M/S. BOROSIL GLASS WORKS LTD., MUMBAI V. ADDL.C.I.T. CIRCLE 6(1), MUMBAI

ITA 2633/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7349 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 24-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA; S S RANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.K.GUPTA, JM AND SHRI R.S.SYAL, AM ITA NO.2633/MUM/2009 : ASST.YEAR 2006-2007 M/S.BOROSIL GLASS WORKS LIMITED 4 TH FLOOR, KHANNA CONSTRUCTION HOUSE 44, K.G.THADANI MARG, WORLI MUMBAI 400 018. PA NO.AAACB5484G. VS. THE ADDL.COMMISSIONER OF INCOME-TAX CIRCLE 6(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : S/SHRI S.S.RANA & VIRENDRA OJHA O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX U/S.263 OF THE INCOME-TA X ACT, 1961 ON 6.3.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSMENT IN THIS CASE WAS COMPLETED U/S.143(3) ON 10.1.2008. THE LEARNED CIT NOTED THAT THE A.O. HAD NOT MADE NECESSARY AND ADEQUATE INQUIRY ON THE FOLLOWIN G ISSUE:- AS PER CLAUSE 12(B) OF TAX AUDIT REPORT IN FORM 3C D READ WITH ANNEXURE-V THERETO, THE ASSESSEE HAS GIVEN DETAILS OF VARIOUS ADJUSTMENTS TO BE MADE U/S.145A OF THE I.T.ACT TO D EMONSTRATE THAT NET EFFECT OF THESE ADJUSTMENTS ON THE PROFIT WITHIN TH E MEANING OF SECTION 145A OF THE I.T.ACT IS RS.NIL. SIMILARLY, AS PER CL AUSE 22(A) OF THE TAX AUDIT REPORT IN FORM 3CCD READ WITH ANNEXURE XVII T HERETO, THE ASSESSEE HAS GIVEN DETAILS OF UNAVAILED MODVAT CRED IT AT THE END OF THE YEAR AMOUNTING TO RS.18,65,302/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS NOT MADE ANY VERIFICATION REGARDING THE BASIS OF VARIOUS FIGURES SHOWN IN ANNEXURE V FOR TH E PURPOSE OF MAKING ADJUSTMENT U/S.145A OF THE ACT. SIMILARLY TH E ASSESSING OFFICER HAS NOT EXAMINED WHETHER ANY ADDITION IS RE QUIRED TO BE MADE U/S.145A OF THE I.T.ACT IN RESPECT OF UNAVAILED MOD VAT CREDIT OF RS.18,65,302/- AS PER DETAILS GIVEN IN ANNEXURE XVI I MENTIONED ABOVE. ITA NO.2633/MUM/2009 M/S.BOROSIL GLASS WORKS LIMITED. 2 3. AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE, TH E ASSESSMENT WAS SET ASIDE WITH A DIRECTION TO MAKE FRESH ASSESSMENT AFTER MAK ING INTER ALIA THE FOLLOWING INQUIRY :- (A) HE SHOULD OBTAIN THE DETAILS AND BASIS OF VARI OUS FIGURES GIVEN IN ANNEXURE V TO CLAUSE 12(B) OF TAX AUDIT REPORT I N FORM 3CD TO VERIFY THE CORRECTNESS OF THE SAME. (B) HE SHALL OBTAIN THE DETAILS AND BASIS OF VARIO US FIGURES GIVEN IN ANNEXURE XVII TO CLAUSE 22(A) OF TAX AUDIT REPORT I N FORM NO.3CD TO VERIFY THE CORRECTNESS OF THE SAME. (C) HE SHALL ALSO EXAMINE WHETHER ANY PART OF UNUT ILIZED MODVAT CREDIT OF RS.18,65,302 IS TO BE ADDED TO THE CLOSIN G STOCK IN VIEW OF PROVISIONS OF SECTION 145A OF THE I.T.ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED FROM THE IMPUGNED ORDER THAT TH E LEARNED CIT DIRECTED THE ASSESSING OFFICER TO GIVE EFFECT TO THE PROVISIONS OF SECTION 145A WHICH WAS NOT DONE IN THE ASSESSMENT MADE U/S.143(3). THE LEARNED A.R. FAIRLY CONCEDED THAT THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER ON T HIS POINT. SECTION 145A HAS BEEN INSERTED BY THE FINANCE (NO.2) ACT, 1998 WITH EFFEC T FROM 1.4.1999 WHICH PROVIDES THAT THE VALUATION OF PURCHASE AND SALE OF GOODS AN D INVENTORY FOR THE PURPOSE OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD `P ROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL BE (I) IN ACCORDANCE WITH THE MET HOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE AND (II) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX, DUTY, CESS OR FEE (WHATEVER NAME CALLED) ACTUALLY P AID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CO NDITION AS ON THE DATE OF VALUATION. THIS SECTION IS APPLICABLE TO THE ASSESS MENT YEAR UNDER CONSIDERATION. IT IS AN AGREED POSITION THAT THE VALUATION OF THE INV ENTORIES, PURCHASE AND SALE OF GOODS WAS NOT DONE AS PER THE MANDATE OF THIS SECTI ON. THE ASSESSING OFFICER ITA NO.2633/MUM/2009 M/S.BOROSIL GLASS WORKS LIMITED. 3 MERELY ACCEPTED WHAT THE ASSESSEE STATED AND DID NO T APPLY HIS MIND TO THE MATERIAL BEFORE HIM WITH A VIEW TO GIVE EFFECT TO THE PROVIS IONS OF SECTION 145A. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT [(2000) 243 ITR 83 (SC)] HAS HELD THAT THE CIT IS COMPETENT TO REVISE THE O RDER PASSED BY THE A.O. IN WHICH THE LATER HAD ACCEPTED WHATEVER W AS STATED BEFORE HIM WITHOUT APPLICATION OF HIS MIND. SIMILAR VIEW HAS BEEN TAKE N RECENTLY BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF RAJALAKSHMI MILLS LIMITED VS. ITO [(2009) 121 ITD 343 (CHENNAI) (SB)] . THE LEARNED CIT HAS REFERRED TO FIVE JUDGMENTS IN PARA 8 OF THE IMPUGNED ORDER WHICH EMPOWER HIM TO TAKE ACTIO N U/S.263 WHERE A.O. FAILED TO MAKE INQUIRY. THE SAID JUDGMENTS ARE ALSO FULLY APPLICABLE TO THE FACTS AND SITUATION OF THE INSTANT CASE. UNDER THESE CIRCUMST ANCES WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER, WHICH IS HEREBY UP HELD. 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF MARCH 2010. SD/- SD/- ( R.K.GUPTA ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 26 TH MARCH, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT - VI, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.