Income Tax Appellate Tribunal - Pune
Mouldcraft (Hindustan) Pvt. Ltd., ... vs Assessee on 18 June, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench B, Pune
Before Shri Shailendra Kumar Yadav, Judicial Member
and Shri G.S. Pannu, Accountant Member
I.T.A. No. 1166/PN/2009 : A.Y. 2005-06
Mouldcraft (Hindustan) Pvt. Ltd.,
Gut No. 99, Village Pharola
Paithan Road,
AURANGABAD
PAN AABCM 2508 F Appellant
Vs.
I.T.O. Range 1, Aurangabad Respondent
Appellant by: Shri Kishore Phadke
Respondent by: Shri Hemant Kumar Leuva
ORDER
PER SHAILENDRA KUMAR YADAV, JM
This appeal by the assessee is directed against the order of the CIT-(A) Aurangabad dated 18-6-2009 for A.Y. 2005-06 on the following grounds:
"1. On the facts and in the circumstances of the case, the learned A.O i.e. the Income tax Recovery Officer (TRO) Range 1, Aurangabad, erred in law and CIT(A) Aurangabad has erred in confirming the same.
2. On the facts and in the circumstances of the case, the learned Assessing Officer has erred in holding that the unutilized closing balance of RG - 23A - II is an item of Tax related to closing stock of the Company and Commissioner of Income Tax (Appeals), Aurangabad erred in confirming the same.
3. The learned Assessing Officer further erred on facts in ignoring the specific mention of the RG - 23 - II balances, 145A working by the GROSS method etc. in the Tax Audit Page 2 of 4 ITA No. 1166/PN/2009 Mouldcraft (Hindustan) A.Y. 2005-06 Report of the Assessee Company as well as specific submissions before him during the course of assessment proceedings and Commissioner of Income Tax (Appeals), Aurangabad erred in confirming the same.
4. The learned Assessing Officer erred in law in not appreciating that an item to be included in closing stock must have been constructively debited to the Profit and Loss A/c. He thus erred in law and on facts in ignoring cardinal principals of accountancy and fundamental Jaw failed in appreciating the matching principal/concept of the matter while the Commissioner of Income Tax (Appeals), Aurangabad erred in confirming the same.
5. The learned Assessing Officer has erred in considering the provisions of law and has failed in appreciating the decisions of honorable apex court and other court which have held repeatedly that either GROSS or NET method oil valuation of stocks, purchases etc. do not lead to different profit I income and Commissioner of Income Tax (Appeals), Aurangabad erred in not considering the same.
6. The order under section 143(3), dated 19.12.2007 of Income Tax Recovery Officer, Range-1, Aurangabad is bad in law and the order of the Commissioner of Income Tax (Appeals), Aurangabad confirming the aforesaid order also needs to be cancelled."
2. The assessee is engaged in manufacturing of excisable products. For the assessment year under consideration, the assessee filed its return declaring total income at Rs. 14,20,680/-. As per section 145A the assessee is required to value purchase and sale of goods and inventory including the amount of any tax, duty, cess or fee actually paid or incurred by the assessee to bring the goods. The Assessing Officer found that the assessee had not included the unavailed modvat credit while recording closing stock of material. Accordingly, the Assessing Officer worked out an amount of Rs. 8,04,428/- as difference of closing balance of modvat Page 3 of 4 ITA No. 1166/PN/2009 Mouldcraft (Hindustan) A.Y. 2005-06 credit and the opening balance of Cenvat credit and added it to the total income of the assessee. The assessee carried the matter in appeal before the first appellate authority who has confirmed the action of the Assessing Officer.
3. During the proceedings before us, the learned counsel for the assessee submitted that similar issue has come up for consideration before co-ordinate Bench of this Tribunal in the assessee's own case for A.Y. 2003-04 wherein following the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Mahavir Aluminum Ltd. (2008) 297 ITR 77 (Del) the ITAT has reversed the view taken by the CIT(A) and directed to allow the claim of the assessee. The learned DR has not disputed this factual position.
4. After hearing both the parties and perusing the material on record, we find that similar issue raised in this appeal was the subject matter of appeal before co-ordinate Bench of this Tribunal and the Tribunal vide its order in ITA No. 712/PN/2006 for A.Y. 2003-04 dated 29-5-2009 has decided the issue in favour of the assessee following the judgment of Hon'ble Delhi High Court in the case of Mahavir Aluminum Ltd. (supra). It has been held by the Hon'ble Delhi High Court in the case of Mahavir Aluminum Ltd. (supra) that to give effect to section 145A if there is a change in the Page 4 of 4 ITA No. 1166/PN/2009 Mouldcraft (Hindustan) A.Y. 2005-06 closing stock as on the closing of the accounting period, here must necessarily be a corresponding adjustment in the opening stock. So following the aforesaid decision of co-ordinate Bench of this Tribunal, we reverse the view taken by the authorities below and direct to allow the claim of the assessee.
5. In the result, the appeal of the assessee is allowed.
Decision pronounced in the open court on 23rd February 2011.
Sd/- sd/-
(G.S. Pannu) (Shailendra Kumar Yadav)
Accountant Member Judicial Member
Pune dated the 23rd February 2011
Ankam
Copy of the order is forwarded to :
1. The Appellant
2. The Respondent
3. The CIT - (A) Aurangabad
4. The CIT AURANGABAD
4. The D.R, 'B' Bench, Pune
5. Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Pune