THE C.I.T. JDR. vs. M/S JANTA COOP. SUGAR MILLS LTD.

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ITR/128/1997HC Punjab & HaryanaPHHC01035367199713 August 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 question referred by the ITAT was a substantial question of law. The Court found that the ITAT's finding for deleting the additions was based on an appreciation of evidence and was not shown to be perverse. As the ITAT is the final authority on a question of fact, it was justified in deleting the additions after appreciating the evidence on record. Therefore, the question of law is answered against the revenue and in favour of the assessee. The reference is disposed of accordingly. No specific issue was left undecided.

What were the facts?

The Commissioner of Income-tax, Jalandhar (applicant/revenue) has filed a reference application before the High Court of Punjab and Haryana at Chandigarh against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The assessment year(s) are not explicitly stated. The order under challenge is the ITAT's deletion of an addition of Rs. 12,31,658/- made by the Assessing Officer and upheld by the Commissioner of Income-Tax (Appeals) on account of the valuation of closing stock of sugar. The assessee is M/s Janta Co-operative Sugar Mills Ltd., Bhogpur (respondent/assessee). The ITAT deleted the addition, observing that the assessee's method of valuing closing stock was consistent for several years and there was no reason not to accept the declared value of crystal sugar. The High Court is asked to opine on a substantial question of law referred by the ITAT.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned ITAT was right in law in deleting the addition of Rs. 12,31,658/- made by the Assessing Officer and upheld by Commissioner of Income-Tax (Appeals) on account of valuation of closing stock of sugar? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's reasoning, as stated in the facts, suggests the assessee's method of stock valuation was consistent and acceptable. Revenue's Contention: The revenue, represented by the Commissioner of Income-tax, argued that the ITAT was not right in deleting the addition. The judgment does not explicitly detail the revenue's arguments beyond the fact that they are challenging the ITAT's deletion of the addition.

Which sections of the Income-tax Act were involved?

None explicitly mentioned

AI-generated summary — verify with the full judgment below

(1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 13.8.2009 The Commissioner of Income-tax Jalandhar ..........Applicant Versus M/s Janta Co-operative Sugar Mills Ltd., Bhogpur ..........Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Ms. Navender P.K. Singh, Advocate for the applicant. **** ADARSH KUMAR GOEL, J. (Oral)

1.

The Income Tax Appellate Tribunal, Amritsar Bench, Amritsar has referred, in compliance of order of this Court dated 20.5.1997, following substantial question of law for opinion of this Court:- “Whether, on the facts and in the circumstances of the case, the ld. ITAT was right in law in deleting the addition of Rs. 12,31,658/- made by the Assessing Officer and upheld by Commissioner of Income-Tax (Appeals) on account of valuation of closing stock of sugar?”

2.

The assessee is engaged in manufacturing of sugar. During the assessment, additions were made on the ground that from the accounts of the assessee, true income could not be determined. The basis for addition, inter alia, was difference in valuation of sugar. The CIT(A) upheld the additions. The Tribunal, however, reversed the view taken by the lower authorities and deleted the additions. It was observed that (2) method of valuing closing stock adopted by the assessee was consistent for several years. There was also no reason not to accept the value of crystal sugar declared by the assessee.

3.

We have heard learned counsel for the revenue and perused the orders.

4.

Reference to the order of the Tribunal shows that finding for deleting the additions made by the Assessing Officer as upheld by the CIT (A) is based on appreciation of evidence. The finding is not shown to be perverse. The Tribunal being final authority on a question of fact, was justified in deleting the additions after appreciating evidence on record.

5.

Accordingly, the question referred is answered against the revenue and in favour of the assessee.

6.

The reference is disposed of. (ADARSH KUMAR GOEL) JUDGE August 13, 2009

(DAYA CHAUDHARY) pooja JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No

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