ARJAV DIAMONDS, MUMBAI V. PR CIT -19, MUMBAI

ITA 3035/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9740 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Assessment record
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 3035/MUM/2017 : A.Y : 2012 - 13 M/S. ARJAV DIAMONDS DE THE 8031/8032, G - BLOCK, BHARAT DIAMOND COURSE, BKC, BANDRA EAST, MUMBAI 400 051 (APPELLANT) PAN : AAIFA0126F VS. PR. CIT - 19, MUMBAI (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI R.P. MEENA DATE OF HEARING : 28 /0 6 /2017 DATE OF PRONOUNCEMENT : 31 /07/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PR. CIT - 49, MUMBAI DATED 2 0 . 03 .201 7 PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) , PERTAINING TO THE ASSESSMENT YEAR 20 12 - 13 , WHEREBY THE ASSESSMENT ORDER DATED 12.02.2015 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT HAS BEEN HELD TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SEC. 263 OF THE ACT . 2 ITA NO. 3035/MUM/2017 M/S. ARJAV DIAMONDS 2. AT THE TIME OF HEA RING, IT WAS SEEN THAT NONE APPEARED ON BEHALF OF THE ASSESSEE AND NOR ANY ADJOURNMENT APPLICATION HAS BEEN MOVED INSPITE OF SERVICE OF NOTICE OF HEARING BY RPAD. ON THE OTHER HAND, THE LD. CIT - DR APPEARED ON BEHALF OF THE RESPONDENT - REVENUE. 3. ACCORDIN GLY, IN VIEW OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE APPEAL OF THE ASSESSEE IS BEING DISPOSED OFF ON MERITS AFTER HEARING THE RESPONDENT - REVENUE. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT A RETURN OF INCOME WAS FILED ON 27.9.2016 BY THE ASSESSEE DECLARING A RETURNED INCOME OF RS.1,24,30,750/ - WHICH WAS SUBJECT TO AN ASSESSMENT U/S 143(3) OF THE ACT DATED 12.2.2015, WHEREIN THE RETURNED INCOME WAS ACCEPTED. SUBSEQUENTLY, THE COMMISSIONER ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE A CT AFTER EXAMINING THE ASSESSMENT RECORD FOR THE REASON THAT THE ASSESSMENT ORDER DATED 12.2.2015 (SUPRA) WAS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SEC. 263 OF THE ACT. AS PER THE COMMISSIONER, WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAD NOT EXAMINED WHETHER THE AMOUNT OF RS.77,88,482/ - REPRESENTING EXCHANGE DIFFERENCE ON IMPORT AND RS.89,27,734/ - REPRESENTING EXCHANGE DIFFERENCE ON EXPORT, WHICH HAVE BEEN DEBITED AND CREDITED RESPECTIVE LY IN THE PROFIT & LOSS ACCOUNT HAVE BEEN TAKEN INTO ACCOUNT FOR THE PURPOSES OF VALUATION OF CLOSING STOCK OF ROUGH AND POLISHED DIAMONDS. FROM THE ORDER OF THE COMMISSIONER, WE FIND THAT THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT FOUND SATISFACTORY AND, THEREFORE, THE COMMISSIONER PROCEEDED TO CANCEL THE ASSESSMENT ORDER DATED 12.2.2015 (SUPRA) AND DIRECTED 3 ITA NO. 3035/MUM/2017 M/S. ARJAV DIAMONDS THE ASSESSING OFFICER TO DETERMINE THE INCOME AFRESH AFTER MAKING PROPER INQUIRY WITH RESPECT TO THE I SSUES RAISED BY HER IN THE IMPUGNED ORDER. AGAINST SUCH A DECISION OF THE COMMISSIONER, ASSESSEE IS IN APPEAL BEFORE US. 5. AS PER THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, WHICH READS AS UNDER 1. THE ORDER PASSED BY THE LEARNED CIT U/S 263 OF TH E INCOME - TAX ACT, 1961 IS ILLEGAL AND BAD IN LAW. 2. THE LEARNED CIT HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 3. THE LEARNED CIT HAS ERRED IN LA W AND ON FACTS IN SETTING ASIDE THE ASSESSMENT ORDER BY OBSERVING THAT THERE IS UNDERVALUATION OF CLOSING STOCK AS FOREIGN EXCHANGE FLUCTUATION COST SHOULD HAVE BEEN ADDED TO THE COST OF CLOSING STOCK WHICH NEEDS VERIFICATION. NO SPECIFIC INFIRMITY HAS BEEN PLEADED SO AS TO ENABLE US TO INTERFERE WITH THE IMPUGNED ORDER PASSED BY THE COMMISSIONER U/S 263 OF THE ACT. RATHER, THE LD. CIT - DR APPEARING FOR THE REVENUE POINTED OUT THAT EVEN IN THE REPLY FURNISHED TO THE COMMISSIONER, THE ASSESSEE DID NOT DIS PUTE THE FACT THAT THE ASPECT OF VALUATION OF STOCK WAS NOT EXAMINED BY THE ASSESSING OFFICER, WHICH JUSTIFIES INVOKING OF SEC. 263 OF THE ACT BY THE COMMISSIONER. IN OUR CONSIDERED OPINION, AND HAVING REGARD TO THE MATERIAL ON RECORD, WE FIND THAT THE CO MMISSIONER WAS JUSTIFIED IN INVOKING SEC. 263 OF THE ACT AND, ACCORDINGLY THE IMPUGNED ORDER IS HEREBY AFFIRMED. 4 ITA NO. 3035/MUM/2017 M/S. ARJAV DIAMONDS 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 S T JULY, 2017. SD/ - SD/ - (RAVISH SOOD) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 3 1 S T JULY, 2017 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI