ITO, Bhubaneswar V. M/s Dwaraka Jewellers, Khurda

ITA 427/CTK/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52366 (ITAT-CUTTACK)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 10-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2010
• Court: TRIBUNAL
• Department Lawyers: AGITATING
• Assessee Lawyers: ASSESSMENT YEAR S; ARE

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO S . 427,428/CTK/2010 AND ITA NOS.314 & 315/CTK/2011 C.O. NOS.1, 2, 19 AND 20 /CTK/2011 (FILED BY AS SESSEE) (ASSESSMENT YEAR S 2006 - 07,2007 - 08, 2005 - 06 AND 2008 - 09) INCOME - TAX OFFICER, WARD 1(2), BHUBANESWAR. VERSUS M/S.DWARKA JEWELLERS, 138, ASHOK NARGAR, BHUBANESWAR PAN: AACFD 5441 Q (APPELLANT) (RESPONDENT) FOR THE A SSESSEE : SHRI P.K.MISHRA, AR FOR THE DEPARTMENT: SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 09.08.2011 DATE OF PRONOUNCEMENT : 12.08.2011 ORDER PER BENCH : THESE APPEALS FOR THE AYS 2006 - 07, 2007 - 08 AND 2008 - 09 ARE BY THE REVENUE AGITATING THE ORDERS OF THE COMMISSIONER O F INCOME - TAX (APPEALS) ON THE SOLITARY GROUND THAT THE VALUATION OF THE CLOSING STOCK OF GOLD ORNAMENTS LYING WITH THE ASSESSEE JEWELLER AND AS ENHANCED BY THE ASSESSING OFFICER HAS BEEN DELETED BY THE LEARNED CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06 VIDE ORDER DT.23.7.2010. THE REVENUE IS ALSO IN APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 AGAINST CANCELLATION OF PENALTY BY THE LEARNED CIT(A) ON THE QUANTUM ADJUDICATED BY THE TRIBUNAL WHICH HAS BEEN CONS IDERED BY THE ASSESSING OFFICER FOR LEVY OF PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME - TAX ACT,1961. 2. CROSS OBJECTIONS HAVE BEEN PREFERRED BY THE ASSESSEE - RESPONDENT FOR ALL THESE FOUR APPEALS WHICH WE PROPOSE TO DISPOSE OF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE SINCE THEY SUPPORT OF ORDER OF THE LEARNED CIT(A) ONLY. 3. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN ITA NOS.427,428/CTK/2010 AND ITA NOS.314 & 315/CTK/2011 C.O. NOS.1, 2, 19 AND 20 /CTK/2011(FILED BY ASSESSEE) 2 CASE FOR THE ASSESSMENT YEAR 2005 - 06 WHEN THE METHOD OF VALUATION OF THE CLOSING STOCK OF JEWELLERY ITEM HAS BEEN ADOPTED BY THE ASSESSEE AT LOWER OF COST OR MARKET VALUE CONSISTENTLY THEREFORE WAS APPRECIATED BY THE LEARNED CIT(A) TO ADOPT THE DIRECTION OF THE TRI BUNAL IN ADOPTING THE PARTICULAR METHOD WHICH THE ASSESSING OFFICER IN THE IMPUGNED AYS HAS SOUGHT TO VALUE HOLDING THAT THE PURCHASE VALUE PER GRAM OF GOLD WAS MORE THAN THE VALUATION OF GOLD IN THE CLOSING STOCK. HE POINTED OUT THAT THE LEARNED ASSESSING OFFICER HAD NOT SET ON OR SET OFF THE INCREASE IN VALUATION TO THE SUBSEQUENT YEARS IN ITSELF WAS FAULTY AND HAS CONSIDERED THE VALUE OF THE GOLD FOR FINDING THE DIFFERENCE BETWEEN THE PURCHASE VALUE AND THE CLOSING STOCK VALUE. THE TRIB UNAL HAD CATEGORIC ALLY MAINTAINED THE ADOPTION OF THE VALUATION OF CLOSING STOCK TO BE CONSISTENT INSOFAR AS IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO REVALUE THE CLOSING STOCK OF JEWELLER WHO CONSIDERING THE PER GRAM RATE OF GOLD WITHOUT INDICATING THE QUANTITY OF GO LD IN THE CLOSING STOCK THEREFORE MAKES THE ASSESSMENT ORDERS FAULTY WHICH THE LEARNED CIT(A) , AFTER REITERATING THE BASIS OF ADOPTION OF VALUE CONSISTENTLY BY THE TRIBUNAL , WAS RELIED UPON. CONSEQUENT THERETO, THE LEARNED CIT(A) CANCELLED THE PENALTY SO L EVIED FOR THE ASSESSMENT YEAR 2005 - 06 WHIC H COPY OF ORDER OF THE TRIBUNAL WAS FURNISHED INDICATING THE DELETION OF THE QUANTUM ADDITION ON ACCOUNT OF VALUATION OF CLOSING STOCK. 4. THE LEARNED DR HAD NO FURTHER CONTROVERTING MATERIAL TO SUPPORT THE APPEALS OF THE REVENUE. 5. WE HAVE CONSIDERED THE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO UPHOLD THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUES RAISED BY THE REVENUE ST AND COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06. VALUATION ITA NOS.427,428/CTK/2010 AND ITA NOS.314 & 315/CTK/2011 C.O. NOS.1, 2, 19 AND 20 /CTK/2011(FILED BY ASSESSEE) 3 OF CLOSING STOCK HAS TO CONSISTENT WHICH THE LEARNED CIT(A) UPHELD. AS NO FURTHER CONTROVERTING MATERIAL ON FACTS HAS BEEN BROUGHT ON RE CORD BY THE REVENUE, WE DISMISS THE APPEALS FILED BY THE REVENUE AND ALLOW THE CROSS OBJECTIONS OF THE ASSESSEE SUPPORTING THE ORDERS OF THE LEARNED CIT(A). 6. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. PRONOUNCED IN OPEN COURT ON DT. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 12.08.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORW ARDED TO : 1. THE APPELLANT: INCOME - TAX OFFICER, WARD 1(2), BHUBANESWAR. 2. THE RESPONDENT: M/S.DWARKA JEWELLERS, 138, ASHOK NARGAR, BHUBANESWAR 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRU E COPY, BY ORDER, SENIOR PRIVATE SECRETARY.