DCIT CIR 6(2), MUMBAI V. CONNECT I MOBILE TECHNOLOGIES P.LTD, MUMBAI

ITA 7039/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100935 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2013
• Court: TRIBUNAL
• Department Lawyers: S K MAHAPATRA
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 7039/M/2013 (AY 2009 - 2010) DCIT - CIR 6(2), R.NO.563, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. / VS. M/S. CONNECT I MOBILE TECHNOLOGIES P LTD., PENINSULA POINT, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 400 013. ./ PAN : AAACH5945G ( / APPELLANT) .. ( / RESPONDENT ) C.O. NO.22/M/2015 (ARISING FROM ITA NO. 7039/M/2013) (AY 2009 - 2010) M/S. CONNECT I MOBILE TECHNOLOGIES P LTD., PENINSULA POINT, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 400 013. / VS. DCIT - CIR 6(2), R.NO.563, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. ./ PAN : AAACH5945G CROSS OBJECTOR .. ( / RESPONDENT ) / ASSESSEE BY : SHRI M.P. LOHIA AND HEMEN CHANDARIYA / REVENUE BY : SHRI S.K. MAHAPATRA, DR / DATE OF HEARING : 23.07.2015 / DATE OF PRONOUNCEMENT : 31 .08.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THE CAPTIONED APPEAL ITA NO.7039/M/2013 IS FILED BY THE REVENUE AND THE CROSS OBJECTION NO.22/M/2015 IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 12, MUMBAI DATED 19.9.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. SINCE, THE ISSUES RAISED IN BOTH THESE APPEALS ARE CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS 2 CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. ITA NO.7039/M/2013 (AY 2009 - 2010) (BY REVENUE) 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN GIVING RELIEF BASED ON THE HONBLE JURISDICTIONAL ITAT DECISION IN THE CASE OF DCIT, CC - 34, MUMBAI VS. GANDHAR OIL REFINERY (INDIA) LTD (2006) 9 SOT 608 WITHOUT APPRECIATING THE SUM AND SUBS TANCE OF THE RATIO OF DECISION OF GANDHAR OIL REFINERY (INDIA) LTD AND WITHOUT VERIFYING AND CONSIDERING THAT ADJUSTMENT (ADDITION) OF EXCISE DUTY AND VAT WAS MADE TO THE OPENING STOCK AND CLOSING STOCK RIGHT FROM AY 1998 - 99 ONWARDS, WHEN SECTION 145A HAS BEEN BROUGHT ON THE STATUTE OR NOT. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN APPRECIATING THAT MAKING ADJUSTMENT IN VALUE OF INVENTORIES IN OPENING STOCK FOR AY 2009 - 2010 WITHOUT CONSIDERING WHETHER CORRE SPONDING ADJUSTMENTS IN THE OPENING STOCK AND CLOSING STOCK OF EARLIER YEARS WOULD NOT AMOUNT TO UNDER ASSESSMENT OF INCOME FOR AY 2009 - 2010. 3. BEFORE US, AT THE OUTSET, LD REPRESENTATIVES OF BOTH THE PARTIES INFORMED THAT THE ABOVE GROUNDS RAISED BY T HE REVENUE ARE MISPLACED AS THE CIT (A) HAS GRANTED RELIEF TO THE ASSESSEE CONSIDERING THE ITAT DECISION IN THE CASE OF DCIT, CC - 34, MUMBAI VS. GANDHAR OIL REFINERY (INDIA) LTD (2006) 9 SOT 608 . FURTHER, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE BY STATING THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN CELLULAR HANDSETS AND ACCESSORIES . ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 38,44,73,220/ - UNDER THE NORMAL PROVISIONS OF THE ACT AND BOOK LOSS OF RS. 38,63,40,226/ - UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 38,06,03,190/ - WHICH INCLUDES THE DISALLOWANCE OF RS. 35,16,798/ - U/S 145A OF THE ACT . AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS, AO REALIZED THAT THE ASSESSEE HAS ALREADY ADJUSTED THE INVENTORIES AS PER THE PROVISIONS OF SECTION 145A OF THE ACT. HOWEVER, AGGRIEVED WITH SAID DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, AND ON FINDING THAT THE ADJUSTMENTS ARE NOT DONE TO ALL THE INVENTORIES, CIT (A) GRANTED RELIEF TO THE ASSESSEE. AGGRIEVED WITH THE SAID 3 DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE MENTIONED FACTS AND RELIED ON THE ORDER OF THE CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED ON RECORD. AFTER HEARING BOTH THE PARTIES AS WELL AS CONSIDERING THE CONCURRENCE OF BOTH THE PARTIES O N THE UNWANTED APPEAL FILED BY THE REVENUE, WE FIND THIS IS A CASE WHERE DURING THE ASSESSMENT PROCEEDINGS AO INVOKED THE PROVISIONS OF SECTION 145A OF THE ACT AND MADE A DISALLOWANCE OF RS. 35,16,798/ - AND ON FINDING THAT THE ADJUSTMENTS ARE DONE TO ALL THE INVENTORIES, DURING THE FIRST APPELLATE PROCEEDINGS, CIT (A) GRANTED RELIEF AND THE SAME IS IN TUNE WITH THE SETTLED PROPOSITION ON THE ISSUES UNDER CONSIDERATION. UNDER THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE GR OUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. ACCORDINGLY WE ORDER AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. CO.NO. 22/M/2013 (AY2009 - 2010) (BY ASSESSEE) 8. IN THIS CROSS OBJECTION, ASSESSEE RAISED THE FOLLOWING CROSS OBJECTION WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) (1) ERRED IN CONFIRMING THE ACTION OF THE AO OF MAKING AN ADJUSTMENT BY APPLYING SECTION 145A OF THE ACT. (2) ERRED IN NOT ACCEPTING THE RESPONDENTS CONTENTION THAT IRRESPECTIVE OF WHETHER THE INCLUSIVE OR EXCLUSIVE METHOD OF VALUATION OF STOCK IS FOLLOWED BY THE RESPONDENT UNDER SECTION 145A OF THE ACT, THE AMOUNT OF EXCISE DUTY / VALUE ADDED TAX WOULD HAVE NO IMPACT ON THE TAXABLE PROFITS OF THE RESPONDENT. (3) FAILED TO APPRECIATE THAT THE RESPONDENT HAS CONSISTENTLY VALUED ITS INVENTORY AS PER THE ACCOUNTING PRINCIPLES LAID DOWN BY ACCOUNTANT STANDARD - 2 VALUATION OF INVENTORIES ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANT S OF INDIA AND THE SAID TREATMENT HAS ALSO BEEN ACCEPTED BY THE TAX DEPARTMENT IN PRECEDING AND SUCCEEDING ASSESSMENT YEARS. 9. CONSIDERING OUR DECISION GIVEN WHILE ADJUDICATING THE REVENUES APPEAL IN THE ABOVE PARAGRAPHS OF THIS ORDER, WHEREIN WE HAVE DISMISSED THE APPEAL OF THE REVENUE, AS WELL AS THE CROSS OBJECTIONS RAISED BY THE ASSESSEE BEING SUPPORTIVE TO 4 THE ORDER OF THE CIT (A), THE ASSESSES CROSS OBJECTIONS ARE REQUIRED TO BE DISMISSED. ACCORDINGLY, WE DISMISS THE CROSS OB JECTIONS RAISED BY T HE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE AND THE CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED . ORDER PRONOUN CED IN THE OPEN COURT ON 31 ST AUGUST, 2015. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31 .8 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI