DCIT CIR 4(2), MUMBAI V. GOPALDAS VISRAM, MUMBAI

ITA 6028/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56237 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: RAJIV KHANDELWALA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 6028/MUM/2010 ASSESSMENT YEAR : 2006-07. DY. COMMISSIONER OF INCOME-TAX, M/S GOPALDAS VISRAM, CIRCLE-4(2), MUMBAI. VS. 18, SHYAMALDAS GANDHI MARG, MUMBAI 400 002. PAN AACCG 4503F. APPELLANT. RESPONDENT APPELLANT BY : SHRI A.K. NAYAK . RESPONDENT BY: SHRI RAJIV KHANDELWALA. DATE OF HEARING : 01-12-2011. DATE OF PRONOUNCEMENT : 16-12-2011. O R D E R. PER P.M. JAGTAP, A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-8, MUMBAI DATED 10-05-2010 AND THE SOL ITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE ADDITION THAT IS LIABLE TO BE M ADE TO THE VALUE OF CLOSING STOCK ON ACCOUNT OF EXCISE DUTY. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF TRADING AND EXPORTING PHARMACEUTICAL PR ODUCTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 30-01-2006 DECLARING TOTAL INCOME OF RS.1,05,56,333/-. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT EXCISE DUTY RELATING TO CLOS ING STOCK AMOUNTING TO 2 ITA NO.6028/MUM/2010 ASSESSMENT YEAR:2006-07 RS.15,88,832/- WAS NOT INCLUDED BY THE ASSESSEE IN THE VALUE OF CLOSING STOCK. IN THIS REGARD, THE SUBMISSION OF THE ASSESSEE THAT IT WAS FOLLOWING EXCLUSIVE METHOD WAS NOT FOUND ACCEPTABLE BY THE AO IN VIEW OF THE P ROVISIONS OF SECTION 145A AND RELYING ON THE SAID PROVISIONS, HE ADDED THE EXCISE DUTY AMOUNT OF RS.15,88,832/- TO THE VALUE OF CLOSING STOCK. ON APPEAL, THE LEARN ED CIT(APPEALS) UPHELD THE ACTION OF THE AO IN INCLUDING THE AMOUNT OF EXCISE DUTY IN THE VALUE OF CLOSING STOCK BUT DIRECTED HIM TO MAKE SUCH ADJUSTMENT EVEN IN RESPECT OF OPENING STOCK. FOR THIS CONCLUSION, THE LEARNED CIT(APPEALS) RELIE D INTER ALIA, ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MA HALAXMI GLASS WORKS PVT. LTD. RENDERED ON 1 ST APRIL, 2009. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRES ENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED B Y THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MAHALAXMI GLASS WORKS PVT. LTD. (SUPRA) IN FAVOUR OF THE ASSESSEE WHEREIN IT WAS HE LD THAT IN ORDER TO GIVE EFFECT TO THE PROVISIONS OF SECTION 145A, IF THERE IS ANY CHA NGE IN THE CLOSING STOCK AT THE END OF THE YEAR, THEN THERE MUST NECESSARILY BE A C ORRESPONDING ADJUSTMENT MADE IN THE OPENING STOCK OF THAT YEAR. RESPECTFULLY FOLLOW ING THE SAID DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M AHALXMI GLASS WORKS PVT. LTD. (SUPRA) WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) DIRECTING THE AO TO MAKE ADJUSTMENT ON ACCOUNT OF EXCISE DUTY (CE NVAT CREDIT) TO THE VALUE OF OPENING STOCK AS WELL AS CLOSING STOCK AND DISMISS THIS APPEAL OF THE REVENUE. 3 ITA NO.6028/MUM/2010 ASSESSMENT YEAR:2006-07 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF DEC.,2011. SD/- SD/- (V. DURGA RAO) (P.M. J AGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 16 TH DEC., 2011. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. WAKODE