The DCIT, Circle-1(1),, Baroda v. Gandevikar Jewellers Pvt. Ltd.,, Baroda

ITA 1103/AHD/2010 | 2007-2008
Pronouncement Date: 29-04-2014 | Result: Dismissed

Appeal Details

RSA Number 110320514 RSA 2010
Assessee PAN AAACG8448D
Bench Ahmedabad
Appeal Number ITA 1103/AHD/2010
Duration Of Justice 4 year(s) 20 day(s)
Appellant The DCIT, Circle-1(1),, Baroda
Respondent Gandevikar Jewellers Pvt. Ltd.,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-04-2014
Date Of Final Hearing 09-04-2014
Next Hearing Date 09-04-2014
Assessment Year 2007-2008
Appeal Filed On 09-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI A.M.) I.T. A. NO. 727 & 1103/AHD/2010 (ASSESSMENT YEAR: 20 06-07 & 2007-08) THE DCIT CIRCLE1(1) BARODA V/S GANDEVIKAR JEWELLERS PVT. LTD. PRATAP ROAD DANDIA BAZAR BARODA (APPELLANT) (RESPONDENT) PAN: AAACG 8448D APPELLANT BY : SHRI P.L. KUREEL SR. D.R. RESPONDENT BY : SHRI M.K. PATEL ( )/ ORDER DATE OF HEARING : 09-04-201 4 DATE OF PRONOUNCEMENT : 29-04-2014 PER SHRI ANIL CHATURVEDI A.M. 1. THESE TWO APPEALS ARE FILED BY THE REVENUE AGAIN ST THE ORDER OF CIT(A)-I BARODA DATED 09.01.2009 & 07.12.2009 FOR A.YS. 2006 -07 & 2007-08 RESPECTIVELY. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. WE PROCEED WITH THE FACTS FOR A.Y. 06-07 (ITA NO. 7 27/AHD/2010). 3. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN GOLD AND SILVER ORNAMENTS AND ARTICLES. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 06-07 ON 30.12.2006 D ECLARING TOTAL INCOME OF RS. 68 59 234/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 2 ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 29.12.2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 1 08 58 800/-. AGGRIEVED BY THE ORDER OF A.O ASSESSEE CARRIED THE MATTER BEFORE CI T(A). CIT(A) VIDE ORDER DATED 09.11.2009 ALLOWED THE APPEAL OF THE ASSESSEE . AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS NOW APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS. 40 00 000/- MADE ON ACCOUNT OF UND ERVALUATION OF CLOSING STOCK. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEALS) ERRED IN APPRECIATING THE FACT THAT THE BOOKS RESULTS OF THE ASSESSEE WAS REJ ECTED U/S. 145(3) OF THE ACT AND THE PROFIT WAS ESTIMATED WAS DUE TO THE REASON THAT THE ASSESSEE H AD FAILED TO INCLUDE THE MAKING CHARGED IN VALUING THE CLOSING STOCK IN THE JEWELLERY AND IN T HE CASE OF SILVER ORNAMENTS WEIGHTED AVERAGE COST WAS NOT AVAILABLE WITH THE ASSESSEE AND ALSO D UE TO OTHER DEFECTS. 4. BEFORE US IT WAS SUBMITTED THAT THOUGH 2 GROUND S ARE RAISED BUT BOTH ARE INTERCONNECTED. WE THEREFORE PROCEED TO CONSIDER BO TH THE GROUNDS TOGETHER. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O NOTICED THAT ASSESSEE HAD WORKED OUT IT CLOSING STOCK BY ADOPTING AVERAG E COST AS AGAINST WEIGHTED AVERAGE STOCK OR COST ON FIFO BASIS. THE A.O THEREFORE ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE BOOK RESUL TS SHOULD NOT BE REJECTED IN VIEW OF THE PROVISIONS OF SECTION 145(3 ) OF THE ACT AND THE RATE OF WEIGHTED AVERAGE STOCK AS WORKED BY HIM NOT BE AD OPTED. THE SUBMISSION OF ASSESSEE WERE NOT FOUND ACCEPTABLE TO A.O AND HE REJECTED THE VALUE OF CLOSING STOCK OF 22 CT GOLD ORNAMENTS SHOWN BY THE ASSESSEE AT AVERAGE COST. A.O. THEREFORE REJECTED THE BOOKS RE SULTS AS THE A.O WAS OF THE VIEW THAT ASSESSEE HAD VALUED STOCK IN CONTRAVENTIO N OF ACCOUNTING STANDARD 2 PRESCRIBED BY THE INSTITUTE OF CHARTERED ACCOUNTA NT OF INDIA FOR VALUING 22 CT GOLD ORNAMENTS AND WORKED OUT THE UNDER STATEMENT O F CLOSING STOCK AT RS. 32 49 358/-. HE ALSO NOTICED THAT ASSESSEE HAD NOT CONSIDERED THE ELEMENT MAKING CHARGES IN RESPECT OF 10455.23 GMS OF STANDA RD GOLD CONVERTED INTO 22 CT. GOLD ORNAMENTS. ASSESSEE FILED THE REVISED WORKING AFTER CONSIDERATION ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 3 OF MAKING CHARGES AND ACCORDINGLY THE UNDER VALUATI ON WORKED OUT AT RS. 3 31 266/- WAS SURRENDERED BY ASSESSEE. A.O ALSO N OTICED THAT ASSESSEE HAD SHOWN SILVER STOCK BUT THE WEIGHTED AVERAGE STO CK WAS NOT AVAILABLE. HE THEREFORE TO COVER THE OTHER DEFECTS INCLUDING T HE AMOUNT OF RS. 3 31 266/- BEING THE MAKING CHARGES ESTIMATED THE TOTAL VALUE OF UNDER STATED CLOSING STOCK AT RS. 40 LACS AND ADDED THE SAME TO THE INCO ME. AGGRIEVED BY THE ORDER OF A.O ASSESSEE CARRIED THE MATTER BEFORE CI T(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS UNDER:- 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE ID. AR AND THE FACTS OF THE CASE. SECTION 145A DEALS WITH VALUATION OF CLOSING STOCK. FOR EASE OF REFERENCE T HE SECTION IS REPRODUCED BELOW:- 'NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 145 THE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSES OF DETERMIN ING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION 'SHALL BE A) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSE SSEE; AND B)FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TA X DUTY CESS OR FEE (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITIO N AS ON THE DATE OF VALUATION.' 5.1 FROM A PLAIN READING OF THE SECTION IT IS SEEN THAT TWO THINGS MUST BE ENSURED-(A) THAT VALUATION IS IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULAR LY EMPLOYED BY THE ASSESSEE AND (B) THAT SUCH VALUATION HAS BEEN FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF TAX DUTY ETC. PAID OR INCURRED TO BRING THE GOODS TO THE PLACE OF THEIR LOCATION AND CONDIT ION AS ON THE DATE OF VALUATION. SO FAR AS (A) ABOVE IS CONCERNED IT IS SEEN THAT THE ASSESSEE HAS REGULAR LY EMPLOYED THE WEIGHTED AVERAGE COST METHOD FOR VALUATION OF INVENTORY. THIS METHOD HAS ALSO BEEN P RESCRIBED BY THE ICAI IN AS-2. PARA 5 OF THE ACCOUNTING STANDARD STATES THAT 'INVENTORIES SHOULD BE VALUED AT THE LOWER OF COST AND NET REALIZABLE VALUE'. IN PARA 16 IT IS FURTHER MENTIONED THAT THE COST O F INVENTORIES SHOULD BE ASSIGNED BY USING THE FIFO OR WEIGHTED AVERAGE COST FORMULA. IN PARA 17 THE WEIGHED AVERAGE COST FORMULA HAS BEEN FURTHER EXPLAINED AS UNDER: - 'UNDER THE WEIGHTED AVERAGE COST FORMULA THE COST OF EACH ITEM IS DETERMINED FROM THE WEIGHTED AVERAGE OF THE COST OF SIMILAR ITEMS AT THE BEGINNI NG OF A PERIOD AND THE COST OF SIMILAR ITEMS PURCHASED OR PRODUCED DURING THE PERIOD. THE AVERAG E MAY BE CALCULATED ON ACCOUNT OF PERIODIC BASIS OR AS EACH ADDITIONAL SHIPMENT IS RECEIVED DEPENDING UPON THE CIRCUMSTANCES OF THE ENTERPRISE. ' 'UNDER THE WEIGHTED AVERAGE COST FORMULA THE COST OF EACH ITEM IS DETERMINED FROM THE WEIGHTED AVERAGE OF THE COST OF SIMILAR ITEMS AT THE BEGINNI NG OF A PERIOD AND THE COST OF SIMILAR ITEMS PURCHASED OR PRODUCED DURING THE PERIOD. THE AVERAG E MAY BE CALCULATED ON ACCOUNT OF PERIODIC BASIS OR AS EACH ADDITIONAL SHIPMENT IS RECEIVED DEPENDING UPON THE CIRCUMSTANCES OF THE ENTERPRISE. ' ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 4 RATE OF RS. 647.49 PER GRAM APPLIED BY THE ASSESSEE TO THE VALUATION OF ITS CLOSING STOCK OF 22 CT NEW ORNAMENTS WAS CORRECTLY DETERMINED FOLLOWING THE AC COUNTING STANDARD-2. 5.3 IT IS ALSO NOTEWORTHY THAT AFTER ELABORATELY DE ALING WITH THE DEFINITION OF WEIGHTED AVERAGE COST THE AO HAS THEN PROCEEDED TO HIMSELF APPLY THE SIMPLE A VERAGE RATE OF PURCHASE OF ORNAMENTS IN THE LAST MONTH OF THE ACCOUNTING PERIOD. THIS RATE OF RS. 71 9.112 PER GRAM IS ALSO NOT THE WEIGHTED AVERAGE RATE COMPUTED AFTER CONSIDERING ALL PERIODICAL TRAN SACTIONS. HAVING REJECTED THE ASSESSEE'S RATE FOR VALUATION PURPOSES IT IS THEN INCUMBENT UPON THE A O TO WORK OUT THE CORRECT WEIGHTED AVERAGE COST FOR EACH ITEM OF INVENTORY SEPARATELY I.E. 22 CT NEW J EWELLERY 22 CT. OLD JEWELLERY AND 24 CT NEW JEWELL ERY 24 CT OLD JEWELLERY ETC. THIS HAS CLEARLY NOT BEEN DONE. MOREOVER THE BASIS FOR ARRIVING AT THE AD-HO C ADDITION OF RS. 7 50 642/- IN RESPECT OF OTHER STOC K OF ORNAMENTS AND SILVER IS NOT KNOWN. IT IS ALSO WORTH NOTING THAT THE ASSESSEE'S METHOD OF VALUATIO N HAS BEEN CONSISTENTLY FOLLOWED AND ACCEPTED IN THE PAST. IN VIEW OF THE FOREGOING I AM OF THE OPI NION THAT THE AO WAS NOT JUSTIFIED IN DISTURBING TH E METHOD OF VALUATION ADOPTED BY THE ASSESSEE WITHOUT BRINGING ON RECORD SUFFICIENT MATERIAL TO SHOW HOW THE SAID METHOD WAS DEFECTIVE OR INCAPABLE OF P ROVIDING A PROPER COMPUTATION OF INCOME. ACCORDINGLY THE ADDITION TO THE VALUE OF CLOSING S TOCK OFRS. 40 00 0007- IS DIRECTED TO BE DELETED. 6. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US THE LD. D.R. SUPPORTED THE ORDER OF A .O. HE FURTHER SUBMITTED THAT ASSESSEE HAS NOT FOLLOWED THE ACCOUNTING STANDARD 2 (AS2) PRESCRIBED BY INSTITUTE OF CHARTERED ACCOUNTANT FOR THE VALUATION OF INVENTORY AND THEREFORE THE A.O WAS FULLY JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS. HE FURTHER SUBMITTED THAT AS PARA 17 WEIGHTED AVERAGE COST HAS TO BE WORKED OUT THE VALUATION AT THE END OF THE YEAR AND THEREFORE THE VALUATION WORKED OUT BY THE ASSESSEE WAS NOT AS PER AS2 PRESCRIBED BY INSTITUTE OF CHARTERED ACCOUNTANT. THE LD. A.R. ON THE OTHER HAND SUPPORTE D THE ORDER OF CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN CONSIS TENTLY FOLLOWING THE SAME METHOD OF ACCOUNTING IN EARLIER YEARS AND THE METHO D OF ACCOUNTING ADOPTED BY THE ASSESSEE HAS ALSO BEEN ACCEPTED BY THE DEPAR TMENT WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3). HE FURTHER SU BMITTED THAT THE ADDITION IF MADE WILL BE TAX NETURAL AS THE ADDITIONS MADE T O THE CLOSING STOCK WILL HAVE TO BE CONSIDERED AS OPENING STOCK IN SUBSEQUENT YEA RS. HE FURTHER SUBMITTED THAT ON IDENTICAL FACTS THE HONBLE TRIBUNAL IN TH E CASE OF CHIMANLAL SONI HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HE AL SO PLACED ON RECORD THE ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 5 COPY OF THE AFORESAID ORDER IN ITA 1663/AHD/2009 OR DER DATED 31.05.2012. HE THEREFORE SUBMITTED THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAS VALUED ON 'WEI GHTED AVERAGE COST' FOLLOWED IN THE CURRENT YEAR. IT IS ASSESSEE'S SUBM ISSION THAT THE METHOD OF VALUATION OF STOCK FOLLOWED IN THE YEAR UNDER APPEA L WAS ALSO FOLLOWED BY THE ASSESSEE IN EARLIER YEARS AND THE SAME WAS ACCEPTED BY THE DEPARTMENT WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) OF TH E ACT. CIT(A) WHILE DELETING THE ADDITION HAS ALSO GIVEN A FINDING THAT THE ASSESSEE'S METHOD OF VALUATION WAS CONSISTENTLY FOLLOWED IN THE PAST AND HAS ALSO BEEN ACCEPTED BY THE DEPARTMENT. CIT(A) HAS ALSO GIVEN THE FINDIN G OF FACT THAT THE 'WEIGHTED AVERAGE COST' WORKED OUT BY THE ASSESSEE HAS BEEN ARRIVED AFTER TAKING INTO ACCOUNT EACH AND EVERY ITEM OF SALES AN D PURCHASE MADE DURING THE YEAR. FURTHER THE AMOUNT OF SALES TAX/ VAT EMBE DDED IN THE VALUE OF PURCHASE AND SALE HAS ALSO BEEN REFLECTED IN THE 'W EIGHTED AVERAGE COST' AND THUS THE ASSESSEE HAS CORRECTLY DETERMINED THE VALUATION OF ITS CLOSING STOCK FOLLOWING THE AS-2 PRESCRIBED BY THE INSTITUT E OF CHARTERED ACCOUNTANT OF INDIA. HE HAS FURTHER NOTED THAT A.O WHILE MAKI NG THE ADDITION HAS NOT SPELT OUT THE BASIS FOR ARRIVING AT ADHOC ADDITION IN RESPECT OF OTHER STOCK OF ORNAMENTS AND SILVER WHICH HE OUGHT TO HAVE DONE. WE FURTHER FIND THAT IN THE CASE OF DCIT VS. CHIMANLAL H. SONI ITA NO. 1663/AHD /2009 ORDER DATED 31.05.2012 ON SIMILAR FACTS THE ISSUE WAS DECIDED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 8. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORDS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS VALUED THE STOCK AT -WEIGHTED AVER AGE COST IN THE CURRENT YEAR AND THE SAME METHOD WAS FOLLOWED BY ASSESSEE IN EARLIER YEARS AND IT W AS ACCEPTED BY THE DEPARTMENT WHILE FINALIZING THE ASSESSMENT U/S. 143(3). THE ASSESSEE HAS ALSO ADOPT ED THE SAME METHOD FOR ARRIVING AT THE 'COST OF GOODS SOLD'. THE METHOD OF VALUATION IS ALSO IN CON SONANCE WITH THE IT. ACT AND THE ACCOUNTING STANDARDS PRESCRIBED BY ICAI. IT IS ALSO AN UNDISPU TED FACT THAT THE SIMILAR VALUATION METHOD OF STOCK HAS BEEN ACCEPTED BY THE DEPARTMENT IN CASE O F C . H. JEWELLERS (P ) LTD. ITS SISTER CONCERN. THE LD. CIT (A) HAS GIVEN A FINDING THAT WEIGHTED AVERAGE C OST ADOPTED BY THE ASSESSEE FOR WORKING OUT THE VALUATION OF STOCK IS AFTER TAKING INTO EACH AND EV ERY ITEM OF SALES AND PURCHASE DURING THE YEAR. THE AMOUNT OF SALES TAX AND VAT EMBEDDED IN THE VALUE O F PURCHASE AND SALE HAS ALSO BEEN REFLECTED IN THE WEIGHTED AVERAGE COST. HE HAS ACCORDINGLY HELD THAT THE RATE OF RS. 658. 64 PER GM. APPLIED BY ASSESSEE TO VALUE ITS STOCK OF 22 CT. NEW ORNAMENTS WAS CORRECTLY DETERMINED. THE LD. CIT (A) HAS FURTHER GIVEN A FINDING THAT THE RATE OF RS. 764/- GM IS ALSO NOT WEIGHTED AVERAGE RATE COMPUTED AFTER ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 6 CONSIDERING ALL PERIODICAL TRANSACTIONS. HE FURTHER GAVE A FINDING THAT THE BASIS OF AD-HOC ADDITION OFRS.10 LAC IS NOT KNOWN. THE FINDING OF CIT (A) HAS NOT BEEN CONTROVE RTED BY THE DEPARTMENT. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY REVENUE BEFO RE US TO CONTROVERT THE AFORESAID FACTS. IN THE CASE OF ACIT VS. SHANTILAL NAGARDAS & CO. (SUPRA) T HE CO-ORDINATE BENCH HAS HELD WHEN REVENUE DEPARTMENT ACCEPTED A METHOD OF VALUATION OF CLOSIN G STOCK IN EARLIER YEARS ON THE SAME SET OF FACTS AND CIRCUMSTANCES OF THE CASE OF THE BUSINESS OF AS SESSEE THEN THE PRINCIPLE OF CONSISTENCY SHOULD B E FOLLOWED BY DEPARTMENT WHILE MAKING THE ASSESSMENT THOUGH THE PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. NEVERTHELESS WHAT EVER THE SETTLED LAW IS APPLICABLE IN RESPECT OF VALUATION OF CLOSING STOCK BUT THE PECULARITY OF TH IS CASE IS THAT THE A.O. HAS STARTED TO VALUE THE S TOCK AT CLOSE INTERVALS OF EACH MONTH BUT FINALLY THA T WAS NOT MADE THE BASIS OF ADDITION. THE A.O . HAS LEFT THAT OBSERVATION/CALCULATION WITHOUT DRA WING A CONCLUSION HOWEVER FINALIZED THE VALUATION O N AN ADD-HOC BASIS. BECAUSE OF THIS PECULIAR SITUATIO N WE ARE NOT INCLINED TO APPROVE THE SAID APPROACH OF ASSESSMENT OF THE A. O. IN VIEW OF THE FOREGOING FACTS AND IN THE CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT CIT (A) HAS RIGHTLY DELETE D THE ADDITION OF RS.2 60 63 437/- MADE TO CLOSING STOCK. WE ACCORDINGLY UPHELD THE ACTION OF CIT (A) AND DISMISS THIS GROUND OF REVENUE. 9. BEFORE US THE REVENUE COULD NOT CONTROVERT THE FIN DINGS OF CIT(A) NOR HAS BROUGHT ANY MATERIAL ON RECORD IN ITS SUPPORT. WE H OWEVER FIND THAT CIT(A) HAD DELETED THE ENTIRE ADDITION OF RS. 40 LACS MADE BY THE A.O WHICH ALSO INCLUDED THE UNDER VALUATION ON ACCOUNT OF NON INCL USION OF MAKING CHARGES OF RS. 3 31 266/- WHICH WAS SURRENDERED AND ACCEPTED B Y THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF TH E AFORESAID FACTS WE ARE OF THE VIEW THAT IN THE PRESENT CASE THE ADDITION CAN BE SUSTAINED ONLY WITH RESPECT TO THE UNDER VALUATION FOR MAKING CHARGES A MOUNTING TO RS. 3 31 266/- WHICH WAS ACCEPTED BY ASSESSEE OUT OF TH E TOTAL ADDITION OF RS. 40 LACS WHICH WAS DELETED BY CIT(A). WE THUS DIRECT AC CORDINGLY. THUS THIS GROUND OF REVENUE IS PARTLY ALLOWED. 10. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ITA NO. 1103/AHD/2010 FOR A.Y. 2007-08 11. BEFORE US BOTH THE PARTIES SUBMITTED THAT THE F ACTS OF THE CASE IN ASSESSMENT YEAR 07-08 ARE IDENTICAL TO THAT OF A.Y. 06-07 IN I TA NO. 727/AHD/2010 EXCEPT THAT IN A.Y. 06-07 THERE WAS AN AGREED ADDI TION ON ACCOUNT OF UNDER VALUATION ON ACCOUNT OF LABOUR CHARGES AMOUNTING TO RS. 3 31 266/-. OTHER THAN THAT THERE ARE NO CHANGES IN THE FACTS OF THE CASE. IT WAS THEREFORE ITA NOS727 & 1103 /AHD/2010 . A.Y. 2006-07 & 2007- 08 7 SUBMITTED THAT THE SUBMISSIONS MADE BY THEM WHILE A RGUING THE CASE FOR A.Y. 06-07 WOULD BE EQUALLY APPLICABLE TO THE YEAR UNDER APPEAL. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT BOTH THE PARTIES HAVE ADMITTED BEFORE US THAT ONLY DIFFERENCE IN THE YEAR UNDER APPEAL IS WITH RESPECT TO AGREED ADDITIO N ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK ON ACCOUNT OF LABOUR CHA RGES. WE THEREFORE FOR THE REASONS STATED HEREINABOVE WHILE DECIDING THE APPEA L FOR A.Y 06-07 ALSO FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 13. IN THE RESULT THE APPEAL FOR A.Y. 06-07 IN ITA NO. 727/AHD/2010 IS PARTLY ALLOWED AND APPEAL FOR A.Y. 07-08 IN ITA NO. 1103/A HD/2010 IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29 - 04 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD