PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOL-2 V. JEWELL INDIA JEWELLERS

ITAT/207/2017

AI Insights

The case revolves around an appeal by the Principal Commissioner of Income Tax, Central, Kolkata-2 against Jewel India Jewellers concerning the method of valuing closing stock of gold for the assessment year 2009-10. The revenue challenged the method employed by the assessee, which was L.I.F.O, arguing it was not justifiable. However, both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal had previously accepted this method, noting its consistent application over several years and its acceptance in earlier scrutiny assessments under Section 143(3) of the Income Tax Act. The High Court, upon reviewing the facts and the consistent application of the L.I.F.O method by the assessee, dismissed the appeal, stating that no substantial question of law arose from the case.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 733627 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 18-11-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BHASKAR SENGUPTA
• Assessee Lawyers: SMARAJIT CHOWDHURY; ARUNAVA GANGULY
• Keywords: Condonation of delay; Income Tax; Valuation of closing stock; L.I.F.O method
• Section: 143(3); 260A

Judgement Text

"OD-10&11 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITAT/207/2017 IA NO: GA/2/2017(Old No.GA/1806/2017) PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOLKATA-2 VERSUS JEWEL INDIA JEWELLERS ITAT/207/2017 IA NO: GA/1/2017(Old No.GA/1805/2017) PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOLKATA-2 VERSUS JEWEL INDIA JEWELLERS BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 18th November, 2021 Appearance:- Mr. Smarajit Roy Chowdhury, Adv. Mr. Arunava Ganguly, Adv. … For Appellant Mr. Bhaskar Sengupta, Adv. … For Respondent GA/1/2017 The Court : We have heard Mr. Smarajit Roy Chowdhury, learned Standing Counsel appearing for the appellant/revenue and Mr. Bhaskar Sengupta, learned Counsel appearing for the respondent/assessee. We are satisfied with the reasons assigned in the affidavit filed in support of the application for condonation of delay 2 in filing the appeal. Accordingly, the delay in filing the appeal is condoned. The application being GA/1/2017 is allowed. ITAT/207/2017 This appeal of revenue filed under Section 260A of the Income Tax Act (the `Act’ in brevity) is directed against the order dated 1st June, 2016 passed by the Income Tax Appellate Tribunal, “B” Bench, Kolkata (the `Tribunal’) in ITA No. 2085/Kol/2013 for the assessment year 2009-10. The revenue has framed the following substantial questions of law for consideration :- “Whether on the facts and in the circumstances of the case the Hon’ble Income Tax Appellate Tribunal, “B” Bench, Kolkata was right in law to hold that there were no justifiable reasons to reject the method employed by the assessee for valuation of the closing stock of gold ?” We have heard Mr. Roy Chowdhury, learned Standing Counsel appearing for the appellant/revenue and Mr. Sengupta, learned Counsel appearing for the respondent/assessee. The only question involved was whether the Tribunal was justified in affirming the view taken by the Commissioner of Income Tax (Appeal) [in brevity, CIT(A)] in the method of valuation of the closing stock of gold as adopted by the assessee. We find from the order passed by the CIT(A) as well as the Tribunal that the factual position has been analysed in depth and it has been pointed out that the assessee has been consistently following L.I.F.O method for 3 valuation of the closing stock of gold and the same has been accepted by the revenue in the earlier years even in a scrutiny assessment proceedings under Section 143(3) of the Act. That apart, the Tribunal on consideration of the facts found that the Assessing Officer has not recorded any clear finding in his order that the L.I.F.O method of accounting followed by the assessee for valuing its closing stock did not reflect the correct profit. In fact, the working made by the assessee was never questioned by the Assessing Officer but faulted the assessee only for the method adopted by them. The undisputed fact being that the said method has been followed by the assessee consistently for several assessment years which have been accepted by the revenue and if such is the undisputed position, the Assessing Officer cannot find fault in the method adopted by the assessee for the relevant Assessment year. Thus, we find that the matter is entirely factual and there is no question of law, much less substantial questions of law, arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed. With the dismissal of the appeal, all connected applications are accordingly dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) SN/S.Das AR(CR) "