUTY TO CLOSING STOCK UNLESS A BALANCING I.T .A NOS.1961,857,1213.2617,2921 & CO 210/AHD/2012 A.Y. 2004-05, 08-09 & 09-10 PAGE NO ACIT VS. M/S. PATEL ALLOY STEEL PVT. LTD 27 DEDUCTION IS ALLOWED IN P& L ACCOUNT. A ND ALSO THAT IF CENTRAL EXCISE DUTY IS NOT DUE AND PAYABLE, THE SAME CANNOT HE CONSIDERED AS COST TO RAW MATERIAL AS WELL AS FINISHED, GOODS APPEARING IN THE CLOSING STOCK, LD. DR JAILS IN POINTING OUT ANY EXCEPTION TO THIS PRINCIPLE. WE FOLLOW THE SAME FOR UPHOLDING THE LOWER APPELLATE FINDINGS UNDER CHALLENGE. THIS THIRD SUBSTANTIVE GROUND IS ALSO DE CLINED. REVENUE'S APPEAL ITA 1213/AHD/2012 IS DISMISSED.' FURTHER, THE ID CIT(A) VIDE HIS ORDER NO. CIT(A)-9/ 364/DCIT-CIR-3(L)(L)/15-]6 DATED 03.08.2016 FOR AY 2013-14 AFTER CONSIDERATION OF THE ORDER OF THE HON'BLE 1TAT CITED .SUPRA, HAS DELETED THE ADDITION AND ALLOWED THE APPELLANT'S APPEAL MADE ON THE IDENTICAL GROUND. RESPECTFULLY FOLLOWING THE ORDER OF THE HON'BLE 1TAT AND IN VIEW OF [LIE D ECISION IN THE APPELLANT'S OWN CASE FOR EARLIER YEARS BY THE CIT(A), THE ADDITION OF RS.27,78,372/- MADE U/S 145A OF THE ACT IS DELETED. GROUNDS OF APPEAL NOS. 3, 4 & 5 ARE ALLOWED. 10. DURING THE COURSE OF APPELLATE PROCEEDINGS BE FORE US THE LD. COUNSEL HAS CONTENDED THAT IDENTICAL ISSUE ON SIMILAR FACTS HAV E BEEN ADJUDICATED BY THE CO-ORDINATE BENCH OF THE ITAT IN FAVOUR OF THE ASSE SSEE FOR ASSESSMENT YEARS I.E. ASSESSMENT YEAR 2008-09 ITA NOS. 857 & 1 213/AHD/2012, ITA NO. 2340/AHD/2017 A.Y. 2014-15 DCIT VS. M/S. PATEL ALLOY STEEL PVT. LTD. 8 ASSESSMENT YEAR 2009-10 ITA NOS. 2617 & 2921/AHD/20 12, ASSESSMENT YEAR 2012-13 ITA NOS. 3158 & 3340/AHD/2015 AND ASSESSMEN T YEAR 2013-14 ITA NO. 2817/AHD/2016. THE LD. DEPARTMENTAL REPRESE NTATIVE IS FAIR ENOUGH NOT TO CONTRADICT THESE UNDISPUTED FACT THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF HONBLE ITAT. 11. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE ITAT AS ELABORATED IN THE FINDING OF LD. CIT(A), WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE, THEREFORE, THE SAME STANDS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01-02-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 01/02/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,