PR. COMMISSIONER OF INCOME TAX - 7 vs. M/S PRATIBHA JEWELLARY HOUSE

- 1 -

NC: 2024:KHC:39721-DB ITA No. 53 of 2019

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 53 OF 2019 BETWEEN:

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 17.08.2018 PASSED IN ITA NO.2535/BANG/2017, FOR THE ASSESSMENT YEAR 2006-2007, PRAYING THIS HON'BLE COURT TO: DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND ETC.

THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:39721-DB ITA No. 53 of 2019

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Lava M for respondent/assessee. 2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 17.08.2018 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2535/Bang/2017 for the assessment year 2006-07. 3. This

Court,

admitted the appeal on 05.10.2021 to consider the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in deleting the addition made on

- 3 -

NC: 2024:KHC:39721-DB ITA No. 53 of 2019

account of undervaluation of closing stock, when the same has been correctly made by the assessing officer on the basis of the materials available on record? 2. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in not appreciating that the cost of inventories is to be calculated by using weighted average cost formula, as in accordance to AS-2, when in para 11 of its order, the Tribunal itself has accepted that the assessee is not able to show any documentary evidence identifying the ancient jewellery separately and as such, the Tribunal has passed a perverse order? 3. Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in ignoring that the auditors themselves have accepted that LIFO is not an accepted method for valuation of Jewelery, particularly when the assessing officer has established that each item of jewellery is not specifically identifiable, which has not been contradicted by the assessee and the assessee is unable to separately identify the ancient stock? 4. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in deleting the addition made on account

- 4 -

NC: 2024:KHC:39721-DB ITA No. 53 of 2019

of profit earned on unaccounted sales, when the same has been correctly made by the assessing officer? 5. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in ignoring the ratio of decision of the Hon'ble Supreme Court in the case of K.L. Tripathi vs. SBI & Other (AIR 1984 SC 273), wherein it is held that the opportunity for cross examination has to be asked for and only then the assessing officer is bound to provide it, particularly when the statement of witness has been duly confronted to the assessee and the assessee also has submitted its explanation, but never asked for any across examination?"

- 5 -

NC: 2024:KHC:39721-DB ITA No. 53 of 2019

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

MPK CT:VN List No.: 2 Sl No.: 0