GOLDEN CROSS PHARMA P. LTD, MUMBAI V. ACIT RG 6(3), MUMBAI

ITA 3110/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8022 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: S R BHANDHARI

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI R. V. EASWAR, PRESIDENT AND SHRI RAJEN DRA SINGH(AM) ITA NO.3110/M/2010 ASSESSMENT YEAR 2006-07 GOLDEN CROSS PHARMA PVT. LTD. THE ACIT RANGE 6(3) , 5 TH FLOOR, 12, GUNBOW STREET, FORT, AAYAKAR BHAVAN, ROOM NO .522, MUMBAI 400 001. M.K.ROAD, MUMBAI 400 020. PAN : AABCG 0541 J APPELLANT RESPONDENT ASSESSEE BY : SHRI S.R.BHANDHARI REVENUE BY : SHRI A.K.NAYAK O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 11.2.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07. THE ONLY DI SPUTE RAISED IS REGARDING ORDER OF CIT(A) CONFIRMING RELIEF OF ONLY RS.12,60, 506/- AGAINST THE CLAIM OF RS.53,19,676/- ON ACCOUNT OF UNUTILIZED MODVAT CRED IT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO DURING THE ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD NOT ADDED A SUM OF RS.53,19,676/- TO THE CLOSING STOCK ON ACCOUNT OF U NUTILIZED MODVAT CREDIT WHICH WAS REQUIRED TO BE ADDED UNDER SECTION 145A O F THE INCOME-TAX ACT. THE AO ALSO NOTED THAT IN A.Y.2005-06 ALSO A SUM OF RS. 40,59,170/- HAD BEEN ADDED TO THE CLOSING STOCK ON THIS ACCOUNT. THE AO, THEREFORE, TAKING INTO 2 ACCOUNT, THE ADDITION OF RS.40,59,170/- TO THE OPEN ING STOCK ADDED A SUM OF RS.12,60,506/- (53,19,676 40,59,170) ON ACCOUNT O F UNUTILIZED MODVAT CREDIT IN THE ASSESSMENT ORDER DATED 9.4.2009. THE ADDITIO N WAS DISPUTED BY THE ASSESSEE AND IT WAS SUBMITTED BEFORE CIT(A) THAT TH E ASSESSEE WAS ONLY DOING JOB WORK AND THE STOCK LYING WITH THE ASSESSEE BELO NGED TO THE CLIENTS AND THEREFORE NO ADJUSTMENT UNDER SECTION 145A COULD BE MADE IN CASE OF THE ASSESSEE. CIT(A) AGREED WITH THE SUBMISSION OF THE ASSESSEE THAT NO ADDITION WAS REQUIRED TO BE MADE IN CASE OF THE ASSESSEE AND DIRECTED THE AO TO DELETE THE ADDITION. THE AO IN THE APPEAL EFFECT ORDER DAT ED 1.7.2009 THUS GAVE RELIEF TO THE ASSESSEE TO THE EXTENT OF RS.12,60,506/-. A GGRIEVED BY THE SAID ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A), ARGUIN G THAT ON THE BASIS OF ORDER OF CIT(A) ADDITION OF RS.53,19,676/- WAS REQUIRED T O BE DELETED AND NOT JUST RS.12,60,506/-. CIT(A) HOWEVER, DID NOT ACCEPT THE CONTENTIONS RAISED. IT WAS OBSERVED BY HIM THAT THE AO HAD ADDED ONLY A SUM OF RS.12,60,506/- ON ACCOUNT OF UNUTILIZED MODVAT CREDIT AND THEREFORE H E HAD RIGHTLY REDUCED THE SAID AMOUNT FROM TOTAL AMOUNT AT THE TIME GIVING EF FECT TO THE ORDER OF CIT(A). AGGRIEVED BY THE SAID DECISION THE ASSESSEE IS IN A PPEAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LEARNED AR FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAD DISPUTED THE DECISION OF AO REGARDING ADDITION TO THE CLOSING STOCK ON ACCOUNT OF UNUTILIZED MODVAT CREDIT AND THEREFORE S INCE THE CIT(A) HAD HELD THAT STOCK BELONGED TO OTHER PARTIES NO ADDITION CO ULD BE MADE IN CASE OF THE ASSESSEE ON ACCOUNT OF CLOSING STOCK. THE ADDITION TO THE CLOSING STOCK OF RS.53,19,676/- WAS THUS REQUIRED TO BE DELETED. ACC ORDINGLY IT WAS URGED THAT RELIEF OF RS.53,19,676/- SHOULD BE GIVEN IN PLACE O F RS.12,60,506/- ALLOWED BY THE AUTHORITIES BELOW. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT THE ADDITION MADE ON ACCOUNT OF CLOSING STOCK BY THE AO WAS ONLY RS.12,60,506/- 3 AND THEREFORE THE AO HAD RIGHTLY REDUCED THE SAID A MOUNT FROM THE TOTAL INCOME IN PURSUANCE OF THE ORDER OF CIT(A). 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS IN RELATION TO THE APPEAL EFFECT ORDER DATED 1.7.2009 OF THE AO IN WHICH THE AO AT THE TIME OF GIVING EFFECT TO THE ORDER DATED 9.4.2009 OF CIT(A) HAD REDUCED A SUM OF RS.12,60,506/- FROM THE TOTAL INCOME. AO IN THE ASSESSMENT ORDER HAD HELD THAT A SUM OF RS.53,1 9,676/- WAS REQUIRED TO BE ADDED TO THE CLOSING STOCK ON ACCOUNT OF UNUTILI ZED MODVAT CREDIT AND AFTER MAKING ADJUSTMENT ON THIS ACCOUNT OF RS.40,59,170/- TO THE OPENING STOCK WHICH HAD BEEN ADDED IN THE CLOSING STOCK OF THE LA ST YEAR THE AO MADE NET ADDITION OF RS.12,60,506/- ON ACCOUNT OF UNUTILIZED MODVAT CREDIT. IN APPEAL CIT(A) HELD THAT THE ASSESSEE WAS DOING ONLY JOB WO RK AND THE STOCK BELONGED TO THE THIRD PARTIES AND THEREFORE NO ADDITION WAS REQUIRED TO BE MADE ON ACCOUNT OF UNUTILIZED MODVAT CREDIT IN CASE OF THE ASSESSEE. ONCE, IT WAS HELD THAT STOCK BELONGED TO OTHER PARTIES, THE ADJUSTMEN T ON ACCOUNT OF UNUTILIZED MODVAT CREDIT BOTH IN RESPECT OF OPENING STOCK AND CLOSING STOCK HAD TO BE DELETED, THE NET RESULT OF WHICH WAS RELIEF OF RS.1 2,60,506/- TO THE ASSESSEE. THE AO HAD ALSO ADDED ONLY THE SUM OF RS.12,60,506/ - IN THE ASSESSMENT ORDER AND THEREFORE RELIEF COULD NOT BE GIVEN BEYOND THAT . WE THEREFORE FIND NO ERROR IN THE ORDERS OF AUTHORITIES BELOW ON THIS ACCOUNT AND ACCORDINGLY DISMISS THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 6. ORDER WAS PRONOUNCED IN THE OPEN COURT 23.03.201 1. SD/- SD/- ( R. V. EASWAR ) (RAJENDR A SINGH) PRESIDENT ACCOUNTANT MEMBER DATE : 23.03.2011 AT :MUMBAI 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR G BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK