Shri Mukesh Agrawal, Indore V. THE ACIT-3(1), Indore

ITA 282/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5981 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: C P RAWKA
• Section: 143(3); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO. 282/IND/2016 A.Y. 2009-10 MUKESH AGRAWAL, PROP. AGRAWAL ASSOCIATES, INDORE PAN ABTPA 2081 K :: APPELLANT VS ACIT-3(1), INDORE :: RESPONDENT ASSESSEE BY SHRI C.P. RAWKA RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 22.6.2016 DATE OF PRONOUNCEMENT 22.6.2016 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING TH E ORDER OF LD. CIT(A)- INDORE- 2, DATED 16.2.2016 CHALLENGING THE CONFIRMA TION OF ADDITION ON ACCOUNT OF MANDI TAX IN THE VALUATION OF CLOSING ST OCK AT RS.2,72,169/-. 2. FACTS, IN BRIEF, ARE THAT THE ASSESSING OFFICER ON EXAMINATION OF PURCHASE VOUCHERS OF CHANNA NOTED THAT THE ASSESSEE HAD PURCHASED ALMOST THE ENTIRE QUANTITY OF CHANNA FROM KRISHI UP AJ MANDI. ASSESSEE HAD TO PAY MANDI TAX @2.2% OF THE TOTAL PURCHASE MA DE BY HIM. THE ITA NO.282 OF 2016 - SMC MUKESH AGRAWAL 2 ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROPORTIONATE AMOUNT TO MANDI TAX SHOULD NOT BE CON SIDERED IN THE VALUE OF THE CLOSING STOCK. THE ASSESSEE SUBMITTED THAT THE MANDI TAX WAS NOT THE PART OF THE COST OF CHANNA AND SEPARATE LY DEBITED TO P & L ACCOUNT, THEREFORE, THE VALUATION OF CLOSING STOCK WAS DONE CORRECTLY BY HIM. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE W ITH THE SAME AND MADE AN ADDITION OF RS.2,72,169/-. 3. MATTER CARRIED TO LD. CIT(A), WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT SECTION 145 A MAKES ITS MANDATORY FOR ANY TAXES PAID, TO BRING THE GOODS TO A LOCATIO N TILL THE DATE OF VALUATION, TO BE INCLUDED IN THE VALUATION OF CLOSI NG STOCK. SINCE THERE IS AN EXPRESS PROVISION OF THE ACT, THE ASSESSEE WAS E XPECTED TO INCLUDE THE MANDI TAX IN THE VALUATION OF CLOSING STOCK. BE ING AGGRIEVED, THE ASSESSEE IS BEFORE THE TRIBUNAL. 4. BEFORE ME, LEARNED COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSION MADE BEFORE REVENUE AUTHORITIES AND CONT ENDED THAT THE ASSESSEE WAS FOLLOWING A SYSTEM OF ACCOUNTING IN WH ICH MANDI TAX WAS ACCOUNTED FOR UNDER A SEPARATE HEAD AND DEBITED TO P & L ACCOUNT SEPARATELY. THE SAID SYSTEM WAS FOLLOWED BY THE ASS ESSEE FROM YEAR TO YEAR. FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSME NT WAS COMPLETED ITA NO.282 OF 2016 - SMC MUKESH AGRAWAL 3 U/S 143(3) AND NO SUCH ADDITION WAS MADE. ON THE OT HER HAND, LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. I HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THAT LEARNED C IT(A) FAILED TO CONSIDER THE FACT THAT THE SAID SYSTEM OF ACCOUNTING WAS FOL LOWED BY THE ASSESSEE FROM YEAR TO YEAR AND FOR THE ASSESSMENT YEAR 2007- 08, THE ASSESSMENT WAS COMPLETED U/S 143(3) AND SUCH ADDITION WAS MADE BY THE ASSESSING OFFICER, WHICH WAS DELETED BY THE LD. CIT (A). IN THE YEAR 2008- 09, THE ASSESSMENT WAS COMPLETED U/S 143(3) AND NO SUCH ADDITION WAS MADE. I FIND THAT NO DIFFERENCE IN FACTS IS POINTED OUT BY THE ASSESSING OFFICER IN THE PRESENT YEAR AS COMPARED TO FACTS IN ASSESSMENT YEARS 2007-08 & 2008-09. IN THE LIGHT OF THESE FACTS, THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF NEO POLY P ACK (P) LTD., 245 ITR 492 (DEL) IS SQUARELY APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE IT WAS HELD THAT WHERE AN ISSUE HAD BEEN DECID ED CONSISTENTLY IN A PARTICULAR MANNER FOR EARLIER ASSESSMENT YEARS, FOR THE SAKE OF CONSISTENCY, THE SAME VIEW SHOULD CONTINUE TO PREVA IL FOR SUBSEQUENT YEAR ALSO UNLESS THERE IS MATERIAL CHANGE IN THE FA CTS. IN THE PRESENT CASE ALSO, I FIND THAT NOT A SINGLE DISTINGUISHING FEATURE HAS BEEN POINTED OUT BY THE ASSESSING OFFICER OR BY THE LD. DR IN EA RLIER ASSESSMENT YEARS WHEREIN THE CLAIM OF THE ASSESSEE HAS BEEN AC CEPTED BY THE ITA NO.282 OF 2016 - SMC MUKESH AGRAWAL 4 ASSESSING OFFICER/LD. CIT(A). I, THEREFORE, FIND NO REASON TO CONFIRM THE ORDERS OF THE REVENUE AUTHORITIES ON THE PRESENT IS SUE BY RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE DELH I HIGH COURT RENDERED IN THE CASE OF CIT V. NEO POLY PACK LTD. (SUPRA). T HUS, I SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND DELETE THE AD DITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22.6.2016 . SD/- ( D.T. GARASIA) JUDICIAL MEMBER DATED : 22.6.2016 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE