ACIT CIR 6(1), MUMBAI V. BDK PROCESS CONTROL P. LTD, MUMBAI

ITA 7795/MUM/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0944 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.7795/MUM/2011 ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE-6(1), ROOM NO.506, 5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S BDK PROCESS CONTROL PVT. LTD. SHIVSAGAR ESTATE, BLOCK, DR.A.B. ROAD, WORLI, MUMBAI-400018 ( / REVENUE) ( '#$% & /ASSESSEE) P.A. NO. AAACB5081B / REVENUE BY SHRI VIJAY KUMAR BORA-DR '#$% & / ASSESSEE BY NONE ' '( ) & * / DATE OF HEARING 08/04/2015 ) & * / DATE OF ORDER: 08/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 26/08/2011 OF THE LD. FIRST APPELLATE AUTHORI TY, M/S BDK PROCESS CONTROL PVT. LTD . . 2 MUMBAI, IN DIRECTING THE ASSESSING OFFICER TO ALLOW ADJUSTMENT OF DEFERENCE OF CENVAT ELEMENT IN THE OP ENING STOCK IN CURRENT YEAR AND IN THE CLOSING STOCK FOR THE CURRENT YEAR WITHOUT APPRECIATING THAT THE ASSESSEE DISPUTED THE ADJUSTMENT OF CENVAT ELEMENT U/S 145A OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) IN T HE CLOSING STOCK OF THE LAST YEAR I.E. ASSESSMENT YEAR 2006- 07, WHICH IS THE OPENING STOCK OF THE CURRENT YEAR I.E. 2007-08, CONSEQUENTLY, NOT CONSISTENTLY FOLLOWING O NE METHOD AND TAKING ADVANTAGE OF ADJUSTMENT OF CENVAT ELEMENT RESULTING IN REDUCING PROFIT IN ONE YEAR ON LY. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI VIJAY KUMAR BORA, DEFENDED THE CONCLUSION ARRIVED A T IN THE ASSESSMENT ORDER AND ADVANCED HIS ARGUMENTS IDENTICAL TO THE GROUND RAISED. HOWEVER, NOBODY WA S PRESENT FOR THE ASSESSEE IN SPITE OF THE FACT THAT ON 24/03/2014, THE APPEAL WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE. IT SEEMS THE ASSESSEE IS NOT INTERES TED TO PURSUE THE APPEAL, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PARTY QUA THE ASSESSEE AND TEND TO DISPO SE OFF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD. 2.1. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD . THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE COMPANY ENGA GED IN THE BUSINESS OF MANUFACTURE AND SALE OF INDUSTRIAL VALVES, TRADING AND HOTEL BUSINESS. THE ASSESSEE DECLARED I NCOME OF RS.1,90,26,297/-. THE ASSESSEE FILED DETAILS AS REQUIRED M/S BDK PROCESS CONTROL PVT. LTD . . 3 BY THE ASSESSING OFFICER. THE ASSESSMENT WAS COMPL ETED BY THE LD. ASSESSING OFFICER ACCEPTING THE RETURNED INCOME WITHOUT MAKING ANY ADJUSTMENT U/S 145A AS DONE FOR THE COMPLETION OF ASSESSMENT PROCEEDING FOR AY 2006-07. HOWEVER, THE DEPARTMENT WHILE CONCLUDING ASSESSMENT PROCEEDINGS FOR AY 2006-07 INCREASED THE VALUE OF C LOSING STOCK BY RS.32,33,383/- ON ACCOUNT OF CENVAT ELEMEN T U/S 145A OF THE ACT. THE STAND OF THE ASSESSEE IS THAT THE ASSESSING OFFICER DID NOT PROPERLY CONSIDERED THE ADJUSTMENT MADE U/S 145A. ON APPEAL, BEFORE THE LD . COMMISSIONER OF INCOME TAX (APPEALS), THE FACTUAL M ATRIX WAS CONSIDERED AND FOUND THAT THE CENVAT ELEMENT IN THE OPENING STOCK IN THE CURRENT YEAR (CLOSING STOCK OF PRECEDING YEAR) IS RS.32,33,383/- AND THE CENVAT EL EMENT IN THE CLOSING STOCK FOR THE CURRENT YEAR IS RS.9,2 7,274/-, CONSEQUENTLY, THE INCOME WAS REDUCED BY AN AMOUNT O F RS.23,06,109/-, THUS, THE APPEAL OF THE ASSESSEE WA S ALLOWED AGAINST WHICH THE REVENUE IS IN APPEAL BEFO RE THIS TRIBUNAL. WE NOTE THAT FOR AY 2006-07, VIDE ORDER D ATED 27/04/2011, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDED THE APPEAL OF THE ASSESSEE UPHOLD ING THE ADJUSTMENT MADE U/S 145A. SINCE, THE ASSESSING OFF ICER MADE THE ADJUSTMENT OF CENVAT ELEMENT U/S 145A FOR AY 2006-07, THE SAME APPROACH SHOULD HAVE BEEN ADOPTED BY THE ASSESSING OFFICER FOR MAKING THE ADJUSTMENT U/S 145A BEING THE FACTS ARE IDENTICAL. SECTION 145A DEALS W ITH METHOD OF ACCOUNTING IN CERTAIN CASES. AS PER SUB- CLAUSE (I) TO CLAUSE (A) TO SECTION 145A OF THE ACT AND F OR THE M/S BDK PROCESS CONTROL PVT. LTD . . 4 PURPOSES OF DETERMINING INCOME CHARGEABLE UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION S HALL BE IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULAR LY EMPLOYED BY THE ASSESSEE. THEREFORE, WE FIND NO I NFIRMITY IN THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. IT I S UPHELD, THEREFORE, APPEAL OF THE REVENUE IS HAVING NO MERIT, CONSEQUENTLY, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR, AT THE CONCLUSION OF HEARING ON 08/04/2015. SD/- SD/- ( D.KARUNAKARA RAO ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' ( MUMBAI; +' DATED : 08/04/2015 F{X~{T? P.S/. '. . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 ' 3& ( ,- ) / THE CIT, MUMBAI. P4. 2 2 ' 3& / CIT(A)- , MUMBAI 5. 56 0&'# , 2 ,-* ,# , ' ( / DR, ITAT, MUMBAI 6. $ 7( / GUARD FILE. / BY ORDER, 15-& 0& //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI