M/ s. P T C Industries Limited , Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 541/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83287 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 31-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K P TANDON

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.541/LKW/2012 ASSESSMENT YEAR:2008 - 09 M/S P.T.C. INDUSTRIES LTD., MALVIYA NAGAR, AISHBAGH, LUCKNOW. PAN:AACBP4377K VS. A.C.I.T., RANGE - V, LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. P. TANDON, ADVOCATE RESPONDENT BY SHRI AMIT NIGAM, D.R. DATE OF HEARING 15/07/2014 DATE OF PRONOUNCEMENT 2 2 /08/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, LUCKNOW DATED 27/08/2012 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, THE LEARNED CIT(A) IN LAW ERRED IN CONFIRMING THE ADDITION OF EXCISE DUTY PAYABLE AMOUNTING TO RS.1,46,887/ - IN VALUATION OF CLOSING STOCK OF FINISHED GOODS KEPT IN BANDED PREMISES. 2. THE LEARNED ASSESSING OFFICER WHILE INVOKI NG SECTION 145A AND MAKING ADDITION OF RS.1,46,887/ - DID NOT DOUBT THAT GOODS WERE NOT KEPT IN BONDED PREMISES AND SIMPLY RELIED ON COMMENTS OF THE AUDITOR AS PER ANNEXURE - B OF TAX AUDIT PAPER. 3. THAT IT IS RESPECTFULLY SUBMITTED THAT ADDITION OF RS.1,46 ,887/ - SUSTAINED BY THE LEARNED CIT(A) MAY KINDLY BE DELETED. 2 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 IN I.T.A. N O.84/LKW/2011 DATED 06/04/2011. HE SUBMITTED A COPY OF THIS TRIBUNAL DECISION. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS DYNAVISION LTD. [2012] 348 ITR 380 (SC) . 4. ON THE OTHER HA ND, LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ADDITION WAS MADE BY ASSESSING OFFICER ON ACCOUNT OF VALUATION OF CLOSING STOCK. IT IS CLAIMED BY THE ASSESSEE TH AT THE CLOSING STOCK WAS KEPT IN BONDED WAREHOUSE BUT IT IS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SHOW THAT THE GOODS WERE KEPT IN THE BONDED WAREHOUSE. NOW IN THE LIGHT OF THESE FACTS, WE EXAMINE THE APPLICABILITY OF THE TRIBUNAL DECISION CITED BY LEARNED A.R. OF THE ASSESSEE. WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE ASSESSING OFFICER AS PER PARA 4 OF ASSESSMENT ORDER WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 4 . CLOSING STOCK VALUATION - ON PERUSAL OF TAX AUDIT REPORT IT IS FOUND THAT ASSESSEE HAS VALUED THE INVENTORY AT NET OF EXCISE DUTY. HOWEVER ON PERUSAL OF COMPUTATION U/S 145A, AS PER ENCLOSURE - B OF TAX AUDIT REPORT, IT IS NOTICED THAT EFFECT ON NET INCOME DUE TO THIS METHOD OF VALUATION OF INVENTORY IS RS.1,46,887/ - . DURING THE COURSE OF SCRUTINY PROCEEDINGS, THIS ISSUE WAS DISCUSSED WITH ASSESSEE. THE AMOUNT OF RS.1,46,887/ - IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE. (ADDITION:RS.1,46,887/ - ). 5.1 FROM THE ABOVE PARA OF THE ASSESSMENT ORDER, IT IS SEEN THAT THERE IS NO REFERENCE MADE BY THE ASSESSING OFFICER THAT THE GOODS IN QUESTION WERE KEPT BY THE ASSESSEE IN BONDED WAREHOUSE OR NOT. HENCE, THIS OBSERVATION OF CIT(A) IN PARA 4 OF HIS ORDER IS WITHOUT ANY BASIS THAT THE 3 ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SHOW THAT THE GOODS WERE KEPT IN BONDED PREMISES. WE FAIL TO UNDERSTAND THAT WHEN IT IS NOT DOUBTED BY THE ASSESSING OFFICER THAT THE GOODS IN QUESTION WERE KEPT IN BONDED WAREHOUSE, WH AT IS THE BASIS OF THIS OBSERVATION OF CIT(A) IN PARA 4 OF HIS ORDER IN THE ABSENCE OF ANY BASIS INDICATED BY HIM FOR SAYING SO . IN ASSESSMENT YEAR 2005 - 06 ALSO, THE TRIBUNAL HAS GIVEN A FINDING THAT NOTHING IS BROUGHT ON RECORD BY THE DEPARTMENT TO CONTR OVERT THIS CONTENTION OF THE ASSESSEE THAT THE GOODS WERE KEPT IN BONDED WAREHOUSE. IN THE PRESENT YEAR ALSO, THE DEPARTMENT HAS NOT BROUGHT ON RECORD ANY MATERIAL TO CONTROVERT THIS CONTENTION OF THE ASSESSEE THAT THE GOODS WERE KEPT IN THE BONDED WAREHO USE AND MERE OBSERVATION OF CIT(A) THAT THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE TO SUPPORT THAT THE GOODS WERE KEPT IN BONDED WAREHOUSE DOES NOT HELP THE REVENUE. THE TRIBUNAL HAS ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEAR 2 005 - 06 AND THEREFORE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR. ACCORDINGLY, THIS ADDITION IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTION ED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 2 /08/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR