ACIT 9(1), MUMBAI V. AJANTA PHARMA LTD, MUMBAI

ITA 4383/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5737 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI SANJAY GARG, JM ./I.T.A. NO.4383/M/2012 ( / ASSESSMENT YEAR: 2009 - 2010 ) ACIT - 9(1), R.NO.223, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. AJANTA PHARMA LTD., AJANTA HOUSE, GOVT. INDL. ESTATE, CHARKOP, KANDIVALI (W), MUMBAI 400 067. ./ PAN : AAACA 5579 P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M.L. PERUMAL, DR / RESPONDENT BY : MADHUR AGARWAL / DATE OF HEARING : 22.1.2014 / DATE OF PRONOUNCEMENT : 31. 1.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 27.6.2012 IS AGAINST THE ORDER OF THE CIT (A) - 19, MUMBAI DATED 12.4.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF RS 4,85,95,725/ - MADE ON ACCOUNT OF VALUE OF CLOSING STOCK IN RESPECT OF UNAVAILED CENVAT BALANCE AS AT YEAR END BY APPLYING PROVISION OF SECTION 145A. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. AT THE OUTSET, SHRI MADHUR AGRAWAL, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUNDS FILED BY THE REVENUE AND MENTIONED THAT THE IDENTICAL ISSUE I.E., THE ADDITION MADE ON ACCOUNT OF CLOSING STOCK IN RESPECT OF UNAVAILED CENVAT WAS DECIDED IN FAVOUR OF THE ASSESSEE VIDE THE ORDER OF THE TRIBUNAL IN ITA NO.7755/M/2 011 (AY 2008 - 2009), DATED 20.3.2013. IN THIS REGARD, LD COUNSEL 2 FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE RELEVANT PARA 4 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) AND READ OUT THE CONTENTS OF THE SAID PARA WHICH READS AS UNDER: 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE ORDER OF THE TRIBUNAL REFERRED BY THE LD COUNSEL. WE FIND THAT GROUND NO.1 OF THAT APPEAL IS IDENTICAL TO GROUND NO.1 OF PRESENT APPEAL. THE TRIBUNAL HAS DECIDED THE ISSUE RAISED BY GROUND NO.1 AT PARA 2 ON PAGE 2 OF ITS ORDER AS UNDER: ISSUES RAISED IN THE GROUNDS OF APPEAL ARE TAKEN UP IN SERIATIM. AT THE TIME OF HEARING, LD DR FAIRLY SUBMITTED THAT THE FIRST ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSE AND AGAINST THE REVENUE. WE, THEREFORE, AFFIR M THE ORDER OF THE LD CIT (A) AND REJECT THE GROUND NO.1 OF THE REVENUE. THE LD DR COULD NOT BRING ANY DISTINGUISHING ORDER BEFORE US. SINCE, ONE OF US (HONBLE VICE PRESIDENT) IS THE AUTHOR OF THE SAID DECISION OF THE TRIBUNAL, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ITA NO.5560/M/2008 (SUPRA), WE REJECT GROUND NO.1 OF THE REVENUE. 4. LD COUNSEL ALSO BROUGHT OUR ATTENTION TO THE IMPUGNED ORDER AND MENTIONED THAT CIT (A) GRANTED RELIEF TO THE ASSESSEE CONSIDERING THE BINDING JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. MAHALAXMI GLASS WORKS PVT. LTD (2009 TIOL - 233 - HC - MUM - IT). PARA 4.2 OF THE IMPUGNED ORDER IS RELEVANT IN THIS REGARD WHICH READS AS UNDER: 4.2. THIS ISSUE HAD INDEED CAME UP FOR CONSIDERATION IN THE E ARLIER YEARS. THE APPELLANT IS FOLLOWING THE NET METHOD OF ACCOUNTING FOR MODVAT AS MANDATED BY SECTION 211 (3A) OF COMPANIES ACT READ WITH AS - 2 OF ICAI PERTAINING TO VALUATION OF INVENTORIES. IT IS FURTHER SUBMITTED THAT COMPLIANCE WITH THE PROVISION O F SECTION 145A IS NEUTRAL AS COMPARED TO THE NET METHOD ADOPTED UNDER THE MANDATE OF PROVISION OF THE COMPANIES ACT. HENCE, IT IS SUBMITTED THAT NO ADJUSTMENT IS WARRANTED UNDER SECTION 145A OF THE ACT. IN THIS REGARD, THE APPELLANT HAS FILED COPY OF MEM ORANDUM, TRADING & PROFIT & LOSS ACCOUNT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 145A OF THE ACT AND IT IS SUBMITTED IT CAN BE SEEN THAT THERE IS NO IMPACT ON DETERMINATION OF PROFIT & LOSS A/C AFTER GIVING EFFECT TO ADJUSTMENTS CONTEMPLATED UNDER SEC TION 145A OF THE ACT. THE APPELLANT HAS ALSO PLACED ON RECORD COPY OF DECISION IN THE CASE OF CIT VS. MAHALAXMI GLASS WORKS PVT LTD (2009 TIOL - 233 - HC - MUM - IT). THE SAID DECISION SUPPORTS THE VIEW POINT OF THE APPELLANT THAT, IF NO GROSS UP, THE IMPACT IS TAX NEUTRAL, NO ADDITION IS REQUIRED TO BE MADE. THE APPELLANT, THROUGH ITS WORKING, HAS SHOWN THAT WHEN COMPLIANCE WITH PROVISION OF SECTION 145A ARE MADE BY PREPARING MEMORANDUM ACCOUNT, NO ADDITION IS WARRANTED SINCE IT IS TAX NEUTRAL. THEREFORE, THE ADDITION OF RS. 4,85,95,725/ - IS REQUIRED TO BE DELETED AND IS ACCORDINGLY DELETED SUBJECT TO VERIFICATION ON THE MEMORANDUM, TRADING A/C AND PROFIT & LOSS ACCOUNT IN ACCORDANCE WITH PROVISIONS OF SECTION 145A OF THE ACT. 5. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE AND THE ORDER OF THE CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE R E V E N U E A R E D I S M I S S E D . 6. IN THE RESULT, APPEAL OF THE R E V E N U E I S D I S M I S S E D . 3 ORDER PRONOU NCED IN THE OPEN COURT ON 31 ST JANUARY, 2014. SD/ - SD/ - (SANJAY GARG ) (D. KARUNAKARA RAO ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31 .1.2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI