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

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BANGALORE. …APPELLANTS

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.2539/Bang/2017 for the assessment year 2010-11.

This

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?

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?

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 of profit earned on unaccounted sales, when the

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?"

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.