DCIT, Hyderabad v. M/s Sree Rayalaseema Sugar&Energy Pvt Ltd, Hyderabad

ITA 76/HYD/2010 | 2006-2007
Pronouncement Date: 09-04-2010 | Result: Dismissed

Appeal Details

RSA Number 7622514 RSA 2010
Assessee PAN AAICS7470B
Bench Hyderabad
Appeal Number ITA 76/HYD/2010
Duration Of Justice 2 month(s) 21 day(s)
Appellant DCIT, Hyderabad
Respondent M/s Sree Rayalaseema Sugar&Energy Pvt Ltd, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 09-04-2010
Date Of Final Hearing 31-03-2010
Next Hearing Date 31-03-2010
Assessment Year 2006-2007
Appeal Filed On 18-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.76/HYD/2010 A.Y. : 2006-07 THE DCIT CIRCLE 3 (2) HYDERABAD VS M/S SREE RAYALA SEEMA SUGAR & ENERGY (P) LTD. (PAN AAICS 7470 B) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.N. CHARYA D.R. RESPONDENT BY: SHRI K. VASANT KUMAR O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A) IV HYDERABAD DATED 19.10 .2009 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: THE CIT(A) ERRED IN NOT APPRECIATING THE LEGISLATIV E INTENTION IN INSERTING THE PROVISIONS OF SECTION 145A. THE CIT( A) SHOULD HAVE SUSTAINED THE ADDITION ON ACCOUNT OF EXCISE DUTY ON CLOSING STOCK AS THE PROVISION CREATED TOWARDS EXCISE DUTY PAYABLE ON CL OSING STOCK OF FINISHED GOODS IS ONLY A CONTINGENT LIABILITY AND N OT AN ASCERTAINED LIABILITY AS ON 31 ST MARCH OF THE ACCOUNTING YEAR. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. SIMILAR ISSUE WAS CONSIDERED BY THIS TRIBUNAL V IDE ITS ORDER DATED 14/8/2009 IN THE CASE OF SURYALATHA SHIPPING MI LLS LTD. VS. DY. CIT IN ITA NO.624/HYD/2009 FOR THE ASSESSMENT YEAR 200 4-05 WHEREIN IT WAS HELD AS FOLLOWS: 2 2 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION ON E ITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. NO DOUBT IN THE CASE OF SRI KRISHNA PHARM ACEUTICALS LTD. THIS TRIBUNAL FOLLOWING THE DECISI ON OF THE MUMBAI BENCH OF THIS TRIBUNAL FOUND THAT THE EXCISE DUTY PAYABLE WILL FORM PART OF THE CLOSING STOCK. THIS TRIBUNAL DID NOT HAVE THE BENEFIT OF GOING THROUGH THE JUDGEMENT OF THE MADHYA PRADESH HIGH COURT WHILE DE CIDING THE CASE OF SHRI KRISHNA PHARMACEUTICALS LTD. THE MADHYA PRADESH HI GH COURT IN THE CASE OF D&H SECHERON ELECTRODES (P) LTD. (SUPRA) FOUND THAT EXCISE DUTY PAYABLE COULD BE ADDED TO THE CLOSING STOCK IN THE CASE THE GOODS LEFT THE PREMISES. IN FACT THE MP HIGH COURT OBSERVED AS FOLLOWS AT P ARA 5 OF ITS JUDGEMENT: A BARE LOOK AT THE PROVISION MANIFESTS THAT IT IS ONLY WHEN THE TAX DUTY CESS OR FEE IS ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION THAT THE SAID AMOUNT FORMS PART OF THE VALUE. IT IS NOT DIS PUTED IN THE PRESENT CASE THAT THE EXCISE DUTY HAD NOT BEEN PAID BY THE ASSESSEE ON THE GOODS IN S TOCK AS THE GOODS DID NOT LEAVE THE PREMISES. IN VIEW OF THE ABOVE OBSERVATION OF THE MP HIGH COU RT THE EXCISE DUTY IS PAYABLE ON THE GOODS WHICH LEFT THE PREMISES SHALL BE ADDED TO THE CLOSING STOCK. IN CASE THE GOODS DID NOT LEAVE THE PREMISE S THE EXCISE DUTY PAYABLE CANNOT BE ADDED TO THE CLOSING STOCK. IN THIS CASE ADMITTEDLY THE GOODS DID NOT LEAVE THE PREMISES. THEREFORE THE EXCISE DUTY PAYABLE CANNOT BE ADDED TO THE CLOSING STOCK IN VIEW OF THE JUDGEMENT OF MP HIGH COURT. SIMILAR VIEW WAS ALSO TAKEN BY THIS TRIBUNAL IN THE CASE OF SURY AJYOTHI SPINNING MILLS LTD. (SUPRA) WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. 8. RESPECTFULLY FOLLOWING THE ABOVE RATIO LAID DOW N BY THIS TRIBUNAL IN ITS ORDER CITED SUPRA WE DISMISS THE APP EAL OF THE REVENUE. 9. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT : 9. 4.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 9 TH APRIL 2010. 3 3 COPY FORWARDED TO: 1. M/S SREE RAYALASEEMA SUGAR & ENERGY (P) LTD. 1-10 -19 ST. NO.3 ASHOK NAGAR HYDERABAD. 2. DY. CIT CIRCLE 3(2) ROOM NO.723 IT TOWERS HYDER ABAD 3. CIT(A)-VI HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP