The ITO, Ward-2,, Navsari v. M/s. J.P. Jewellers, Bilimora

ITA 1677/AHD/2010 | 2006-2007
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 167720514 RSA 2010
Assessee PAN AADFJ7797E
Bench Ahmedabad
Appeal Number ITA 1677/AHD/2010
Duration Of Justice 8 month(s) 9 day(s)
Appellant The ITO, Ward-2,, Navsari
Respondent M/s. J.P. Jewellers, Bilimora
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-01-2011
Date Of Final Hearing 21-01-2011
Next Hearing Date 21-01-2011
Assessment Year 2006-2007
Appeal Filed On 19-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI BHAVNESH SAINI JUDICIAL MEMBER AND A.N. PAHUJA ACCOUNTANT MEMBER) ITA NO.1677/AHD/2010 [ASSTT. YEAR : 2006-2007] DICTATED ON: 21-01-2011 ITO WARD-2 NAVSARI. VS. M/S.J.P. JEWLLERS RAMIBA COMPLEX GAUHARBAUG COLLEGE ROAD BILIMORA. PAN : AADFJ 7797 E (APPELLANT) (RESPONDENT) REVENUE BY : MR.ANURAG SHARMA ASSESSEE BY : SHRI MITESH MODI O R D E R PER BHAVNESH SAINI JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS) VALSAD DATED 17.12.2009 FOR THE ASSESSMENT YEAR 2006-2007 CHALLE NGING THE DELETION OF ADDITION OF RS.7 64 845/- ON ACCOUNT OF UNDER VALUATION OF CLOS ING STOCK. 2. THE AO ADDED RS.80/- TO RS.100/- PER GRAM BEING THE LABOUR CHARGES ON THE MAKING OF THE ORNAMENTS WHILE VALUING THE CLOSI NG STOCK OF 9560.570 GRAMS THAT COMES TO RS.7 64 845/- ON THE REASONS TH AT LABOUR CHARGES ARE NOT INCLUDED IN VALUING THE CLOSING STOCK. THE LEARNED CIT(A) NOTED THAT THE ASSESSEE HAS CLARIFIED THAT SAME METHOD OF VALUATIO N OF CLOSING STOCK WAS ADOPTED BY THE ASSESSEE FROM THE FIRST YEAR OF THE BUSINESS WHEN THE BUSINESS STARTED. THE ASSESSEE PLEADED THAT IT HAS ALWAYS C ONSISTENTLY VALUED THE CLOSING STOCK AT AVERAGE PURCHASE PRICE OF THE YEAR. THERE WAS NO CHANGE IN THE VALUATION METHOD IN THE CURRENT YEAR. THE ASSESSEE ALSO ADDED FROM RS.80/- TO RS.100/- AS LABOUR CHARGES WHILE VALUING THE CLOSIN G STOCK. THE LEARNED CIT(A) AGREED WITH THE SUBMISSIONS OF THE ASSESSEE AND NOTED THAT THE AO WAS NOT CORRECT IN MAKING THE ADDITION AND HE HAS NOT A DOPTED THE VALUATION WHICH WAS FOLLOWED BY THE ASSESSEE FOR ALL THE PRECEDING ASSESSMENT YEARS. THE LEARNED CIT(A) ALSO NOTED THAT THE ASSESSEE FOLLOWE D THE SAME METHOD OF VALUATION IN THE ASSESSMENT YEAR UNDER APPEAL. THE RE IS WIDE FLUCTUATION IN ITA NO.1677/AHD/2010 -2- PRICES OF GOLD AND METHOD OF AVERAGE PURCHASE PRICE OF THE YEAR JUSTIFIED THE VALUATION. THE ASSESSEE ALSO SUBMITTED A LETTER EX PLAINING THAT THE LABOUR CHARGES OF RS.80/- TO 100/- WERE ADDED WHOLE VALUIN G THE CLOSING STOCK. THE LEARNED CIT(A) ACCORDINGLY DELETED THE ADDITION. 3. THE LEARNED DR MERELY RELIED UPON THE ORDER OF T HE AO. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH ERE IS NO CHANGE IN METHOD OF VALUATION OF CLOSING STOCK AND THE AO MADE THE ADDI TION MERELY ON PRESUMPTION. HE REFERRED TO PB-5 WHICH IS THE WRIT TEN SUBMISSION FILED BEFORE THE LEARNED CIT(A) TO EXPLAIN THE VALUATION OF THE CLOSING STOCK WHICH WAS VERIFIED AND ACCEPTED BY THE LEARNED CIT(A). 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. THE AO MERELY ON THE BASIS OF THE LABOUR CHARGES MADE THE ABOVE ADDITION WHICH WAS EXPLAINED BEFORE THE L EARNED CIT(A) IN WRITING THAT SUCH LABOUR CHARGES HAVE ALREADY BEEN ADDED WH ILE VALUING THE CLOSING STOCK. THE ASSESSEE MAINTAINED THE SAME METHOD OF ACCOUNTING IN ALL THE PRECEDING ASSESSMENT YEARS AND FOLLOWED THE SAME ME THOD OF ACCOUNTING IN THE ASSESSMENT YEAR UNDER APPEAL FOR VALUING THE CLOSIN G STOCK. THEREFORE THERE IS NO REASON FOR THE AO TO MAKE THE ADDITION. THE LEA RNED DR MERELY RELIED UPON THE ORDER OF THE AO AND HAVE NOT POINTED OUT ERROR IN THE ORDER OF THE LEARNED CIT(A) AND IN APPRECIATING THE MATERIAL PLACED ON R ECORD. IN THE ABSENCE OF ANY MATERIAL ADVERSE TO THE FINDINGS OF THE LEARNED CIT(A) AND THE MATERIAL ON RECORD WE DO NOT FIND ANY JUSTIFICATION TO INTERFE RE WITH THE ORDER OF THE CIT(A). WE CONFIRM HIS FINDING AND DISMISS THE APP EAL OF THE REVENUE. 5. IN RESULT THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH JANUARY 2011 SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER ITA NO.1677/AHD/2010 -3- PLACE : AHMEDABAD DATE : 28-01-2011 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD