The ITO, Ward-4(2)., Ahmedabad V. Jalaram Ceramics Ltd, Ahmedabad

ITA 682/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60431 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA NO.682/ AHD/2012 A.YR. 2008- 09. 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AH MEDABAD (BEFORE SHRI G.C. GUPTA,VICE PRESIDENT & SHRI ANIL CHATURVEDI A.M.) I.T.A. NO. 68 2/AHD/2012. (ASSESSMENT YEAR: 2008 -09) THE INCOME TAX OFFICER, WARD 4(2), ROOM NO.105, NAVJIVAN TRUST BUILDING, OFF. ASHRAM ROAD, AHMEDABAD (APPELLANT) VS. JALARAM CERAMICS LTD., KRISHNA NAGAR, OPP. INDIA COLONY, NEAR UNION BANK OF INDIA, BAPUNAGAR, AHMEDABAD. (RESPONDENT) PAN: AAACJ 4876E BY REVENUE : SHRI VINOD TANWANI, SR.D.R. BY ASSESSEE : NONE. ( )/ ORDER DATE OF HEARING : 15-5-2012 DATE OF PRONOUNCEMENT : 25-5-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT (A)-VIII, AHMEDABAD DATED 20-1-2012 FORE THE ASSESSMENT YEAR 2008-09. 2. NOTICE OF HEARING WAS SERVED AT THE TIME OF FILI NG OF APPEAL I.E. ON 2-3- 2012 INTIMATING THE DATE OF HEARING. HOWEVER, ON TH E DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEES SIDE NOR ANY A DJOURNMENT APPLICATION WAS FILED, AND THEREFORE THE APPEAL IS DISPOSED OF ON MERIT. ITA NO.682/ AHD/2012 A.YR. 2008- 09. 2 3. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE R EADS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.22,59,963/- BY INCREASING THE AMOUNT OF VALUATION OF FINISHED GOODS INCLUDING THE AMOUNT OF EXCISE DUTY PAYABLE ON VALUE OF FINISHED GOODS BY APPLYING THE PROVISION OF SECT ION 145A. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CERAMIC GLAZE, TILES E TC. IT FILED ITS RETURN OF INCOME ON 29-09-2008 DECLARING TOTAL INCOME AT RS.1 ,87,93,030/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. ASKED THE ASSESSEE TO JUSTIFY THE VALUATION OF CLOSING STOCK AS IT DID NOT INCLUDE THE EXCISE DUTY. THE AS SESSEE SUBMITTED ITS WRITTEN REPLY VIDE LETTER DATED 16-10-2010 WHEREIN IT WAS SUBMITTED THAT IT WAS THE CONSISTENT PRACTICE TO VALUE STOCK EXCLUDIN G EXCISE DUTY AND FURTHER IT WAS TAX NEUTRAL. THE SUBMISSIONS OF ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER AND HE MADE ADDITION ON ACCOUNT O F UNDER VALUATION OF CLOSING STOCK OF RS.22,59,963/- AND DETERMINED THE TOTAL INCOME AT RS.2.10,52,993/- VIDE ORDER DATED 14-12-2010. 5. THEREAFTER, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE CIT (A) AGAINST THE ABOVE CONFIRMATION. 6. THE CIT (A) DELETED THE ADDITION MADE BY THE A.O . BY OBSERVING AS UNDER:- 3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E SUBMISSION OF THE APPELLANT CAREFULLY. IT HAS BEEN BROUGHT TO THE NOTICE THAT ITA NO.682/ AHD/2012 A.YR. 2008- 09. 3 RECENTLY THE HONBLE ITAT C BENCH, AHMEDABAD HAS PRONOUNCED COMMON ORDER VIDE ITA NOS.2187/AHD/2009 & 839/AHD/2 010 FOR A.Y. 2005-06 & 2006-07 RESPECTIVELY ON 6-1-2012 IN THE A PPELLANTS OWN CASE ON THE SIMILAR ISSUE OF VALUATION OF CLOSING S TOCK OF FINISHED GOODS WHICH IS IN FAVOUR OF THE APPELLANT. THE CONC LUDING PARA NO.5 IS REPRODUCED AS UNDER:- HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, IT WAS FOUND THAT THE ASSESSEE HAD MAINTAINED A SEPARATE ACCOUNT FOR THE EXCISE DUTY AND THAT THE ASSESSEE HAD PAID THE EXCISE DUTY LEVIABLE ON FINISHED GOOD STOCK BEFORE THE FILING OF THE RETURN . THE EXCISE DUTY WAS NOT DEBITED TO P & L ACCOUNT AND IT WAS NOT CLA IMED AS EXPENDITURE. FOR THIS PROPOSITION CASE LAW CITED IS CIT VS. PARRY CONFECTIONARY 299 ITR 321. THE NEXT ARGUMENT IS THA T THE EXCISE DUTY IS LEVIABLE AND INCLUDIBLE IN THE CLOSING STOCK WHE N THE STOCK IS CLEARED FROM THE FACTORY. SINCE, IT WAS NOT CLEARED FROM THE FACTORY, THEREFORE, NOT INCLUDIBLE IN THE VALUE OF THE CLOSI NG STOCK. CASE LAW RELIED UPON IS ACIT VS. NARMADA CHEMATUR PETROCHEMI CALS LTD. 327 ITR 369 (GUJ.). IT HAS ALSO BEEN ARGUED THAT IN THE PAST NO SUCH ADJUSTMENT WAS EVER MADE; HENCE THE ADJUSTMENT FOR THE YEAR UNDER CONSIDERATION IS OTHERWISE REVENUE NEUTRAL FOR THIS LEGAL PROPOSITION CASE LAW RELIED UPON IS CIT VS. REALEST BUILDERS AN D SERVICES LTD. 307 ITR 202 (SC).ASSESSEE HAS ALSO PLACED RELIANCE ON ASHWIN A. SHAH 1 ITR 356 (TRIB) [AHD.] FOR THE LEGAL PROPOSIT ION THAT THE LIABILITY ARISES ONLY AT THE TIME OF REMOVAL OF GOODS FROM TH E FACTORY. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE AND THE LAW DISCUSSED IN ABOVE, WE HEREBY REVERSE T HE FINDING OF THE LD. CIT (A) AND ALLOW THIS GROUND. ASSESSEES APPEA L IS ALLOWED. 3.1. IN VIEW OF THE ABOVE DECISION OF THE ITAT, AHM EDABAD BENCH AND KEEPING IN VIEW THAT THE ISSUE THIS YEAR IS IDE NTICAL AS IN THE EARLIER YEAR IN WHICH THE ITAT HAS HELD IN FAVOUR O F THE APPELLANT, THE ADDITION MADE BY THE A.O. IS DELETED. 7. AGGRIEVED BY THE ORDER OF CIT (A), THE REVENUE I S NOW IN APPEAL BEFORE US. THE LD. D.R. AT THE OUTSET FAIRLY CONCE DED THAT THE ISSUE IN ITA NO.682/ AHD/2012 A.YR. 2008- 09. 4 PRESENT APPEAL IS COVERED AGAINST THE REVENUE IN VI EW OF THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. NARMADA CHEMATUR PETROCHEMICALS LTD. 327 ITR369 (GUJ.) AND IS ALSO C OVERED IN ASSESSEES FAVOUR BY THE DECISION OF HONBLE ITAT IN THE ASSES SEES OWN CASE (IN ITA NO.2187/AHD.2009 & 839/AHD/2010) FOR ASSESSMENT YEA R 2005-06 AND 2006-07. 8. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. AS SUBMITTED BY THE LD. D.R. SINCE THE ISSUE IN THE PR ESENT APPEAL IS COVERED IN ASSESSEES FAVOUR IN VIEW OF THE DECISION OF GUJ ARAT HIGH COURT IN THE CASE OF NARMADA CHEMATUR (SUPRA) AND DECISION OF CO -ORDINATE BENCH IN ITA NO.2187 & 839/AHD/2009,. WE FIND NO REASON TO I NTERFERE IN THE ORDER OF CIT (A).THUS, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25 - 5 - 2012 . SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA NO.682/ AHD/2012 A.YR. 2008- 09. 5 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-VIII, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 8 - 5 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 22 / 5 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..