ADDL CIT RG 8(1), MUMBAI V. DIMPLE DRUMS & BARRESL P. LTD, MUMBAI

ITA 3228/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49077 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEHARILAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A NO.3228/ MUM/2010 ASSESSMENT YEAR: 2005-06 DCIT, CENTRAL CIRCLE-39, .. APPELLANT R.NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN M.K.ROAD,MUMBAI. VS DIMPLE DRUMS & BARRELS PVT LTD. ,. RESPONDEN T SITA NIWAS, DR. CHARAT SINGH COLONY, ANDHERI KURLA ROAD, ANDHERI(EAST), MUMBAI-93. PA NO.AAACD 4604 L APPEARANCES: PARTHASARTHY NAIK, FOR THE APPELLANT BEHARILAL, FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HA S CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 16 TH FEBRUARY,, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961, FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING ADDITION MADE U/S.145A OF THE INC OME TAX ACT, 1961 OF RS.16,27,533 ON ACCOUNT OF UNUTILIZED CENVAT CREDIT , DISREGARDING THE AMENDMENT TO SECTION 145A OF I.T.ACT WITH EFFECT FR OM 1.4.1999 ACCORDING TO I.T.A NO.3228/ MUM/2010 DIMPLE DRUMS & BARRELS PVT LTD 2 WHICH ANY TAX, DUTY, ETC, PAID OR INCURRED BY ASSES SEE HAS TO BE INCLUDED IN THE INVENTORIES. 2. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE L IKE THIS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT AN AMOUNT OF RS. 17,58,913 WAS SHOWN AS BALANCE WITH CENTRAL EXC ISE AUTHORITIES IN THE BALANCE SHEET OF THE ASSESSEE. WHEN THIS WAS CONFRONTED WI TH THE ASSESSEE, IT WAS SUBMITTED THAT COST OF PURCHASES HAVE BEEN DEBITED EXCLUDING THE BENEFIT AVAILABLE AND, THEREFORE, STOCK WAS ALSO VALUED EXCLUDING RS. 16,2 7,533 BEING BENEFIT MADE AVAILABLE ON PURCHASES. THEREFORE, THE BALANCE OF RS. 16,27,533 IS NOT INCLUDIBLE IN CLOSING STOCK AS PURCHASES OF STEEL AND STORES ARE ALREADY REDUCED FROM GROSS COST. THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER. THE AO WAS OF THE VIEW THAT SIMILAR ISSUE HAD ARISEN IN TH E EARLIER YEARS AND THE ADDITION HAS BEEN SUSTAINED BY THE CIT(A). THEREFORE, FOLLO WING THE SAME, HE MADE AN ADDITION OF S.16,27,533 TO THE VALUE OF CLOSING STO CK. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO FOLLOWI NG THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000-20 01, DELETED THE ADDITION. THE ASSESSING OFFICER IS NOT SATISFIED WITH THE STAND T AKEN BY THE CIT(A) AND IS IN FURTHER APPEAL BEFORE US. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORD INATE BENCHES OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED MATERIAL ON RECORD, WE FIND THAT THE ISSUE IN THIS APPEAL IS SQUARELY C OVERED BY THE COORDINATE BENCHS DECISION IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2004-05, WHEREIN THE TRIBUNAL, FOLLOWING THE DECIS ION FOR A.Y. 2002-03, IN SIMILAR ISSUE, HAS, INTER ALIA, OBSERVED AS FOLLOWS: WE FIND THAT THE ISSUE OF ADDITION U/S.145A OF THE ACT ON ACCOUNT OF UNUTILIZED CENVAT CREDIT IS COVERED IN FAVOUR OF TH E ASSESSEE WITH THE I.T.A NO.3228/ MUM/2010 DIMPLE DRUMS & BARRELS PVT LTD 3 DECISION OF MUMBAI TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2002-03(SUPRA), WHEREIN, THE SIMILA R ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE REVENUES GROUND OF APPEAL WAS DISMISSED BY THE TRIBUNAL. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL FOR A.YT. 2002-03 IS REPRODUCED HEREUNDER; WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH SI DES, MATERIAL ON RECORD AND ORDER OF THE AUTHORITIES BELOW. IT IS N OTED FROM THE PERUSAL OF RECORDS THAT ASSESSEE IS MAINTAINING ITS BOOKS OF ACCOUNT ON EXCLUSIVE METHOD OF ACCOUNTING AND, THEREFORE, ADJUSTMENTS AR E TO BE MADE AS PER THE PROVISIONS OF SE.145A OF THE ACT, IN RESPECT OF INV ENTORIES (BOTH CLOSING AND OPENING) PURCHASE AND SALES AND NOT ONLY TO THE CLO SING STOCK. THEREFORE, IT WOULD BE HAVING NO IMPACT ON THE PROFITS OF THE YEA R UNDER CONSIDERATION BECAUSE THE SAME AMOUNT WOULD BE ADDED TO THE CLOSI NG STOCK AND TO THE PURCHASES/OPENING STOCK AS THE CASE MAY BE. ALTHOU GH THIS SHOULD BE DONE IN VIEW OF SPECIFIC PROVISIONS OF SEC.145A, HOWEVER , TO AVOID THE MULTIPLICITY OF PROCEEDINGS HAVING NO IMPACT ON THE ULTIMATE PRO FIT SHOWN BY THE ASSESSEE, WE DISMISS THIS GROUND OF THE REVENUE. WE BEING IN AGREEMENT WITH THE DECISION OF TRIBUNAL IN THE CASE OF THE ASSESSEE FOR A.Y. 2002-03(SUPRA), AND THE FACTS OF THE CASE BEING SIMILAR FOR THE RELEVANT ASSESSMENT YEAR 2004-05, DECIDE THE IS SUE IN FAVOUR OF THE ASSESSEEA AND THE GROUND OF APPEAL NO.1 OF THE REVE NUE IS DISMISSED. 5. WE FIND THAT THE CIT(A) HAS DELETED THE ADDITION FOLLOWING THE DECISIONS OF THE TRIBUNAL IN ASSESES CASE FOR THE ASSESSMENT YE ARS 2000-2001 TO 2004-05. THEREFORE, WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH, AND, ACCORDINGLY, WE UPHOLD THE DECISION OF THE CIT(A) AND DECLINE TO INTERFERE. 6. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARI NG ITSELF I.E. ON 13 TH JUNE, 2011 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 13 TH JUNE, 2011 PARIDA I.T.A NO.3228/ MUM/2010 DIMPLE DRUMS & BARRELS PVT LTD 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),16, MUMBAI 4. COMMISSIONER OF INCOME TAX, 8 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH D, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI