ACIT, Moradabad v. M/s. Hindustan Mint & Agro Production Pvt. Ltd., Chandausi

ITA 3394/DEL/2010 | 2007-2008
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 339420114 RSA 2010
Assessee PAN AAAGH7447K
Bench Delhi
Appeal Number ITA 3394/DEL/2010
Duration Of Justice 1 year(s) 13 day(s)
Appellant ACIT, Moradabad
Respondent M/s. Hindustan Mint & Agro Production Pvt. Ltd., Chandausi
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-07-2011
Date Of Final Hearing 30-06-2011
Next Hearing Date 30-06-2011
Assessment Year 2007-2008
Appeal Filed On 09-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER & SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 3394/DEL/2010 ASSESSMENT YEARS: 2007-08 ACIT VS. HINDUSTAN MINT & AGRO PRODUCTION LTD. RANGE-II CHANDAUSI. MORADABAD. AAAGH7447K (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PRATIMA KAUSHIK SR. DR RESPONDENT BY : SH. PIYUSH KAUSHIK ADV. ORDER PER I.P. BANSAL J.M. : THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST THE ORDER PASSED BY LD. CIT(A) DATED 23.03. 2010 FOR A.Y. 2007-08. GROUNDS OF APPEAL READ AS UNDER: - 1. THE CIT(A) BAREILLY HAS ERRED IN LAW AND CIRCUMSTANCES IN DELETING THE ADDITION OF RS. 11 98 000/- WHICH WAS RIGHTLY MADE BY THE ASSESSING OFFICER AFT ER INVOKING THE PROVISIONS OF SECTION 145A OF THE I.T. ACT 1961. 2. WHILE ALLOWING RELIEF TO THE ASSESSEE THE CIT(A ) BAREILLY HAS NOT APPRECIATED THE FACT THAT DURING T HE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE ITSELF HAS ACCEPTED THAT THE VALUE OF INVENTORIES A RE EXCLUSIVE OF ELEMENT OF EXCISE DUTY PAID BY IT. ITA NO. 3394/D/2010 2 3. THE ORDER PASSED BY CIT(A) MAY BE SET-ASIDE BY RESTORING THE ORDER PASSED BY THE AO. 4. ANY OTHER GROUND WHICH MAY BE TAKEN DURING THE C OURSE OF THE APPELLANT PROCEEDINGS. 2. THE ASSESSEE IS A MANUFACTURER OF MENTHA PRODUCT S. IT HAS SHOWN THE VALUE OF CLOSING STOCK OF RAW MATERIA L AND FINISHED GOODS AT RS. 8 07 15 439/-. IT WAS FOUND BY THE AO THAT ELEMENT OF EXCISE DUTY FOR VALUATION OF INVENT ORY WAS NOT INCLUDED. THEREFORE THE AO ASKED THE ASSESSEE AS TO WHY THE PROVISIONS OF SEC. 145A OF THE ACT HAVE NOT BEE N COMPLIED WITH. IN RESPONSE IT WAS SUBMITTED THAT AS PER AC COUNTING POLICIES ASSESSEE DOES NOT INCLUDE EXCISE DUTY INTO PURCHASE. THE ASSESSEE IS DEBITING EXCISE DUTY PAID ON PURCHA SES IN A SEPARATE EXCISE DUTY ACCOUNT AND AT THE TIME OF SAL E/EXPORT DUTY AVAILED HAS BEEN CREDITED FROM THE STOCK AND G OODS SOLD IN LOCAL MARKET DUTY IN THAT RESPECT DEBITED TO AC COUNT AND BALANCE DUTY REPRESENT DUTY ON CLOSING STOCK. IT W AS FURTHER SUBMITTED THAT AS DUTY HAS NOT BEEN ACCOUNTED FOR I N THE PROFIT AND LOSS ACCOUNT THEREFORE DUTY IS NOT REFLECTED IN BOTH SIDES OF PROFIT AND LOSS ACCOUNT. HOWEVER THIS POSITION WILL NOT MAKE ANY DIFFERENCE EVEN OF RS. 1/-. REVISED PROFI T AND LOSS ACCOUNT WAS SUBMITTED TO SHOW THAT IN THE PROFIT AN D LOSS ITA NO. 3394/D/2010 3 ACCOUNT ATTACHED WITH THE AUDITED ACCOUNTS AND REVI SED ACCOUNT NET PROFIT REMAINED SAME. HOWEVER THE AO DID NOT ACCEPT SUCH SUBMISSION OF THE ASSESSEE AND HE ADDED A SUM OF RS. 11 98 000/- ON ACCOUNT OF NON-INCLUSION OF E XCISE DUTY IN THE CLOSING STOCK BY APPLYING THE PROVISIONS OF SEC. 145A OF THE INCOME TAX ACT (ACT). 3. THE SUBMISSIONS MADE BEFORE AO WERE REITERATED BEFORE LD. CIT(A). AFTER CONSIDERING THE SUBMISSI ON OF THE ASSESSEE AND RELYING ON CERTAIN DECISIONS LD. CIT(A ) HAS DELETED THE ADDITION. THE DEPARTMENT IS AGGRIEVED HENCE IN APPEAL. 4. AFTER NARRATING THE FACTS AND RELYING UPON THE G ROUNDS OF APPEAL IT WAS THE CASE OF LD. DR THAT ADDITION HAS WRONGLY BEEN DELETED BY LD. CIT(A) AND ADDITION WAS RIGHTLY MADE BY THE AO. HE SUBMITTED THAT ADDITION WAS CALLED FOR U/S 145A AS HAS BEEN DONE BY THE AO. THEREFORE HE PLEADED THA T THE ORDER OF AO SHOULD BE RESTORED AND THAT OF CIT(A) S HOULD BE SET ASIDE. ITA NO. 3394/D/2010 4 5. ON THE OTHER HAND RELYING UPON THE SUBMISSION M ADE BEFORE AO AND CIT(A) AND THE FINDINGS RECORDED BY L D. CIT(A) IT WAS THE SUBMISSION OF LD. AR THAT RELIEF HAS RIG HTLY BEEN GIVEN BY LD. CIT(A). HE SUBMITTED THAT THE AO COUL D NOT SHOW THAT HOW THE INCLUSION OF EXCISE DUTY IN THE CLOSIN G STOCK VALUE COULD MAKE ANY DIFFERENCE IN THE NET PROFIT ARRIVED AT BY THE ASSESSEE IN THE AUDITED ACCOUNTS. HE SUBMITTED THA T CALCULATIONS WERE SUBMITTED BEFORE THE AO AND IF TH OSE CALCULATIONS ARE CONSIDERED THEN IT WILL BE CLEARED THAT THERE IS NO IMPACT ON THE NET PROFIT SHOWN BY THE ASSESSEE. HENCE HE PLEADED THAT ADDITION HAS RIGHTLY BEEN DELETED BY L D. CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE HAVE ALSO CAREFULLY GONE THROUGH THE CONTENTS OF TH E ASSESSMENT ORDER THE ORDER OF CIT(A) AND THE PROFI T AND LOSS ACCOUNT SUBMITTED BY THE ASSESSEE IN THE AUDITED BA LANCE SHEET AND ALSO THE REVISED CALCULATION SUBMITTED BY THE ASSESSEE WHICH HAS BEEN REPRODUCED ON PAGE 2 OF THE ASSESSMENT ORDER. FOR THE SAKE OF CONVENIENCE THE AUDITED PROFIT AND LOSS ACCOUNT AND THE REVISED CALCULATION S SUBMITTED BY THE ASSESSEE ARE REPRODUCED AS UNDER: - ITA NO. 3394/D/2010 5 A) AUDITED ACCOUNTS M/S HINDUSTAN MINT & AGRO PRODUCTS PVT. LTD. PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31.3.07 PARTICULARS SCHEDULE NO. AMOUNT AMOUNT 31.03.2007 31.03.2006 ___________________________________________________ _______ INCOME SALES 1 389 825 494.00 232 156 374.25 OTHER INCOME 2 3 142 865.14 2 262 239.09 392 968 359.14 234 418 613.34 EXPENDITURE MATERIAL CONSUMED 3 350 522 143.50 206 472 437. 56 MANUFACTURING & DIRECT EXPS. 4 21 925 792.39 13 806 065.81 OFFICE & ADMI. EXPS 5 6 951 189.43 5 589 8 66.20 DEPRECIATION 6 1 411 421.87 1 121 337.53 INTEREST 5 944 897.89 3 418 699.78 386 755 45.08 230 408 406.88 PROFIT BEFORE TAX 6 212 914.06 4 010 206.46 PROVISION FOR TAX 2 100 000.00 1 050 000.00 NET PROFIT (LOSS) 4 112 914.06 2 960 206.46 GENERAL RESSERVE - NET PROFIT T/F TO B/S 4 112 914.06 2 960 206.46 SCHEDULE 3 OF AUDITED ACCOUNTS PURCHASE U.P. PURCHASE 239 293 691.260 - LESS: PURCHASE RETURN 288 000.000 239 005 691.26 EX. U.P. PURCHASE 126 802 454.39 PURCHASE NON TAXABLE U/T - PURCHASE TAXABLE U/T - PURCHASE & DEV. TAX 299 198.00 366 107 343.65 OPENING STOCK 65 130 238.75 ADD: PURCHASE 366 107 343.65 ITA NO. 3394/D/2010 6 431 237 582.40 LESS: CLOSING STOCK 80 715 438.90 TOTAL OF SCHEDULE 3 350 522 143.50 206 472 437.56 B) REVISED CALCULATION AS SUBMITTED TO AO : PARTICULARS AMOUNT (IN LACS) PARTICULARS AMOUNT (IN LACS) TO OPENING STOCK 651.30 BY SALES 3 898.25 TO EXCISE DUTY ON O/S 14.98 BY EXCISE DUTY ON SALES 220.03 TO CESS ON O. STOCK 0.30 BY CESS ON SALES 4.70 TO PURCHASE A/C 3 661.07 BY OTHER INCOME 31.43 TO EXCISE DUTY ON PURCHASES 216.77 BY CLOSING STOCK 807.15 TO CESS ON PURCHASE 4.66 BY EXCISE DUTY ON CLOSING STOCK 11.72 TO MFG. DIRECT EXP. 219.26 BY CESS ON C.S. 0.26 TO OFFICE & ADMN. EXP. 69.51 TO DEPRECIATION 14.11 TO INTEREST 59.45 TO NET PROFIT 62.13 REVISED PROFIT AND LOSS ACCOUNT AFTER INCLUSION OF EXCISE DUTY. 7. THE ABOVE CALCULATIONS WILL SHOW THAT THE NET PR OFIT SHOWN IN BOTH THE CALCULATIONS ARE SAME. THE REVEN UE HAS NOT BEEN ABLE TO SHOW ANY IMPACT ON REVENUE OF NON- INCLUSION OF EXCISE DUTY IN THE VALUE OF CLOSING STOCK. WHEN THE SAME IS COMPUTED BY INCLUSION OF EXCISE DUTY. IN THIS VIEW OF THE SITUATION WE ARE OF THE OPINION THAT ADDITION HAS RIGHTLY BEEN DELETED BY LD. CIT(A) AND WE DECLINE TO INTERFERE I N THE DELETION. ITA NO. 3394/D/2010 7 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.7.11 SD/- SD/- (K.G. BANSAL) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22.7.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR