Income Tax Appellate Tribunal - Mumbai
Gopaldas Visram, Mumbai vs Department Of Income Tax on 1 December, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "G", MUMBAI
Before Shri P.M. Jagtap, Accountant Member and
Shri V. Durga Rao, Judicial Member
I.T.A. No. 6028/Mum/2010
Assessment Year : 2006-07.
Dy. Commissioner of Income-tax, M/s Gopaldas Visram,
Circle-4(2), Mumbai. Vs. 18, Shyamaldas Gandhi Marg,
Mumbai - 400 002.
PAN AACCG 4503F.
Appellant. Respondent
Appellant by : Shri A.K. Nayak.
Respondent by: Shri Rajiv Khandelwala.
Date of hearing : 01-12-2011.
Date of pronouncement : 16-12-2011.
O R D E R.
Per P.M. Jagtap, A.M. :
This appeal is preferred by the Revenue against the order of learned CIT(Appeals)-8, Mumbai dated 10-05-2010 and the solitary issue arising out of the same relates to the addition that is liable to be made to the value of closing stock on account of excise duty.
2. The assessee in the present case is a company which is engaged in the business of trading and exporting pharmaceutical products. The return of income for the year under consideration was filed by it on 30-01-2006 declaring total income of Rs.1,05,56,333/-. During the course of assessment proceedings, it was noticed by the AO that excise duty relating to closing stock amounting to 2 ITA No.6028/Mum/2010 Assessment Year:2006-07 Rs.15,88,832/- was not included by the assessee in the value of closing stock. In this regard, the submission of the assessee that it was following exclusive method was not found acceptable by the AO in view of the provisions of section 145A and relying on the said provisions, he added the excise duty amount of Rs.15,88,832/- to the value of closing stock. On appeal, the learned CIT(Appeals) upheld the action of the AO in including the amount of excise duty in the value of closing stock but directed him to make such adjustment even in respect of opening stock. For this conclusion, the learned CIT(Appeals) relied inter alia, on the decision of Hon'ble Bombay High Court in the case of CIT vs. Mahalaxmi Glass Works Pvt. Ltd. rendered on 1st April, 2009. Aggrieved by the order of the learned CIT(Appeals), the Revenue has preferred this appeal before the Tribunal.
3. We have heard the arguments of both the sides and also perused the relevant material on record. As agreed by the learned representatives of both the sides, the issue involved in this appeal is squarely covered by the decision of Hon'ble Bombay High Court in the case of CIT vs. Mahalaxmi Glass Works Pvt. Ltd. (supra) in favour of the assessee wherein it was held that in order to give effect to the provisions of section 145A, if there is any change in the closing stock at the end of the year, then there must necessarily be a corresponding adjustment made in the opening stock of that year. Respectfully following the said decision of Hon'ble jurisdictional High Court in the case of CIT vs. Mahalxmi Glass Works Pvt. Ltd. (supra) we uphold the impugned order of the learned CIT(Appeals) directing the AO to make adjustment on account of excise duty (cenvat credit) to the value of opening stock as well as closing stock and dismiss this appeal of the Revenue.
3 ITA No.6028/Mum/2010Assessment Year:2006-07
4. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on this 16th day of Dec.,2011.
Sd/- Sd/-
(V. Durga Rao) (P.M. Jagtap)
Judicial Member Accountant Member
Mumbai,
Dated : 16th Dec., 2011.
Copy to :
1. Appellant
2. Respondent
3. C.I.T.
4. CIT(A)
5. DR, G-Bench.
6. Guard File.
(True copy) By Order
Asstt. Registrar,
ITAT, Mumbai.
Wakode