Income Tax Appellate Tribunal - Mumbai
Borosil Glass Works Ltd., Mumbai vs Assessee on 26 March, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "B", MUMBAI
Before Shri R.K.Gupta, JM and Shri R.S.Syal, AM
ITA No.2633/Mum/2009 : Asst.Year 2006-2007
M/s.Borosil Glass Works Limited The Addl.Commissioner of Income-tax
4th Floor, Khanna Construction House Circle 6(1)
44, K.G.Thadani Marg, Worli Mumbai.
Vs.
Mumbai - 400 018.
PA No.AAACB5484G.
(Appellant) (Respondent)
Appellant by : Shri Vijay Mehta
Respondent by : S/Shri S.S.Rana & Virendra Ojha
ORDER
Per R.S.Syal (AM) :
This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax u/s.263 of the Income-tax Act, 1961 on 6.3.2009 in relation to the assessment year 2006-2007.
2. Briefly stated the facts of the case are that the assessment in this case was completed u/s.143(3) on 10.1.2008. The learned CIT noted that the A.O. had not made necessary and adequate inquiry on the following issue:-
"As per clause 12(b) of Tax Audit Report in Form 3CD read with Annexure-V thereto, the assessee has given details of various adjustments to be made u/s.145A of the I.T.Act to demonstrate that net effect of these adjustments on the profit within the meaning of Section 145A of the I.T.Act is Rs.Nil. Similarly, as per Clause 22(a) of the tax audit report in Form 3CCD read with Annexure XVII thereto, the assessee has given details of unavailed modvat credit at the end of the year amounting to Rs.18,65,302/-. While completing the assessment, the Assessing Officer has not made any verification regarding the basis of various figures shown in Annexure V for the purpose of making adjustment u/s.145A of the Act. Similarly the Assessing Officer has not examined whether any addition is required to be made u/s.145A of the I.T.Act in respect of unavailed modvat credit of Rs.18,65,302/- as per details given in Annexure XVII mentioned above."2 ITA No.2633/Mum/2009
M/s.Borosil Glass Works Limited.
3. After giving due opportunity to the assessee, the assessment was set aside with a direction to make fresh assessment after making inter alia the following inquiry :-
"(a) He should obtain the details and basis of various figures given in Annexure V to Clause 12(b) of Tax Audit Report in Form 3CD to verify the correctness of the same.
(b) He shall obtain the details and basis of various figures given in Annexure XVII to Clause 22(a) of Tax Audit Report in form No.3CD to verify the correctness of the same.
(c) He shall also examine whether any part of unutilized modvat credit of Rs.18,65,302 is to be added to the closing stock in view of provisions of section 145A of the I.T.Act."
4. We have heard the rival submissions and perused the relevant material on record. It is noted from the impugned order that the learned CIT directed the Assessing Officer to give effect to the provisions of section 145A which was not done in the assessment made u/s.143(3). The learned A.R. fairly conceded that there is no discussion in the assessment order on this point. Section 145A has been inserted by the Finance (No.2) Act, 1998 with effect from 1.4.1999 which provides that the valuation of purchase and sale of goods and inventory for the purpose of determining the income chargeable under the head `Profits and gains of business or profession' shall be (i) in accordance with the method of accounting regularly employed by the assessee and (ii) further adjusted to include the amount of any tax, duty, cess or fee (whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. This section is applicable to the assessment year under consideration. It is an agreed position that the valuation of the inventories, purchase and sale of goods was not done as per the mandate of this section. The Assessing Officer 3 ITA No.2633/Mum/2009 M/s.Borosil Glass Works Limited.
merely accepted what the assessee stated and did not apply his mind to the material before him with a view to give effect to the provisions of section 145A. The Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT [(2000) 243 ITR 83 (SC)] has held that the CIT is competent to revise the order passed by the A.O. in which the later had accepted whatever was stated before him without application of his mind. Similar view has been taken recently by the Special Bench of the Tribunal in the case of Rajalakshmi Mills Limited Vs. ITO [(2009) 121 ITD 343 (Chennai) (SB)]. The learned CIT has referred to five judgments in para 8 of the impugned order which empower him to take action u/s.263 where A.O. failed to make inquiry. The said judgments are also fully applicable to the facts and situation of the instant case. Under these circumstances we do not find any infirmity in the impugned order, which is hereby upheld.
5. In the result, the appeal is dismissed.
Order pronounced on this 26th day of March 2010.
Sd/- Sd/-
(R.K.Gupta) (R.S.Syal)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai : 26th March, 2010.
Devdas*
Copy to :
1. The Appellant.
2. The Respondent.
3. The CIT concerned
4. The CIT - VI, Mumbai.
5. The DR/ITAT, Mumbai.
6. Guard File.
TRUE COPY.
By Order
Assistant Registrar, ITAT, Mumbai.