M/s Splendid Builders (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 583/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58532 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SRUJANI MOHANTY
• Assessee Lawyers: GAUTAM JAIN S

Judgement Text

ITA NO. 583/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 583/DEL/2011 A.Y. : 2007-08 M/S SPLENDID BUILDERS (P) LTD., 110, BABAR ROAD, NEW DELHI 110 001 (PAN: AAACS2185F) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 9(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. SALIL AGGARWAL AND GAUTAM JAIN, ADVOCATES, DEPARTMENT BY : MRS. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 07.1.2 011 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF ` 7, 17,892/- ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK OF JEERA. 3. IN THIS CASE ASSESSING OFFICER OBSERVED THAT A SSESSEE HAS VALUED THE CLOSING STOCK OF JEERA AT ` 114.22 PER KG. AND CONCLUDED THAT THIS WAS ON THE LOWER SIDE AS THE ASSESSEE HAS PURCHASE D JEERA ON 29.3.2007 AT THE RATE OF ` 118.89 PER KG. THE ASS ESSEE ON THE OTHER HAND, GAVE THE QUOTATION OF SPOT RATES AS PROVIDED BY MCX AT ` 114.23. THE ASSESSING OFFICER DID NOT AGREE WITH THE RATE QUOTED WITH ITA NO. 583/DEL/2011 2 THE MCX AND APPLIED THE RATE OF 118.97 PER KG. ON T HE BALANCE STOCK OF 1,88,646 KG. MAKING AN ADDITION OF ` 7,17,892/-. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE SUBMITTED THAT IT CAN VALUE THE CLOSING STOCK AT C OST OR MARKET WHICHEVER IS LESS. IN THIS CASE MARKET RATE WAS LO WER THAN THE COST AND HENCE THE ASSESSING OFFICER HAS ERRED IN RELYI NG ON THE RATE OF ` 118.99 PER KG. LD. COMMISSIONER OF INCOME TAX (APPEA LS) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. THE COGENC Y OF THE QUOTATION GIVEN BY THE ASSESSEE WAS NOT ACCEPTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, HE PROCEEDED TO A FFIRM THE ACTION OF THE ASSESSING OFFICER. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. IT IS A SETTL ED LAW THAT CLOSING STOCK CAN BE VALUED AT COST OR MARKET VALUE WHICHEV ER IS LOWER. IN THIS CASE, THE ASSESSEE HAS PURCHASED JEERA AT ` 11 8.99 PER KG. THE ASSESSEE HAS GIVEN QUOTATION OF VALUE AT ` 114.23 . THE AUTHORITIES BELOW HAVE NOT ACCEPTED THIS QUOTATION WITHOUT BRIN GING ON RECORD ADEQUATE MATERIAL TO PROVE THAT THE QUOTATIONS GIV EN BY THE ASSESSEE WAS NOT CORRECT. ASSESSEE IN THIS REGARD AT PAGE NO. 66 OF THE PAPER BOOK HAS SUBMITTED THE QUOTATION WHICH CLEARLY DEMON STRATES THAT THE RATES FOR CLOSING MARKET PRICE FOR FINANCIAL YE AR 2006-07 IS ` 114.23 PER KG ON 30.3.2007 AT 11.17 AM. IN OUR CONSIDERED OPINION, THE ITA NO. 583/DEL/2011 3 SUBMISSION OF THE ASSESSEES COUNSEL IS COGENT ENOU GH. HENCE, WE ARE ACCEPTING THE SAME. WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/1/2012, U PON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 25/1/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES