DCIT,SPRCIAL RANGE-2, CHENNAI vs. VIJAYASHREE SPINNING MILLS LTD , CHENNAI

This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) IX, Chennai dated 31.07.1998 relevant to the assessment year 1991-92.

Facts are, in brief, that from the letter filed by the ld. Counsel for the assessee dated 06.10.2021, the assessee filed its return of income for the assessment year 1991-92 on 31.12.1991 and the assessment was completed under section 143(3) of the Income Tax Act, 1961 [“Act” in short] dated 09.03.1994. Revision order under section 263 of the Act dated 15.03.1995 was passed by the ld. CIT in respect of difference in value of closing stock and disallowance under section 10B of the Act. The assessee has filed an appeal against the revision order passed under section 263 of the Act before the ITAT in the year 1995. In pursuance to the directions of the ld. CIT under section 263 of the Act, the Assessing Officer had verified and accepted the submissions made by the assessee explaining the reconciliation of the closing stock and made addition only with regard to disallowance under section 10B of the Act in the order under section 143(3) r.w.s. 263 of the Act dated 28.02.1997.

The assessee filed an appeal before the ld. CIT(A) for the issue of disallowance of 10B of the Act. The ld. CIT(A) has allowed the claim of 10B of the Act vide his order dated 31.07.1998.

The Department has filed an appeal before the ITAT against the order of the ld. CIT(A) in respect of claim under section 10B of the Act. The ITAT, by order dated 19.07.2007, has quashed the order passed by the ld. CIT under section 263 of the Act and also dismiss the appeal filed by the Revenue against the ld. CIT(A)’s order in respect of relief granted under section 10B of the Act. The Department filed further appeal before the Hon’ble Madras High Court and the Hon’ble High Court has dismissed the appeal of the assessee in respect of disallowance made under section 10B of the Act and the issue with regard to closing stock has been remitted back to the ITAT to adjudicate vide its order in T.C.A. Nos.386 to 389 of 2008 dated 14.12.2016.

In view of the above, the ld. Counsel for the assessee has submitted that while filing the appeal before the Hon’ble Madras High Court against the order of the ITAT, the Revenue had inadvertently mentioned the closing stock issue under the incorrect assessment (i.e., 1991-92 was mentioned instead of AY 1990-91). Actually, the issue pertains to assessment year 1990-91 and the same had already attained its finality vide order dated 28.02.2017 passed by the Assessing Officer. Thus, the ld. Counsel for the assessee has submitted that this appeal may be dismissed.

On the other hand, the ld. DR fairly accepted the submissions made by the assessee.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In view of the detailed submissions made by the ld. Counsel for the assessee vide his written submission dated 06.10.2021, the appeal filed by the Department becomes infructuous and liable to be dismissed. Accordingly, the appeal filed by the Revenue is dismissed.

In the result, the appeal filed by the Revenue is dismissed.