The ITO, Ward-4(3), Baroda V. M/S Sudeep Pharma Ltd, Baroda

ITA 280/AHD/2002

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0448 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-11-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 08-02-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Assessee Lawyers: T P HEMANI; S N SOPARKAR
• Section: 43B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, A-BENCH, AHMEDABAD. BEFORE: SHRI R.V. EASWAR, VICE PRESIDENT, AND SHRI M.V. NAYAR, ACCOUNTANT MEMBER. ITA NO.280/AHD/2002 (ASSESSMENT YEAR 1997-1998) INCOME TAX OFFICER, WARD-4(3), 4 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. VERSUS SUDEEP PHARMA LTD. 129/A, INDUSTRIAL ESTATE, BARODA. (APPELLANT) (RESPONDENT) PAN: 31-614-CZ-2631 FOR THE APPELLANT: SHRI RAJEEV AGARWAL, CIT, DR FOR THE RESPONDENT SHRI S.N. SOPARKAR & T.P. HEMANI , AD. ORDER PER SHRI M.V. NAYAR, ACCOUNTANT MEMBER: THE REVENUE IS IN APPEAL AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-III, BARODA, IN APPEAL NO. CAB/III-459/1999-2001 VIDE OR DER DATED 13-11-2001. THE GROUNDS OF THE REVENUES APPEAL AR E AS GIVEN BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN DELETING THE ADDI TION OF RS. 357750/- ON ACCOUNT OF EXCISE DUTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. 2. THE ONLY GROUND OF APPEAL IN THIS CASE IS AGAINS T ADDITION OF RS. 3,57,750/- BEING EXCISE DUTY ON CLOSING STOCK OF FI NISHED GOODS. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN C LOSING STOCK OF FINISHED GOODS AT RS. 23,85,027/- BUT HAS NOT INCLU DED IN THE VALUATION OF 2 ITA NO.280/AHD/2002 (ASSESSMENT YEAR 1997-1998 ) THE SAME THE EXCISE DUTY PAYABLE ON SUCH FINISHED G OODS. IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT EXCISE DUTY IS PAYABLE WHEN THE GOODS ARE REMOVED AND HENCE THE SAME HAS NOT BEEN I NCLUDED IN THE VALUATION OF THE CLOSING STOCK OF FINISHED GOODS. IT WAS ALTERNATIVELY PLEADED THAT IF THE SAME IS ADDED TO THE VALUATION OF THE CLOSING STOCK, IT SHOULD BE ALLOWED AS DEDUCTION UNDER SECTION 43B OF THE ACT ON PAYMENT BASIS. THE ASSESSING OFFICER DID NOT ACCEPT THE PL EA OF THE ASSESSEE. ACCORDING TO HIM THE LIABILITY FOR CENTRAL EXCISE D UTY ARISES AS SOON AS THE GOODS ARE MANUFACTURED IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF MCDOWELL COMPANY. LTD. (154 ITR 148) . HE, THEREFORE, CALCULATED THE EXCISE DUTY PAYABLE ON THE FINISHED GOODS @ 15% WHICH COMES TO RS. 3,57,750/- AND ADDED THIS AMOUNT TO TH E CLOSING STOCK AND THEREBY TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE MATTER WENT BEFORE THE LD. COMMISSIONER OF I NCOME TAX(APPEALS), WHO HELD AS GIVEN BELOW: 1.2 FACTS OF THE CASE AND SUBMISSIONS OF THE APPEL LANTS COUNSEL HAVE BEEN CONSIDERED. THE ISSUE IS SQUARELY COVERE D BY THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF EN GLISH ELECTRIC COMPANY. OF INDIA LTD. (SUPRA). FOLLOWING THE SAID DECISION, THE ADDITION OF RS. 3,57,750/- IS DELETED. I WOULD LIK E TO POINT OUT THAT THE DECISION OF THE SUPREME COURT IN THE CASE OF MC DOWELL COMPANY. LTD. CITED BY THE ASSESSING OFFICER IS NOT APPLICABLE AS THE ISSUE INVOLVED IN THAT CASE WAS WHETHER THE EXC ISE DUTY WAS TO BE INCLUDED IN THE TURNOVER OF THE BUSINESS OR NOT AND NOT THE INCLUSION OF EXCISE DUTY IN THE VALUATION OF CLOSIN G STOCK WHICH HAS NOT BEEN REMOVED ON SALE OR OTHERWISE BY THE APPELL ANT. 4. AGAINST THIS REVENUE IS IN APPEAL BEFORE US. SH RI. RAJEEV AGARWAL, CIT-DR APPEARED FOR THE REVENUE. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 3 ITA NO.280/AHD/2002 (ASSESSMENT YEAR 1997-1998 ) 5. SHRI. S.N. SOPARKAR, AR, APPEARED FOR THE ASSESS EE. HE INFORMED US THAT THE MATTER STOOD COVERED BY THE FOLLOWING D ECISIONS: I. THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ONE UP SHARES AND STOCK BROKERS PVT. LTD. VS. CI T AND ORS. 262 ITR 275 (BOM.) 2. THE DECISION OF THE HON'BLE GUJARAT HIGH COURT I N THE CASE OF CIT VS. UNIQUE INDUSTRIES 307 ITR 350 (GUJ.) HE ALSO INFORMED US THAT THIS APPEAL PERTAINED TO A SSESSMENT YEAR 1997-98 AND THE LAW WAS AMENDED ONLY WITH EFFECT FROM 01-04 -1999. 6. WE HAVE CONSIDERED THE FACTS AND THE RIVAL SUBMI SSIONS. THIS ISSUE NOW STANDS COVERED BY THE JUDGMENT THE MATTER STAND S COVERED BY THE DECISIONS REFERRED TO BY THE AR FOR THE ASSESSEE. ACCORDINGLY, WE DISMISS REVENUES APPEAL. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 13 TH NOVEMBER, 2009. SD/- SD/- (R.V. EASWAR) (M .V. NAYAR) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD; DATED: 13/11/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.