DCIT CIR 3(1), MUMBAI V. HINDUSTAN DIAMOND CO. P. LTD, MUMBAI

ITA 5838/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55436 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 20-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: MITESH N SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI R.S. SYAL, A.M. AND SHRI V. DURGA RAO, J.M. ITA NO. 5838/MUM/2010 ASSESSMENT YEAR : 2006-07 THE DY. COMMISSIONER OF INCOME-TAX(OSD)-3(1), APPELLANT ROOM NO. 607, AAYAKAR BHAVAN, MUMBAI 400 020. VS. M/S HINDUSTAN DIAMOND CO. PVT. LTD., RESPOND ENT 15 TH FLOOR, ATLANTA, NARIMAN POINT, MUMBAI 400 021. APPELLANT BY : MR. V.V. SHASTRI RESPONDENT BY : MR. MITESH N. SHAH DATE OF HEARING : 15/09/2011 DATE OF PRONOUNCEMENT : 23/09 /2011 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- 7, MUMBAI, PASSED ON 18/03/2010 FOR THE ASS ESSMENT YEAR 2006-07 WHEREIN THE REVENUE HAS RAISED THE FOLLOWIN G GROUND OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION O F RS. 14,20,26,386/- MADE BY THE AO ON ACCOUNT OF INTERES T OF INCREASE IN THE VALUATION OF CLOSING STOCK OF ROUGH DIAMONDS . 2. THE AO COMPUTED THE VALUATION OF CLOSING STOCK O N THE BASIS OF AVERAGE PURCHASE PRICE OF ALL THE DIAMONDS PURCHASE D BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR, EXCEPT THE PURCH ASES MADE IN THE LAST FORTNIGHT OF THE YEAR, AT RS. 4,69,139,024.53 AS AGAINST THE VALUE OF THE CLOSING STOCK SHOWN BY THE ASSESSEE AT RS. 3 ,27,112,683.00, RESULTING INTO THE DIFFERENCE OF RS. 14,20,26,386/- , WHICH WAS ADDED ITA NO.5838 /MUM/2010 M/S HINDUSTAN DIAMOND CO. PVT. LTD. 2 TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) DELETED THE ADDITION MADE BY THE AO FOLLOWING THE DECISIONS OF ITAT IN ASSESSEES OWN CASES FOR AY 1989-90, 1992-93, 2002-03 AND 2003 -04 AND ALSO FOLLOWING THE DECISION OF HIS PREDECESSOR IN AY 200 4-05 & 2005-06 IN ASSESSEES OWN CASE. AGGRIEVED, THE REVENUE IS IN A PPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CANVASS ED THAT THE ISSUE UNDER CONSIDERATION IS COVERED BY THE DECISIO NS OF THE ITAT IN ASSESSEES OWN CASES FOR EARLIER YEARS, THE DETAILS OF WHICH ARE AS UNDER:- 1. ITA NO. 7971/BOM/1992, ORDER DT. 31/12/1998 (THIRD MEMBER DECISION UPHOLDING THE DECISION RENDE RED BY THE HONBLE JM) 2. ITA NO. 7971/BOM/1992 FOR AY 1992-93, ORDER DATED 06/08/02 3. ITA NO. 7230/MUM/2005 FOR AY 2002-03, ORDER DT. 09/09/08. 4. ITA NO. 571/MUM/2007, FOR AY 2003-04, ORDER DT. 23/10/08. 5. ITA NO. 3116/MUM/2009, FOR AY 2005-06 ORDER DT. 23/03/10. 4. THE SAID COPIES OF THE ORDERS ARE AVAILABLE ON R ECORD. 5. ON THE OTHER HAND, THE LEARNED DR HAS NOT CONTRO VERTED THE FACTS AVAILABLE ON RECORD. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW AS WELL AS GONE THROUGH THE ORDERS OF THE ITA T CITED (SUPRA). WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AS THE CIT(A) FOLLOWING THE DECISIONS OF THE ITAT IN ASSESSEES OWN CASES OF EA RLIER YEARS(SUPRA) WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE OF CLOSI NG STOCK IN FAVOUR OF THE ASSESSEE, DELETED THE ADDITION MADE BY THE A O OF RS. 14,20,26,386/- ON ACCOUNT OF VALUATION OF CLOSING S TOCK AND, THEREFORE, THE ORDER OF THE CIT(A) IS HEREBY CONFIR MED DISMISSING THE GROUND RAISED BY THE REVENUE. ITA NO.5838 /MUM/2010 M/S HINDUSTAN DIAMOND CO. PVT. LTD. 3 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER, 2011. SD/- SD/- (R.S. SYAL) ( V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 23 RD SEPTEMBER, 2011 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, H BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.