ITO, Bellary V. Shri. Ramesh, Bellary

MA 101/BANG/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 5331 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-02-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 03-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER M.A.NO.101(BANG)/2010 (IN ITA NO.606(BANG)/2009) (ASSESSMENT YEAR: 2004-05) INCOME-TAX OFFICER, WARD-1, BELLARY. APPLICANT VS. SHRI K.RAMESH, L/R OF LATE K.SATYANARAYANA, PROP. M/S.GURUNATH RICE MILL, BOMMANAHAL ROAD, BELLARY. RESPONDENT APPLICANT BY: SHRI G.V.GOPALA RAO. RESPONDENT BY : SHRI BALRAM R RAO. O R D E R PER SMT. P. MADHAVI DEVI, JM : THIS APPLICATION IS FILED BY THE REVENUE U/S 254(2 ) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT'] STATING THAT THE TRIBUNAL, VIDE ITS ORDER DATED 18- 8-2010 HAS PRONOUNCED A DECISION IN FAVOUR OF THE ASSESSEE BY DIRECTING THAT THE OPENING STOCK OF THE CURRENT YEAR I.E. ASS ESSMENT YEAR 2004-05 HAS TO BE CONSIDERED AS HAVING BEEN PURCHAS ED DURING THE RELEVANT ASSESSMENT YEAR AND THE VALUE HAS TO B E ACCORDINGLY SET OFF. THE REVENUE HAS STATED THAT T HE ISSUE IN MA NO. 101(BANG)/2010 PAGE 2 OF 3 THIS CASE WAS NOT AGAINST ALLOWING OF SET OFF AGAIN ST ADDITIONS MADE TO THE CLOSING STOCK IN THE EARLIER ASSESSMENT YEAR 2003- 04 BUT THE ISSUE WAS THAT THE SET OFF OF CLOSING ST OCK ADDED IN THE PREVIOUS ASSESSMENT YEAR 2003-04 HAS BEEN ALLOW ED DURING THE ASSESSMENT YEAR 2004-05 TWICE I.E. ONCE IN QUAN TIFICATION OF SHORTAGE OF BAGS CONSIDERING THE ADDITIONS MADE OF 14050 BAGS IN EARLIER YEAR AND AGAIN BY ALLOWING DEDUCTION OF RS.1,43,450/- ADDED EARLIER YEAR UNDER THE COMPUTATION OF INCOME SEPARATELY. IT WAS SUBMITTED THAT IN CASE THE CLOSING STOCK ADD ED DURING THE YEAR IS NOT ALLOWED AND SET OFF IN QUANTIFICATION O F CLOSING STOCK, THE SHORTAGE OF BAGS WORKS OUT TO 16662 WHEREAS THE AO HAS CONSIDERED THE SHORTAGE OF BAGS ONLY OF 2612 AFTER ALLOWING SET OFF QUANTITY OF BAGS OF 14050 ADDED DURING THE ASSE SSMENT YEAR 2003-04. HENCE, THE SET OFF AMOUNT O RS.1,43,450/- ALLOWED ONCE AGAIN IN THE COMPUTATION OF INCOME IS NOT CORR ECT. IT WAS PRAYED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE T HAT THE ITAT OUGHT TO HAVE CONSIDERED THIS COMPUTATIONAL ER ROR AND DISMISSED THE ASSESSEES APPEAL. THE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER SUPPO RTED THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE TR IBUNAL HAS CONSIDERED THE ISSUE BEFORE SETTING ASIDE THE ORDER OF THE CIT U/S 263 OF THE ACT AND HENCE THERE WAS NO MISTAKE A PPARENT FROM RECORD. 2. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RELEVANT MATERIAL, WE FIND THAT THE ISSUE BEFOR E US IN THE APPEAL WAS THE ORDER OF THE CIT U/S 263 OF THE ACT WHEREIN HE MA NO. 101(BANG)/2010 PAGE 3 OF 3 WAS OF THE OPINION THAT THE AO HAS ERRONEOUSLY ALLO WED THE DEDUCTION FROM THE OPENING STOCK OF THE RELEVANT AS SESSMENT YEAR, THE ADDITION MADE ON ACCOUNT OF CLOSING STOCK OF THE EARLIER ASSESSMENT YEAR. WE HAVE CONSIDERED THE IS SUE AT LENGTH AND THE REVENUE IS IN FACT SEEKING REVIEW OF OUR ORDER WHICH IS NOT PERMISSIBLE U/S 254(2) OF THE ACT. 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE