ACIT, NEW DELHI vs. M/S. LAKSHMI SUGAR MILLS CO. LTD., NEW DELHI

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ITA 2007/DEL/2015Status: DisposedITAT Delhi21 June 2018AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO made the addition without sufficient material on record and that the authorities below are bound to follow the ITAT's order. The pendency of a departmental appeal before the High Court does not justify making an addition against the assessee.

What were the facts?

The Assessing Officer (AO) made an addition on account of excise duty payable on closing stock. The assessee contended that including excise duty in closing stock would not affect the Profit & Loss account. The CIT(A) deleted the addition, following a previous ITAT order.

What were the issues?

Whether excise duty on closing stock, if not included, warrants an addition to income. Whether the pendency of a departmental appeal before a higher court justifies an addition when the lower appellate authority has deleted it.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “D” : DELHI

Before: SHRI BHAVNESH SAINI & SHRI L.P. SAHU

Hearing: 05.06.2018Pronounced: 21.06.2018

the Order of the Ld. CIT(A)-V, New Delhi, Dated 05.01.2015, for the A.Y. 2010-2011, challenging the deletion of addition of Rs.66,60,305/-.

2 ITA.No.2007/Del./2015 M/s. Lakshmi Sugar Mills Co. Ltd., New Delhi. 2. The A.O. made addition on account of excise duty payable on stocks under section 43B as on 31.03.2012. The A.O. had made the addition on the ground that excise duty was not included in the value of closing stock as on 31.03.2012. The assessee argued that addition of excise duty of closing stock will have no affect in P & L A/c of the company as it is also to be included in the debit side of the P & L A/c in opening stock, purchase and sales of the P & L A/c. The Ld. CIT(A) in A.Y. 2005-2006 has deleted the similar addition and the Tribunal dismissed the appeal of the Revenue. The Ld. CIT(A) following the order of the ITAT deleted the addition and allowed the appeal of the assessee.

3.

After considering the rival submissions, we do not find any merit in the departmental appeal. The A.O. in the assessment order without bringing any facts on record, made the addition and noted that in A.Y. 2005-2006, similar addition have been deleted by the ITAT. However, the Departmental Appeal is pending before Hon’ble Delhi High Court. Merely

3 ITA.No.2007/Del./2015 M/s. Lakshmi Sugar Mills Co. Ltd., New Delhi. because the Departmental Appeal was pending before Hon’ble Delhi High Court is no ground to make addition against the assessee. The authorities below are bound to follow the Order of ITAT being the second appellate authority. In the absence of any material on record against the assessee, we do not find any justification to interfere with the order of the Ld. CIT(A) in deleting the addition. The Departmental appeal stands dismissed.

4.

In the result, appeal of the Department is dismissed.

Order pronounced in the open Court.

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