ACIT, CHENNAI V. M/s. Best & Crompton Engg. Limited, CHENNAI

ITA 803/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64148 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR S MOHARANA IRS
• Keywords: Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 803/MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME -TAX, COMPANY CIRCLE I(3), CHENNAI. VS. M/S. BEST & CROMPTON ENGG. LIMITED, 28/C, INDUSTRIAL ESTATE (NORTH), AMBATTUR, CHENNAI 600 098. PAN AAACB2753N (APPELLANT) (RESPONDENT) APPELLANT BY : DR. S. MOHARANA, IR S, CIT DEPARTMENT BY : NONE DATE OF HEARING : 09 TH AUGUST, 2012 DATE OF PRONOUNCEMENT : 09 TH AUGUST, 2012 O R D E R PER DR. O.K. NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTE D AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II I, AT CHENNAI DATED 12.01.2012 AND ARISES OUT OF THE ASSE SSMENT COMPLETED UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1 961. - - ITA 803/12 2 2. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOBOD Y WAS PRESENT FOR THE RESPONDENT-ASSESSEE, EVEN THOUGH N OTICE WAS SERVED THROUGH THE DEPARTMENT. THEREFORE, WE HEARD DR. S. MOHARANA, THE LEARNED COMMISSIONER OF INCOME-TAX AP PEARING FOR THE REVENUE AND PROCEED TO DISPOSE OF THE APPEA L EX PARTE QUA, THE ASSESSEE. 3. THE FIRST ISSUE RAISED BY THE REVENUE IS THAT TH E COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION MADE BY THE ASSESSING OFFICER AGAINST THE PROVISION FOR WRITE OFF OF OBSOLETE STOCK CLAIMED BY THE ASSESSEE AT ` 86,88,663/-. THE COMMISSIONER OF INCOME-TAX(APPEAL S) HAS EXAMINED THE ISSUE IN DETAIL. IN FACT, THE CASE IS THAT THE ASSESSEE HAS VALUED THIS OBSOLETE STOCK AT A LESSER VALUE. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RIGHTLY HEL D THAT THE STOCK HAS TO BE VALUED AT COST OR MARKET PRICE WHIC HEVER IS LOWER. THE ASSESSEE HAS ADOPTED THE LOWER MARKET P RICE. IN THIS CIRCUMSTANCE, WE DO NOT FIND ANY REASON TO TRE AT THIS ISSUE AS DIFFERENT FROM VALUATION OF STOCK-IN-TRADE. WHE N THE ISSUE IS RIGHTLY CONSIDERED AS A VALUATION OF STOCK-IN-TRADE , WE FIND THAT THERE IS NO REASON TO MAKE ANY SUCH DISALLOWANCE OR ADDITION. - - ITA 803/12 3 THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS ) ON THIS POINT IS UPHELD. 4. THE SECOND ISSUE RAISED BY THE REVENUE IS THAT T HE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DI RECTING THE ASSESSING OFFICER TO ADOPT THE VALUE OF THE LAND AT AMBATTUR INDUSTRIAL ESTATE AT ` 50/- PER SQ. FT. 5. THE ASSESSEE HAD CLAIMED A FAIR MARKET VALUE OF ` 108/- PER SQ. FT. AS ON 1.4.1981, WHILE CALCULATING THE L ONG TERM CAPITAL GAINS ON SALE OF LAND AT AMBATTUR INDUSTRIAL ESTATE . THE FAIR MARKET VALUE CLAIMED BY THE ASSESSEE WAS SUPPORTED BY THE REPORTS OF TWO INDEPENDENT VALUERS. BUT THE ASSESS ING OFFICER ADOPTED THE VALUE AT ` 5/- PER SQ. FT. ON THE BASIS OF THE MARKET VALUE COLLECTED FROM THE OFFICE OF ADDITIONAL SUB-R EGISTRAR AT AMBATTUR. ACCORDING TO THE ASSESSING OFFICER, THE FAIR MARKET VALUE OF ` 5/- PER SQ. FT. WAS BASED ON THE GUIDELINE VALUE PREVAILED AT THAT POINT OF TIME. ON THIS GROUND, T HE ASSESSING AUTHORITY MADE AN ADDITION OF ` 7,09,15,440/-. IN FIRST APPEAL, THE COMMISSIONER OF INCOME-TAX(APPEALS) DIRECTED TH E ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE AT ` 50/- PER SQ. FT. AS AGAINST ` 5/- ADOPTED BY THE ASSESSING AUTHORITY. - - ITA 803/12 4 6. THIS ISSUE HAS BEEN CONSIDERED BY THE COMMISSION ER OF INCOME-TAX(APPEALS) IN A VERY DETAILED MANNER. IT IS ALSO TO BE SEEN THAT THE VALUE ADOPTED BY THE ASSESSEE COMPANY IS SUPPORTED BY THE REPORTS FURNISHED BY TWO INDEPENDE NT VALUERS. MOREOVER, THE VALUE ADOPTED BY THE ASSESSING OFFICE R IS TOO LOW, WHEN COMPARED TO THE GUIDELINE VALUE OF THE LAND AT ` 536/- PER SQ. FT. AS ON 1.4.2007. IT IS AFTER CONSIDERING AL L THESE ASPECTS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS AD OPTED THE FAIR MARKET VALUE AT ` 50/- PER SQ. FT. WE FIND THAT THE VALUE ADOPTED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) IS REASONABLE. NO INTERFERENCE IS CALLED FOR. 7. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 9 TH OF AUGUST, 2012 AT CHENNAI. SD/- SD/- (V.DURGA RAO) ( DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 9 TH AUGUST, 2012. MPO* COPY TO: APPELLANT/RESPONDENT/CIT/CIT (A)/DR/GF