The DCIT(OSD) Range-1,, Ahmedabad v. Cornerstone Brands Ltd., Ahmedabad

ITA 2332/AHD/2007 | 2002-2003
Pronouncement Date: 27-04-2010 | Result: Dismissed

Appeal Details

RSA Number 233220514 RSA 2007
Assessee PAN AAACC6117F
Bench Ahmedabad
Appeal Number ITA 2332/AHD/2007
Duration Of Justice 2 year(s) 10 month(s) 25 day(s)
Appellant The DCIT(OSD) Range-1,, Ahmedabad
Respondent Cornerstone Brands Ltd., Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 27-04-2010
Date Of Final Hearing 27-04-2010
Next Hearing Date 27-04-2010
Assessment Year 2002-2003
Appeal Filed On 01-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING: 27.04.2010 DRAFTED ON: 27.04. 2010 ITA NO.2332/AHD/2007 WITH CROSS OBJECTION NO.235/AHD/2007 ASSESSMENT YEAR : 2003-2004 DY. CIT (OSD) RANGE-1 AHMEDABAD 3 RD FLOOR JITENDRA CHAMBERS NR. NEW RBI LANE ASHRAM ROAD AHMEDABAD-380 014 VS. CORNERSTONE BRANDS PVT. LTD. 303 SWAGAT BUILDING C.G. ROAD AHMEDABAD. ITA NO.2905/AHD/2007 ASSESSMENT YEAR : 2001-2002 ASST. CIT (OSD) RANGE-1 AHMEDABAD 3 RD FLOOR JITENDRA CHAMBERS NR. NEW RBI LANE ASHRAM ROAD AHMEDABAD-380 014 VS. CORNERSTONE BRANDS PVT. LTD. 303 SWAGAT BUILDING C.G. ROAD AHMEDABAD. PAN/GIR NO. : AAACC 6117 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI C.K.MISHRA D.R. RESPONDENT BY: SHRI VIJAY RANJAN A.R. O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THESE ARE THE TWO APPEALS FILED BY THE REVENUE AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V AHME DABAD FOR ASSESSMENT YEAR 2003-2004 AND 2001-2002 AND CROSS OBJECTION F ILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2003-2004. - 2 - 2. THE GROUND OF THE APPEAL TAKEN BY THE REVENUE A ND TAKEN BY THE ASSESSEE IN CROSS OBJECTION ARE AS FOLLOWS :- ASSESSMENT YEAR 2003-2004 GROUNDS OF APPEAL TAKEN B Y THE REVENUE:- 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTI NG TO DELETE THE ADDITION MADE ON ACCOUNT OF BUSINESS LOSS OF RS.36 84 912/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. ASSESSMENT YEAR 2001-2002 GROUNDS OF APPEAL TAKEN B Y REVENUE:- 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN HOLD ING THE REOPENING OF ASSESSMENT AS INVALID. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELET ING THE DISALLOWANCE OF BAD DEBT OF RS.20 81 373/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. ASSESSMENT YEAR 2003-2004 GROUNDS OF CROSS OBJECTI ON TAKEN BY THE ASSESSEE:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LD. A.O. HAS GROSSLY ERRED IN CONFIRMING AN ADDITION OF RS.3 24 000/- MADE ON ACCOUNT OF THE VALUATION OF ITS STOCK. HE OUGHT TO HAVE APPRECIATED INTER ALIA : (A) THAT THE VALUATION MADE BY THE APPELLANT WAS IN CON FORMITY WITH THE METHOD OF VALUATION WHICH THE APPELLANT HAD BEE N CONSISTENTLY FOLLOWING SINCE LONG; (B) THAT THE VALUATION OF ITS CLOSING STOCKS HAD BEEN A PPROVED OF BY THE STATUTORY AUDITORS OF THE COMPANY; (C) THAT THERE WAS ABSOLUTELY NO CAUSE FOR HIM TO DOUBT THE BONA FIDES OF THE APPELLANT IN THE MATTER OF VALUATION OF ITS CLOSING STOCK WHEN IT WAS THE ADMITTED POSITION THAT THE APPELLAN T DID NOT ATTRACT ANY TAX LIABILITY EVEN AFTER CONSIDERING TH E IMPUGNED ADDITION AND FURTHER IT BEING AN INDELIBLE FACT TH AT THE APPELLANTS ACCOUNTS FOR THE PREVIOUS YEAR ENDED 30-6-2002 WERE FINALIZED AND ITS RETURN FOR THE PRESENT ASSESSMENT YEAR FILE D ON THEIR BASIS LONG AFTER ITS AMALGAMATION WITH ANOTHER COMPANY WI TH EFFECT FROM 1-7-2002 HAD ALREADY BECOME EFFECTIVE THERE W AS ABSOLUTELY NO QUESTION FOR THE APPELLANT OR THE COM PANY WITH WHICH THE APPELLANT HAD BEEN AMALGAMATED TO CLAIM ANY CARRY FORWARD OR SET OFF FOR THE LOSS FOR THE PRESENT ASS ESSMENT YEAR. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED IN ORDE RING FOR THE INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C). - 3 - 3. AT THE OUTSET THE LEARNED AUTHORISED REPRESENT ATIVE OF THE ASSESSEE SUBMITTED THAT THE APPEALS FILED BY THE REVENUE FOR BOTH THE YEARS UNDER CONSIDERATION ARE NOT MAINTAINABLE AS THE TAX EFFEC T IN THE SAID APPEALS ARE LESS THAN RS.2 00 000/-. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE POINTED OUT THAT THE TOTAL ASSESSED INCOME IN BOTH THE YEARS WAS LOSS OF RS.4 79 334/- IN ASSESSMENT Y EAR 2003-2004 AND LOSS OF RS.59 60 417/- IN ASSESSMENT YEAR 2001-2002. THE L EARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE MADE A STATEMENT AT THE BAR THAT ON ALLOWING THE APPEALS OF THE REVENUE ALSO THERE WILL BE ASSESSED LOSS IN BOTH THE YEARS. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE A LSO SUBMITTED THAT THE ASSESSEE COMPANY HAD MERGED WITH GODHULI DISTRIBUTORS PVT. L TD. WITH EFFECT FROM 1.07.2002 AND IN THE CIRCUMSTANCES NO BENEFIT OF T HE LOSS WAS AVAILABLE TO THE ASSESSEE COMPANY OR THE COMPANY WITH WHICH IT WAS M ERGED. HE THEREFORE SUBMITTED THAT THERE WILL BE NO TAX EFFECT EVEN WHE N THE ASSESSED LOSS IS REDUCED BY THE TRIBUNAL ON ACCEPTING THE APPEALS OF THE REV ENUE EITHER IN THE YEARS UNDER CONSIDERATION OR IN ANY SUBSEQUENT YEAR EITHER IN T HE HANDS OF THE ASSESSEE COMPANY OR IN THE HANDS OF M/S. GODHULI DISTRIBUTOR S PVT. LTD. WITH WHICH THE ASSESSEE COMPANY WAS MERGED. THE LEARNED DEPARTMEN TAL REPRESENTATIVE COULD NOT POINT OUT ANY ERROR IN THE ABOVE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THE ABO VE FACT IN OUR CONSIDERED OPINION THE APPEALS FILED BY THE REVENUE ARE NOT M AINTAINABLE FOR BOTH THE YEARS UNDER CONSIDERATION AS THE TAX EFFECT INVOLVED IN B OTH THE YEARS IS LESS THAN RS.2 00 000/-. OUR ABOVE VIEW FINDS SUPPORT FROM TH E DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF JCIT VS. PEERL ESS DEVELOPERS LTD. (2006) 103 ITD 349 (KOL) (SB) WE THEREFORE DISMISS THE APPEA LS OF THE REVENUE FOR BOTH THE YEARS IN LIMINE. - 4 - 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE HAS NOT PRESSED THE CROSS OBJECTION FILED FOR THE ASSESSMEN T YEAR 2003-2004 THEREFORE THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. 6. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ALL ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 27 TH DAY OF APRIL 2010. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 27 TH DAY OF APRIL 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V A HMEDABAD. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 27.04.2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 27.04.2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 27.04.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 28.04.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 28.04.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK 28.04.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------