M/s. Vira Exports, Surat v. The ACIT., Circle-6,, Surat

MA 74/AHD/2010 | 2003-2004
Pronouncement Date: 09-02-2012 | Result: Dismissed

Appeal Details

RSA Number 7420524 RSA 2010
Assessee PAN AACFV1092P
Bench Ahmedabad
Appeal Number MA 74/AHD/2010
Duration Of Justice 1 year(s) 10 month(s) 7 day(s)
Appellant M/s. Vira Exports, Surat
Respondent The ACIT., Circle-6,, Surat
Appeal Type Miscellaneous Application
Pronouncement Date 09-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 09-02-2012
Assessment Year 2003-2004
Appeal Filed On 01-04-2010
Judgment Text
-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI D K TYAGI JUDICIAL MEMBER AND SHRI A K GARODIA ACCOUNTANT MEMBER M A NO.74/AHD/2010 [ARISING OUT OF ITA NO.1107/AHD/2007] (ASSESSMENT YEAR:-2003-04) M/S VEERA EXPORTS 301 KOHINOOR CHAMBERS JADA KHADI MAHIDHARPURA SURAT V/S THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-6 SURAT PAN: AACFV 1092 P [APPLICANT] [ORIGINAL APPELLANT] [RESPONDENT] [ORIGINAL RESPONDENT] ASSESSEE BY :- SHRI J P SHAH AR REVENUE BY:- SHRI SAMIR TEKRIWAL SR. DR DATE OF HEARING:- 03-02-2012 DATE OF PRONOUNCEMENT:- O R D E R PER D K TYAGI (JM) :- BY THIS MISCELLANEOUS APPLICATION THE ASSESSEE HAS REQUESTED FOR RECALLING OF THE ORDER D ATED 30-04- 2008 PASSED BY THE ITAT AHMEDABAD BENCH-A IN ITA.NO.1107/AHD/2007 FOR THE AY 2003-04. 2. IN THE MISCELLANEOUS APPLICATION THE ASSESSEE H AS SUBMITTED AS UNDER: 1 'C BENCH OF THE TRIBUNAL CONSTITUTED BY HON'BLE SHRI N.S. SAINI AND HON'BLE SHRI MAHAVIR SINGH DISPOSED OF THE ABOV E APPEAL FILED BY THE ASSESSEE BY THEIR ORDER COPY OF WHICH IS ENCLO SED HEREWITH FOR READY REFERENCE. 2 2 IN THE SAID APPEAL THE POINT TO BE DECIDED WAS - IS THE METHOD ADOPTED FOR VALUATION OF CLOSING STOCK BY THE ASSES SEE AND ACCEPTED BY THE DEPARTMENT FOR LAST SEVERAL YEARS TO BE ACCEPTE D OR THE METHOD OF VALUATION ADOPTED BY THE ASSESSING OFFICER? THE TRI BUNAL DECIDED THAT THE METHOD OF VALUATION ADOPTED BY THE ASSESSING OF FICER IS CORRECT AND UPHELD THE ADDITION OF RS.66 90 772/- BY THE RE VISED UPWARD VALUATION OF THE CLOSING STOCK BY THAT METHOD. IT I S THE HUMBLE SUBMISSION OF THE ASSESSEE THAT WITH RESPECT IT IS AN APPARENT ERROR ON THE PART OF THE TRIBUNAL NOT TO HOLD THAT THE OPENI NG STOCK OF THE SAME YEAR I.E. ASST. YEAR 2003-04 MUST ALSO BE REVALUED BY THE SAME METHOD AS IS ADOPTED FOR THE VALUATION OF THE CLOSI NG STOCK OF THAT YEAR. IN THE SUBMISSION OF THE ASSESSEE THIS IS NOT A DE BATABLE ISSUE AND THE POINT WAS DECIDED BY THE PRIVY COUNCIL IN ITS CELEB RATED DECISION OF THE COMMISSIONER OF INCOME-TAX BOMBAY VS. THE AH MEDABAD NEW COTTON MILLS CO. LTD. - 4 ITC 245 DATED 4 TH NOVEMBER 1929. THE RELEVANT PORTION OF THE JUDGMENT IS AS FOLLOWS: 'IF THE METHOD OF ALTERING BOTH VALUATIONS IS NOT A DOPTED IT IS PERFECTLY PLAIN THAT THE PROFIT WHICH IS BROUGHT FO RWARD IS NOT THE REAL ONE.'(UNDERLINED BY THE ASSESSEE TO PROVIDE EM PHASIS) AFTER THIS PRICY COUNCIL DECISION THE POINT WAS SO WELL ESTABLISHED THAT AS NOTED BY THE SUPREME COURT IN THEIR JUDGMEN T OF C.I.T. VS. BRITISH PAINTS INDIA LTD. - (1991) 188 ITR 44 AT PA GE 48; 'THE OFFICER HELD THAT THERE WAS NO JUSTIFICATION T O RECOGNIZE A PRACTICE AS CLAIMED BY THE ASSESSEE OF VALUING IT S STOCK OTHERWISE THAN IN ACCORDANCE WITH THE WELL-RECOGNIZ ED PRINCIPLE OF ACCOUNTING WHICH REQUIRED THE STOCK TO BE VALUED AT EITHER COST (RAW MATERIAL PLUS EXPENDITURE) OR MARKET PRIC E WHICHEVER WAS THE LOWER. RECALCULATING THE VALUE OF THE OPENI NG AND CLOSING STOCKS BY ADDING OVERHEAD EXPENDITURE THE OFFICER MADE AN ADDITION OF RS.1 04 417 .. .....' (UNDERLIN ED BY THE ASSESSEE TO PROVIDE EMPHASIS) THE POINT TO EMPHASIZE IS THAT IN THE MATTER OF BRI TISH PAINTS AS NOTED BY SUPREME COURT IN THEIR JUDGMENT AS ABOVE AT THE ASSESSMENT STAGE THE ASSESSING OFFICER WHEN HE REJECTED THE METHOD OF VALUATION OF CLOSING STOCK TO THE DISADVANTAGE OF THE ASSESSEE HE DID GIVE BENEFIT TO THE ASSESSEE BY APPLYING THE SAME METHOD OF VALUATI ON TO THE OPENING 3 STOCK AS WELL. IN THE SAME JUDGMENT THE SUPREME COU RT STATES ON PAGE 56 PUTTING ITS IMPRIMATUR ON WHAT THE ASSESSING OFF ICER DID; 'IT IS THEREFORE NOT ONLY THE RIGHT BUT THE DUTY OF THE ASSESSING OFFICER TO ACT IN EXERCISE OF HIS STATUTORY POWER AS HE HAS DONE IN THE INSTANT CASE FOR DETERMINING WHAT IN HIS O PINION IS THE CORRECT TAXABLE INCOME.' (UNDERLINED BY THE ASSESSE E TO PROVIDE EMPHASIS) THE ABOVE PRINCIPLE HAS BEEN ALSO FOLLOWED BY THE A HMEDABAD BENCHES OF THE TRIBUNAL AND VARIOUS HIGH COURTS BUT BECAUSE OF THE ABOVE TWO DECISIONS IT IS NOT NECESSARY TO MULTIPL Y THE CITATIONS IN THIS MISCELLANEOUS APPLICATION BUT THE QUOTATION FROM TH E LEADING AHMEDABAD TRIBUNAL DECISION IN A.C.I.T. VS. SHREE K RISHNA SALT INDUSTRIES - (1998) 60 TTJ 125 AT 146 IN PARA 12.1 DESERVES TO BE STATED; TO ARRIVE AT A CORRECT PROFIT IN THE YEAR SAME ME THOD OF VALUATION SHOULD BE FOLLOWED BOTH FOR OPENING STOCK AND CLOSING STOCK.' THE DELHI HIGH COURT RECENTLY FOLLOWED THE ABOVE PR INCIPLE LAID DOWN BY THE PRIVY COUNCIL REGARDING THE REVALUATION OF T HE OPENING STOCK ON THE SAME BASIS AS APPLIED IN VALUATION OF OF CLOSIN G STOCK IN C.I.T. VS. MAHAVIR ALLUMINIUM LTD. - (2008) 297 ITR 77 FIRST PARAGRAPH OF THE HEAD NOTE STATES:- 'WHENEVER THERE IS A CHANGE IN THE VALUATION AT ONE END THEN THERE MUST NECESSARILY BE A CORRESPONDING CHANGE AT THE OTHER END OTHERWISE THE TRUE PROFIT WOULD N OT BE REFLECTED.' (UNDERLINED BY THE ASSESSEE TO PROVIDE EMPHASIS). AT PAGE 82 THE DELHI COURT STATES; 'IF THERE IS A CHANGE IN THE CLOSING STOCK AS ON MA RCH 31 1 999 THERE MUST NECESSARILY BE A CORRESPONDING ADJUSTMEN T MADE IN THE OPENING STOCK AS ON APRIL 1 1998.' (UNDERLINED BY THE ASSESSEE TO PROVIDE EMPHASIS) THE DEPARTMENT'S SLP WAS DISMISSED ON 20.10.2008 BY THE SUPREME COURT BENCH CONSISTING OF JUSTICE S.H. KAPADIA AND JUSTICE B. 4 SUDERSHAN REDDY AS REPORTED ON PAGE 4 OF THE STATUT E PORTION OF 307 ITR. 3 IN THE PREMISES THE ASSESSEE PRAYS THAT THE HON' BLE TRIBUNAL BE KINDLY PLEASED TO DO COMPLETE JUSTICE IN THE MATTER TO THE ASSESSEE BY HOLDING THAT THE OPENING STOCK ALSO MUST BE VALUED ON IDENTICAL BASIS AS THE CLOSING STOCK AND DIRECTING THE ASSESSING OF FICER TO COMPUTE THE NET ADDITION AFTER REVALUING THE OPENING STOCK ON I DENTICAL BASIS AS CLOSING STOCK OF ASST. YEAR 2003-04. 4 NEEDLESS TO SAY FOR THIS ACT OF KINDNESS AND JUST ICE THE APPELLANT AS IN DUTY BOUND SHALL FOREVER PRAY AND SHALL BE I MMENSELY GRATEFUL. 3 AT THE TIME OF HEARING THE LEARNED COUNSEL OF TH E ASSESSEE PLACING RELIANCE ON THE CONTENTS OF THE MISCELLANEO US APPLICATION WANTS US TO MODIFY THE ORDER BY HOLDIN G THAT THE OPENING STOCK ALSO MUST BE VALUED ON IDENTICAL BASI S AS THE CLOSING STOCK AND DIRECTING THE AO TO COMPUTE THE N ET ADDITION AFTER VALUING OPENING STOCK ON IDENTICAL BASIS AS C LOSING STOCK OF ASSESSMENT YEAR 2003-04. 4 THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT AT THE TIME OF HEARING OF THE APPEAL NO SUCH CONTENTION W AS RAISED AND THEREFORE THE SAME CANNOT BE RAISED NOW. THERE IS NO MISTAKE APPARENT FROM RECORD AS HAS BEEN POINTED OUT BY THE LEARNED AR. 5 AFTER HEARING BOTH THE PARTIES AND PERUSING THE R ECORDS WE FIND THAT THE TIME OF HEARING OF THE APPEAL NO SUCH CONTENTION THAT THE OPENING STOCK ALSO MUST BE VALUED ON IDENTICAL BASIS AS THE CLOSING STOCK AND DIRECTING THE AO TO COMPUTE THE N ET ADDITION AFTER VALUING OPENING STOCK ON IDENTICAL BASIS AS C LOSING STOCK OF ASSESSMENT YEAR 2003-04 WAS RAISED BEFORE THE TRIB UNAL. MERELY 5 THAT THE TRIBUNAL HAS TAKEN A VIEW ON THE BASIS OF APPRECIATION OF FACTS CAN NOT TANTAMOUNT TO BE A MISTAKE APPARENT ON RECORD. THE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS ORDE R. WE THEREFORE DO NOT FIND ANY MERIT IN THE MISCELLANEO US APPLICATION MOVED BY THE ASSESSEE. 6 IN THE RESULT THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 09-02-2012 SD/- SD/- (A K GARODIA) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 09-02-2012 COPY OF THE ORDER FORWARDED TO: 1. M/S VEERA EXPORTS 301 KOHINOOR CHAMBERS JADA KHADI MAHIDHARPURA SURAT 2. THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-6 SURAT 3. CIT CONCERNED 4. CIT(A)-IV SURAT 5. DR ITAT AHMEDABAD BENCH-C AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD