Smt. Kavita R. Nankani L/H of late Rameshbhai N. Nankani, Ahmedabad V. The Income Tax Officer,Ward-11(4), Ahmedabad

ITA 2732/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8718 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA SR DR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER , .., ./ ITA NO. 2732/AHD/2014 / ASSESSMENT YEAR: 2009-10 LATE SHRI RAMESHLAL N. NANKANI, THROUGH HIS LEGAL REPRESENTATIVE SMT. KAVITA R. NANKANI, 2, HERITAGE ELITE, RAMAKRISHNA SOCIETY, VIKRAM SARABHAI ROAD, AHMEDABAD PAN : AAMPN 0426 F VS. INCOME-TAX OFFICER, WARD 11 (4), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI DEEPAK SONI, AR REVENUE BY : SHRI O.P. MEENA, SR DR $ & / DATE OF HEARING : 11/08/2017 $ & / DATE OF PRONOUNCEMENT: 17/08/2017 / O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD DATED 27.08.2014 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.6,97,8 39/- ON THE ALLEGED UNDER VALUATION OF THE CLOSING STOCK. 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT MAINTAINE D THE DAY-TO-DAY STOCK REGISTER. THE ASSESSEE, WHEN ASKED, STATED THAT IN THIS LINE OF BUSINESS IT IS ITA NO. 2732/AHD/2014 LATE SHRI RAMESHLAL N NANKANI VS. ITO AY : 2009-10 2 NOT POSSIBLE FOR HIM TO MAINTAIN THE DAY-TO-DAY, IT EM-WISE, QUALITY AND QUANTITY-WISE STOCK REGISTER. THE ASSESSING OFFICE R WAS NOT CONVINCED WITH THE REPLY OF THE ASSESSEE AND PROCEEDED BY COMPUTIN G THE VALUATION OF CLOSING STOCK AND ACCORDINGLY MADE ADDITION OF RS.6 ,97,389/-. 4. WHEN THE MATTER WAS AGITATED BEFORE THE CIT(A), THE CIT(A) WAS OF THE OPINION THAT THE ASSESSING OFFICER HAS GIVEN A CLEAR FINDING, RECORDING THE ADOPTION OF VALUE OF CLOSING STOCK AND ACCORDIN GLY CONFIRMED THE ASSESSMENT. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ST ATED THAT BOTH THE LOWER AUTHORITIES HAVE GROSSLY ERRED IN NOT APPRECI ATING THE FACT THAT THE METHOD OF VALUATION OF CLOSING STOCK EMPLOYED IN TH E PREVIOUS YEAR BY THE ASSESSEE IS COST OR MARKET VALUE WHICHEVER IS LESS . IT IS THE SAY OF THE COUNSEL THAT THE ASSESSEE HAS VALUED THE STOCK AT C OST PRICE WHICH HAS BEEN ACCEPTED BY THE REVENUE SINCE PAST MANY YEARS. THE REFORE, THE ASSESSING OFFICER AS WELL AS THE CIT(A) ERRED IN VALUING THE CLOSING STOCK AT MARKET PRICE. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE CIT(A). 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE IS VALUING ITS CLOSING STOCK AT COST OR MARKET PRICE WHICHEVER IS LOWER AND ACCORDINGLY, FOR THE YEAR UNDER CONSIDERATION, THE STOCK HAS BEEN VA LUED AT COST. THIS VIEW IS ALSO FORTIFIED FROM THE TAX AUDIT REPORT EXHIBITED AT PAGE NOS. 1 TO 8 OF THE PAPER-BOOK. IT IS EQUALLY TRUE THAT NEITHER THE AS SESSING OFFICER NOR THE ITA NO. 2732/AHD/2014 LATE SHRI RAMESHLAL N NANKANI VS. ITO AY : 2009-10 3 CIT(A) HAS POINTED OUT ANY DEFECT IN THE METHOD OF VALUATION OF THE ASSESSEE. SINCE THE SAME METHOD HAS BEEN EMPLOYED BY THE ASSESSEE YEAR AFTER YEAR, WE DO NOT FIND ANY REASON WHY THE SAME SHOULD BE DISTURBED FOR THE YEAR UNDER CONSIDERATION. WE ACCORDINGLY DIREC T THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.6,97,839/- AND THUS TH E APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 17 TH AUGUST, 2017 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (N.K. BILLAIYA) ACCOUN TANT MEMBER AHMEDABAD; DATED 17/08/2017 BIJU T., SR, PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT 2. -., / THE RESPONDENT. 3. 0 2 / CONCERNED CIT 4. 2 ( ) / THE CIT(A) , AHMEDABAD 5. 5 -0 , & 0 , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD