ITO 10(2)(3), MUMBAI V. LAWKIM TD, MUMBAI

ITA 4770/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84340 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2013
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: SONALEE GODBOLE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO. 4770/M/2013 ( AY: 2009 - 2010 ) ITO - 10(2)(3), MUMBAI. / VS. LAWKIM LTD., PLANT 11, CORPORATE SECRETARIAL DEPARTMENT, PIROJSHANAGAR, LBS MARG, VIKHROLI, MUMBAI - 79. ./ PAN : AAACL2462N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIVEK BATRA / RESPONDENT BY : MS. SONALEE GODBOLE / DATE OF HEARING : 09.10.2014 / DATE OF PRONOUNCEMENT : 26 .11.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 20.6.2013 IS AGAINST THE ORDER OF THE CIT(A) - 21, MUMBAI DATED 1.4.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING EFFECTIVE GROUND WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING ADDITION U/S 145A OF THE ACT OF AN AMOUNT OF RS. 18,52,776/ - BEING DIFFERENCE IN THE CENVAT CREDIT IN THE CLOSING STOCK AND OPENING STOCK. 3. THE ONLY ISSUE RAISED IN THIS APPEAL RELATES TO APPLICABILITY OF THE PROVISIONS OF SECTION 145A OF THE ACT QUA THE DIFFERENCE IN CENVAT CREDIT IN THE CLOSING STOCK AND OPENING STOCK. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. NIL . ASSESSMENT WAS COM PLETED U/S 143(3) OF THE ACT. IN THE ASSESSMENT AO MADE CERTAIN ADJUSTMENTS TO THE CLOSING STOCK AND OPENING STOCK AND MADE ADDITION OF RS. 18,52,776/ - . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 2 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE SUBMITTED THAT THE S I M I L A R ADJUSTMENT S A R E REQUIRED TO BE MADE IN ALL THE INVENTORIES. WHEN THE SAME IS DONE, THERE IS NO DIFFERENCE IN THE INCOME IF THE PROVISIONS OF SECTION 145A OF THE ACT ARE APPLI ED TO OPENING STOCK, PURCHASES, SALES AND TO THE CLOSING STOCK. CIT (A) CONSIDERED THE SAID SUBMISSIONS OF THE ASSESSEE AND GRANTED RELIEF TO THE ASSESSEE BY DELETING THE SAID ADDITION MADE BY THE AO. AGGRIEVED WITH THE DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 5. DURING THE PROCEEDINGS BEFORE US, REVENUE HAS NOT BROUGHT OUT ANY CONTRARY MATERIAL TO THE SAID SUBMISSIONS OF THE ASSESSEE. LD DR RELIED ON THE ORDER OF THE AO. 6. ON THE OTHER HAND , LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE. ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL AND PARAS 3 AND 3.1 WHEREIN THE DECISION OF THE CIT (A) IS GIVEN , WE ARE OF THE OPINION THAT THE AO CANNOT SELECTIVELY MAKE ADJUSTMENTS ONLY TO THE CLOSING STOCK AND OPENING STOCKS. AO E X P E C T E D TO MAKE S I M I L A R ADJUSTMENTS TO ALL THE INVENTORIES INCLUDING SALES AND PURCHASES. IT IS NOT THE CASE OF THE REVENUE THAT THERE IS AN ESCAPEMENT OF INCOME IF THE SAID PROVISIONS OF SECTION 145A ARE APPLIED UNIFORMLY TO ALL THE INVENTORIES. CONSIDERING THE FA CTUAL MATRIX OF THE PRESENT CASE, WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IN THIS GARD IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEA L OF THE REVENUE IS DISMISSED. ORDER PRONO UNCED IN THE OPEN COURT ON 2 6 T H NOVEMBER, 2014. S D / - S D / - ( SANJAY GARG ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 2 6 /11/2014 . . ./ OKK , SR. PS 3 / 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