CIT, ROHTAK vs. HARYANA CO.OP. SUGAR MILLS LTD. ROHTAK

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ITA/109/2009HC Punjab & HaryanaPHHC01084181200921 July 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Assessing Officer was not justified in applying the average sale rate for the whole year for the valuation of closing stock. The Tribunal's view that the valuation of closing stock should be taken as per the books of accounts and not by applying the average sale rate of the whole year was upheld. The Court found that the Revenue's counsel was unable to show any principle that would justify the AO's method. Consequently, the proposed question of law could not be held to be a substantial question of law. The addition of Rs.1,36,49,874/- made by the AO on account of under-valuation of stock was confirmed to be deleted. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, Commissioner of Income Tax, Rohtak, appealed an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench, concerning the assessment year 2003-04. The assessee is The Haryana Coop. Sugar Mills Ltd., Rohtak. The Assessing Officer (AO) had made additions to the assessee's declared income, which included interest on cane purchase tax and an addition to the value of closing stock. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted these additions. The ITAT upheld the deletions. The appeal to the High Court specifically challenges the ITAT's confirmation of the CIT(A)'s deletion of the addition made by the AO on account of under-valuation of stock.

What were the issues?

1. On the facts and in the circumstances of the case, whether the Hon'ble ITAT was right in law in confirming the order of CIT(A) Rohtak who deleted the addition of Rs.1,36,49,874/- made by the AO on account of under valuation of stock without passing any speaking order? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Assessing Officer was justified in applying the average sale rate for the whole year for the valuation of stock, instead of the average sale rate for the month of March adopted by the assessee. The Revenue was unable to show any principle justifying the application of the average sale rate for the whole year for stock valuation.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 21.7.2009 CORAM:- HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT: Mr.Krishan Kumar Mahta, Advocate, for the appellant. **** ADARSH KUMAR GOEL, J. (Oral)

1.

The Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal Delhi Bench, 'C' New Delhi passed in Assessee's Appeal in ITA No. 3465/Del/2007 for the assessment year 2003-

04.

Learned counsel presses only the following substantial question of law: “ On the facts and in the circumstances of the case, whether the Hon'ble ITAT was right in law in confirming the order of CIT (A) Rohtak who deleted the addition of Rs.1,36,49,874/- made by the AO on account of under valuation of stock without passing any speaking order ?”

2.

The assessee was a Cooperative Society dealing in the manufacturing and sale of sugar. Return declaring loss was filed. On assessment, the Assessing Officer made addition to the declared income by [2] adding interest on the cane purchase tax and further making addition to the value of the closing stock. The additions were deleted by the CIT(A) and upheld by the Tribunal. On the issue of deletion on account of interest liability, reference was made to the judgment of the Hon'ble Supreme Court Note: Whether this case is to be referred to the Reporter ........Yes/No

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