ASST CIT 8(1)(1), MUMBAI V. R.R. KABEL LTD, MUMBAI

ITA 7205/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3532 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 03-12-2014
• Court: TRIBUNAL
• Department Lawyers: CAPT PRASAD S ARYA
• Assessee Lawyers: DR K SHIVARAM
• Section: 14A; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & PAWAN SINGH (JM) I.T.A. NO. 7205 /MUM/ 20 1 4 (ASSESSMENT YEAR 20 11 - 12 ) ACIT 8(1)(1) ROOM NO. 624 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. R.R. KABEL LTD. RAM RATNA HOUSE VICTORIA MILL COMPOUND PANDURANG BUDHKAR MARG, WORLI MUMBAI - 400 013. ( APPELLANT ) ( RESPONDENT ) PAN NO . AABCR3352C ASSESSEE BY DR. K. SHIVARAM DEPARTMENT BY CAPT. PRASAD S. ARYA DATE OF HEARING 4 . 7 . 201 6 DATE OF PRONOUNCEMEN T 4 . 7 . 201 6 O R D E R PER B.R. BASKARAN(AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 19.9.2014 PASSED BY LEARNED CIT(A) - 13, MUMBAI AND IT RELATES TO A.Y. 2011 - 12. 2. THE REVENUE IS CONTESTING THE DECISION RENDERED BY LE ARNED CIT(A) ON FOLLOWING ISSUES : (A) DISALLOWANCE MADE U/S. 14A OF THE ACT. (B) DELETION OF THE ADDITION MADE U/S. 145 OF THE ACT. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. FIRST ISSUE RELATES TO THE DELETION OF THE DISALLOWANCE OF INTEREST MADE U/ S. 14A OF THE ACT. WE NOTICED THAT LEARNED CIT(A) HAS PASSED THE ORDER BY FOLLOWING THE DECISION RENDERED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE IN ITA NO. 3380/MUM/ 2013 RELATING TO A.Y. 2009 - 10. WE NOTICED THAT THE TRIBUNAL HAS R.R. KABEL LTD. 2 TAKEN NOTE OF THE FACT THAT ALL THE LOANS WERE SECURED LOANS AND THEY HAVE BEEN USED FOR SPECIFIC PURPOSES. FURTHER, PERUSAL OF THE BALANCE - SHEET OF THE ASSESSEE ALSO SHOWS THAT THE OWN FUNDS AVAILABLE WITH THE ASSESSEE IS IN FAR EXCESS OF THE INVESTMENT MADE. HENCE WE ARE OF THE VIEW THAT THE INTEREST DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER RULE 8D(2)(II) HAS BEEN RIGHTLY DELETED BY LEARNED CIT(A) AND ACCORDINGLY WE UPHOLD HIS ORDER ON THIS ISSUE. 4. NEXT ISSUE RELATES TO THE ADDITION MADE U/S. 145 A OF THE ACT. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS NOT INCLUDED EXCISE DUTY IN THE VALUATION OF THE CLOSING STOCK AND ACCORDINGLY WORKED OUT THE EXCISE DUTY COMPONENT ON THE OPENING AND CLOSING STOCK OF THE ASSESSEE. T HE SAID WORKING CALLED FO R AN ADDITION OF ` 92,97,132/ - AND ACCORDINGLY ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED A CHART SHOWING THAT IT WAS FOLLOWING EXCLUSIVE METHOD OF ACCOUNTING AND NET EFFECT UNDER EXCLUSIVE MET HOD OR INCLUSIVE METHOD WAS NIL. LEARNED CIT(A) NOTICED THAT AN IDENTICAL ISSUE WAS EXAMINED BY THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 4789/MUM/2009 RELATING TO A.Y. 2005 - 06. ACCORDINGLY, BY FOLLOWING THE SAID DECISION LEAR NED CIT(A) DELETED THE DISALLOWANCE. 5. BEFORE US ALSO, LEARNED AR INVITED OUR ATTENTION TO THE WORKINGS GIVEN BY THE ASSESSEE IN THE TAX AUDIT REPORT AS WELL AS BEFORE THE TAX AUTHORITIES . PERUSAL OF THE SAME SHOWS THAT THE ASSESSEE HAS WORKED OUT THE IMPACT OF THE EXCISE DUTY ON OPENING STOCK, CLOSING STOCK, PURCHASES AND SALES AND HAS SHOWN THAT THE EFFECT WILL BE NIL UNDER BOTH EXCLUSIVE AND INCLUSIVE METHODS. FROM THE ASSESSMENT ORDER, WE NOTICED THAT THE ASSESSING OFFICER HAS WORKED OUT THE IMPACT ONLY ON OPENING STOCK AND CLOSING STOCK AND FAILED TO APPLY THE PROVISIONS OF SECTION 145A OF THE ACT ON PURCHASES AND SALES. AS PER THE PROVISIONS OF SECTION 145 A OF THE ACT , ADJUSTMENTS OF THE DUTIES AND TAXES HAVE TO BE MADE ON VALUING PURCHASES, SALES AND INVENTORIES. WORKING S GIVEN BY THE ASSESSEE SHOWS THAT THE ASSESSEE HAS WORKED OUT THE IMPACT OF DUTY ON R.R. KABEL LTD. 3 PURCHASES, SALES AND INVENTORIES AND IN OUR VIEW THE SAME IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 145A OF THE ACT . ACCORDINGLY IN OUR VIEW , DECISION RENDERED BY LEARNED CIT(A) ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS B EEN PRONOUNCED IN THE COURT ON 4 .7.2016 SD/ - SD/ - (PAWAN SINGH ) (B.R.BASKA RAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 7 / 20 1 6 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. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS