ITO, Erode V. M/s. Senthilkumar Textile Mills Pvt. Ltd., Erode

ITA 2531/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5634 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN

Judgement Text

, C/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2531 /MDS./2016 ( ASSESSMENT YEAR : 2012-13 ) THE INCOME TAX OFFICER, WARD 1(1), ERODE. VS. M/S.SENTHILKUMAR TEXTILE MILLS P LTD., NO.1-D,NMS COMPOUND, ERODE 638 001. PAN AAJCS 0497 B ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.B.SAGADEVAN, JCIT, D.R / RESPONDENT BY : MR.VIJAYARAGHAVAN,ADVOCATE ! ' / DATE OF HEARING : 29.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 21.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-3, CHENNA I DATED 27.5.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. ITA NO. 2531/MDS/2016 2 2. THE GRIEVANCE OF REVENUE IN ITS APPEAL IS WITH REGARD TO DELETION MADE TOWARDS DIFFERENCE IN VALUATION OF FI NISHED GOODS, TRADED GOODS, SUPPRESSION FOR SALE OF FABRIC IN YAR N QUANTITY AND SALES PRICE OF WASTE COTTON. 3. THE LD.D.R SUBMITTED THAT THE VALUATION OF THES E ITEMS ARE DONE AT MARKET PRICE OR COST WHICHEVER IS LOWER. ACCORDI NG TO HIM, THERE WAS A DISCREPANCY IN THE VALUE ADOPTED BY THE ASSES SEE AND HE POINTED OUT THE VALUATION OF STOCK AS FOLLOWS: SL. NO. DESCRIPTION VALUE(RS.) 1 OPENING STOCK 257.00 2 PRODUCTION 240.02 3 SALES 242.20 4 CLOSING STOCK 223.74 ACCORDING TO LD.D.R, THE VALUE OF THE CLOSING STOCK CANNOT BE BELOW THE COST OF PRODUCTION, WHICH IS ` 240.02. 4. ON THE OTHER HAND, LD.A.R SUBMITTED THAT THE CR OPS LYING WITH THE ASSESSEE ARE AT DIFFERENT STAGES AND IT CANNOT BE VALUED AT ITA NO. 2531/MDS/2016 3 MARKET PRICE. CERTAIN CLOSING STOCK WAS IN A POSITI ON OF PACKET AND KEPT AT GO-DOWN, CERTAIN STOCKS ARE UNPACKED CONDIT ION AND CERTAIN CLOSING STOCK UNDER THE PROCESS OF FINISHING BUT NO T READY FOR PACKING. ACCORDING TO LD.A.R, IT IS NOT POSSIBLE TO ADOPT TH E COST OR MARKET PRICE WHICHEVER IS LESS. HE FURTHER SUBMITTED THE CLOSIN G STOCK IS VALUED ON THE STAGES OF COMPLETION. HE SUBMITTED THAT NO R EASON HAS BEEN GIVEN BY THE LD. ASSESSING OFFICER EXCEPT STATING T HAT VALUATION IS NOT AT AVERAGE RATE, IS ARRIVED AT BY HIM FOR ALTERING THE VALUATION. HE RELIED ON THE ORDER OF LD.CIT(A). 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN PRINCIPLE, I AGREE WITH THE CONTENTION OF THE LD.A.R IS THAT VALUATION OF CLOSING STOCK TO BE DONE ON THE BASIS OF THE STAGES OF COMPLETION, THE AVERAGE RATE CANNOT BE CONSIDERED T O VALUE THE SAME. HOWEVER, THE LD.CIT(A) NOT CALLED FOR A REMA ND REPORT, DIRECTLY DELETED THE ADDITION. HENCE, IN MY OPINIO N, IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF LD. ASSESSING OFFICE R TO VALUE THE CLOSING STOCK ON THE BASIS OF STAGES OF COMPLETION. ACCORD INGLY, THE ENTIRE ITA NO. 2531/MDS/2016 4 ISSUE IN DISPUTE IS REMITTED TO THE FILE OF LD. ASS ESSING OFFICER FOR FRESH CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21.12.2017 SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 21.12.2017 K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF