NR JET ENTERPISES LTD, MUMBAI V. DCIT CIR 7(1), MUMBAI

ITA 6247/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88464 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 6247/MUM/2010 (ASSESSMENT YEAR: 2007-08) M/S. NR JET ENTERPRISES LTD. VS. DCIT, CIRCLE 7(1) 64-66 SENAPATI BAPAT MARG MAHIM, MUMBAI400016 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AAACN5895K APPELLANT RESPONDENT ITA NO. 8651/MUM/2011 (ASSESSMENT YEAR: 2008-09) M/S. NR JET ENTERPRISES LTD. VS. INCOME TAX OFFICER 7(1)(1) 64-66 SENAPATI BAPAT MARG MAHIM, MUMBAI400016 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AAACN5895K APPELLANT RESPONDENT APPELLANT BY: SHRI KIRIT KAMDAR & SHRI PRANAY GANDHI RESPONDENT BY: SHRI V.K. BORA DATE OF HEARING: 03.03.2015 DATE OF PRONOUNCEMENT: 03.03.2015 O R D E R PER D. MANMOHAN, V.P. THESE APPEALS OF THE ASSESSEE-COMPANY ARE DIRECTED AGAINST THE ORDERS PASSED BY THE CIT(A) 13, MUMBAI AND THEY PERTAIN TO ASSESSMENT YEARS 2007-08 AND 2008-09. COMMON ISSUE IS INVOLVED IN BO TH THESE APPEALS AND THEREFORE THEY ARE TAKEN UP TOGETHER. 2. IN A.Y. 2007-08 THE ONLY ISSUE UNDER CONSIDERATION IS AS TO WHETHER THE CIT(A) ERRED IN DIRECTING THE DCIT TO PREPARE T HE PROFIT & LOSS ACCOUNT OF THE ASSESSEE BY INCLUDING THE ELEMENT OF EXCISE DUT Y UNDER SECTION 145A OF THE ACT AND ACCORDINGLY MAKE AN ADDITION TO THE TOT AL INCOME. IN THE ALTERNATIVE IT WAS CONTENDED THAT IF EXCISE DUTY IS INCLUDED IN THE VALUE OF ITA NO. 6247&8651/MUM/2010 M/S. NR JET ENTERPRISES LTD. 2 CLOSING STOCK SIMILAR ADJUSTMENT HAS TO BE MADE TO THE OPENING STOCK ALSO; AO OUGHT TO HAVE INCLUDED THE DUTY ELEMENT IN THE P URCHASES, SALES AND CLOSING STOCK. WITHOUT PREJUDICE IT WAS CONTENDED T HAT MAKING A SEPARATE ADDITION WOULD AMOUNT TO DOUBLE ADDITION. 3. THE AO AS WELL AS THE CIT(A) FOLLOWED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF MELMOULD CORPORATI ON 202 ITR 789 WHILE COMING TO THE CONCLUSION THAT AS PER SECTION 145A O F THE ACT, INSERTED W.E.F. 01.04.1999, EXCISE DUTY ELEMENT HAS TO BE INCLUDED WHILE VALUING CLOSING STOCK BUT THERE CANNOT BE ANY ADJUSTMENT TO THE OPE NING STOCK. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A COPY OF THE ORDER PASSED BY THE ITAT B BENCH, MUMBAI IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 AN D 2004-05 (ITA NOS. 1357/MUM/2007 DATED 22.12.2008 & ITA NO. 118/MUM/20 09 DATED 25.03.2013) WHEREIN IDENTICAL ISSUE WAS SET ASIDE T O THE FILE OF THE AO BY OBSERVING THAT ADJUSTMENTS UNDER SECTION 145A ON AC COUNT OF ANY DUTY, TAX, ETC. IS REQUIRED TO BE MADE AT EACH STAGE, I.E. OPE NING STOCK, PURCHASES, SALES AS WELL AS CLOSING STOCK. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IDENTICAL ISSUE WAS DECIDED BY THE H ON'BLE BOMBAY HIGH COURT IN THE CASE OF MAHALAXMI GLASS WORKS (P) LTD. 318 ITR 116. 5. ON THE OTHER HAND, THE LEARNED D.R. STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFU LLY PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT IN ASSESSEES OWN CASE FOR EARLIER YEARS AND ALSO IN THE LIGHT OF THE DECI SION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) WE SET ASIDE THE MATTER TO THE F ILE OF THE AO TO MAKE APPROPRIATE ADJUSTMENTS TO THE OPENING STOCK, ETC. AFTER OBTAINING RELEVANT INFORMATION FROM THE ASSESSEE IN THIS REGARD. 7. IN RESPECT OF THE APPEAL FOR A.Y. 2008-09 ASSESSEE, VIDE GROUND NOS. 3 & 4, CONTENDS THAT THE LEARNED CIT(A) ERRED IN NOT DIRECTING THE AO TO ALLOW SET OFF OF BROUGHT FORWARD LOSSES. THIS IS PURELY C ONSEQUENTIAL IN NATURE. SINCE THE MAIN ISSUE IS SET ASIDE TO THE FILE OF TH E AO IN LINE WITH THE VIEW ITA NO. 6247&8651/MUM/2010 M/S. NR JET ENTERPRISES LTD. 3 TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR EA RLIER YEARS, WE HEREBY SET ASIDE THIS ISSUE ALSO TO BE RECONSIDERED AFTER GIVI NG EFFECT TO THE DIRECTIONS GIVEN BY US WITH REGARD TO GROUND NOS. 1 & 2. 8. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AR E TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2015. SD/- SD/ ( CHANDRA POOJARI ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 3 RD MARCH, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 13, MUMBAI 4. THE CIT 7, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.