DCIT, Villupuram V. M/s. Chengalrayan Co-op. Sugar Mills Ltd., Villupuram

ITA 3083/CHNY/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6028 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-08-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S PANDIAN
• Assessee Lawyers: J PRABHAKAR
• Keywords: Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !', $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.3083 & 3084/CHNY/2016 ' (' / ASSESSMENT YEARS : 2006-07 & 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, VILLIPURAM CIRCLE, NO.1, CHAIRMAN SUBBARAYAR STREET VILLIPURAM 605 602. V. M/S CHENGALRAYAN CO.OP. SUGAR MILLS LTD., PERIYASEVALAI, ULLUNDURPET TALUK, VILLUPURAM DISTRICT. PAN : AAACC 2617 C (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : DR. S. PANDIAN, JCIT ,-*+ . / / RESPONDENT BY : SHRI J. PRABHAKAR, FCA 0 . 1$ / DATE OF HEARING : 24.07.2019 23( . 1$ / DATE OF PRONOUNCEMENT : 01.08.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE REVENUE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, DATED 05.07.2016 AND PERTAIN TO ASSESSM ENT YEARS 2006-07 AND 2009-10. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD THESE A PPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.3083 & 3084/CHNY/16 2. THERE WAS A DELAY OF 13 DAYS IN FILING BOTH THE APPEALS BY THE REVENUE. THE REVENUE HAS FILED PETITIONS FOR C ONDONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND THE LD. REPRESENTATIVE FOR THE ASSESSEE. WE FIND T HAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THESE APPEALS BEFOR E THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT BO TH THE APPEALS. 3. DR. S. PANDIAN, THE LD. DEPARTMENTAL REPRESENTAT IVE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS VALUATION OF MOLASSES WHILE CONSIDERING THE OPENING STOCK. ACCO RDING TO THE LD. D.R., WHILE CONSIDERING THE VALUE OF MOLASSES IN EA RTH PIT AT 100/- PER METRIC TON, THE ASSESSEE HAS NOT TAKEN INTO CON SIDERATION THE MARKET VALUE. THEREFORE, THE ASSESSING OFFICER FIX ED THE MARKET VALUE OF THE MOLASSES IN THE PIT AT 655.28 PER METRIC TON FOR THE ASSESSMENT YEAR 2006-07 AND 772.5 PER METRIC TON FOR THE ASSESSMENT YEAR 2009-10. HOWEVER, THE CIT(APPEALS) FOUND THAT THE ASSESSING OFFICER HAS NOT OBTAINED ANY NEW MATE RIAL OR INFORMATION FOR VALUATION OF MOLASSES. ACCORDING T O THE LD. D.R., THE ASSESSEE HAS NOT DISCLOSED BOTH THE VALUE OF OP ENING STOCK AND CLOSING STOCK OF MOLASSES IN EARTH PIT. 3 I.T.A. NOS.3083 & 3084/CHNY/16 4. ON THE CONTRARY, SHRI J. PRABHAKAR, THE LD. REPR ESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT MOLASSES CONTROL ORDER RESTRICTS FREE TRADE OF MOLASSES IN THE MARKET. THE ASSESSEE HAS TO NECESSARILY OBTAIN PERMISSION FOR SALE OF MOLASSES IN THE MARKE T FROM TAMIL NADU POLLUTION CONTROL BOARD AND OTHER REGULATORY A UTHORITIES. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, IT HAS NO VALUE. HOWEVER, FOR ACCOUNTING PURPOSE, THE ASSESSEE HAS V ALUED THE MOLASSES IN EARTH PIT AT 100/- PER MATRIC TON. ON A QUERY FROM THE BENCH WHICH PROVISION OF MOLASSES CONTROL ORDER PRO HIBITS OR RESTRICTS FREE TRADE OF MOLASSES IN THE OPEN MARKET , THE LD. REPRESENTATIVE COULD NOT PRODUCE THE MOLASSES CONTR OL ORDER IMMEDIATELY FOR REFERENCE. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE OPENING STOCK WAS DISCLOSED ON THE BASIS O F VERY SAME VALUE ADOPTED REGULARLY, THEREFORE, REVALUATION OF MOLASSES RATE DETERMINED BY THE ASSESSING OFFICER MAY NOT HAVE AN Y EFFECT IN THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE-SOCIETY. IN OTHER WORDS, THERE WILL BE REVENUE NEUTRAL, HENCE, ACCORDING TO THE LD . REPRESENTATIVE, NO INTERFERENCE IS CALLED FOR. 4 I.T.A. NOS.3083 & 3084/CHNY/16 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE VALUED THE MOLASSES IN EARTH PIT AT 100/- PER METRIC TON. HOWEVER, THE ASSESSING OFFICER CLAIMS THAT IT WAS V ALUED ON MARKET VALUE. NOW THE ASSESSEE CLAIMS THAT THE MOLASSES C ANNOT BE TRADED FREELY IN THE OPEN MARKET BECAUSE OF THE RES TRICTION PROVIDED IN MOLASSES CONTROL ORDER. COPY OF MOLASSES CONTRO L ORDER WAS NOT PRODUCED BEFORE THIS TRIBUNAL, THEREFORE, WE HA VE NO OCCASION TO GO THROUGH THE SAID ORDER. IN SUCH CIRCUMSTANCE S, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER AFTER CONSIDERING THE MOLA SSES CONTROL ORDER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE MATTER ON THE BASIS OF THE MATERIAL THAT MAY BE FIL ED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE STAND ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NOS.3083 & 3084/CHNY/16 ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2019 AT CHENNAI. SD/- SD/- (. !') ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 1 ST AUGUST, 2019. KRI. . ,167 87(1 /COPY TO: 1. *+/ APPELLANT 2. ,-*+/ RESPONDENT 3. 0 91 () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 7: ,1 /DR 6. ' ; /GF.