AHURA ASSOCIATES,MUMBAI vs. ADDL CIT RG 23(1), MUMBAI

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ITA 2792/MUM/2015Status: DisposedITAT Mumbai21 March 2017AY 2010-113 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) had not adequately adjudicated the issue of closing stock valuation. Therefore, the Tribunal set aside the issue and remanded it back to the CIT(A) for fresh adjudication after providing a reasonable opportunity of being heard to the assessee.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming an addition of Rs. 6,75,460/- on account of closing stock valuation. The assessee also argued that the CIT(A) failed to provide a sufficient opportunity to present their case and did not adjudicate this issue properly.

What were the issues?

Whether the CIT(A) properly adjudicated the addition on closing stock valuation and whether sufficient opportunity was granted to the assessee.

Which sections of the Income-tax Act were involved?

Section 145A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

For Appellant: Shri Kurush Noshir Jungalwala &

Ahura Associates Addl. Commissioner of Income Tax, 1 Kakee Manzil, B.J. RD Vs. Matru Mandir, Grant RD Bandra (W) Mumbai-400 050 Mumbai Appellant .. Respondent PAN No. AAEFA6887D Assessee by .. S/Shri Kurush Noshir Jungalwala & Paresh Kapasi, AR .. Miss Anupama Singla, DR Revenue by Date of hearing .. 21-03-2017 .. Date of pronouncement 21-03-2017 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT(A)-32, Mumbai, in appeal No. CIT(A)-32/IT-14/Addl.23(1)/2013-14 dated 05-03-2015. The Assessment was framed by Addl. CIT Circle 23, Mumbai for the A.Y. 2010- 11 vide order dated 22-03-2013 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the addition of Rs.6,75,460/- on account of closing stock of valuation and another plea of assessee is that the CIT(A) failed to grant sufficient opportunity to present his case and even CIT(A) has not adjudicate this issue. For this assessee has raised following three grounds: - “1. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of Rs.6,75,460/- on account that closing stock valuation. The addition is unwarranted and hence may be deleted.

2.

Alternatively, the Ld. Assessing officer may be directed to grant consequentially relief in the subsequent year's opening stock.

3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to grant sufficient opportunity to present the case and hence principles of natural justice are grossly violated.”

3.

At the outset, the learned Counsel for the assessee took us through the order of CIT(A) in Para 5.1 to 5.3 which reads as under: - “5.1 As per the P&L a/c as on 31.03.2010, the value of closing stock is shown as Rs.1,15,95,000/-. The AO asked the appellant to furnish details of stock. The AO observed that appellant had incurred direct expenses of unloading charges, wages, carriage, Import duty arid labour charges amounting to Rs.12,32,032/- In accordance with Section ,145A of the Act, the overhead cost proportionate to the closing stock was computed at R5.6,75460/-- and the same was added.

5.2 The appellant submitted that the addition was uncalled for and that it values closing stock on a consistent basis year to year. All documentary evidence was furnished before the AO.

5.3 1 have carefully considered the facts and circumstances of the case. The appellant has not furnished any evidence before me as to how the closing stock is valued, copies of stock register, etc. As per Section 145A of the Act, the stock has to include the value of tax, duty, cess or fee actually incurred to bring goods to present location. Hence, I am left with no option but to confirm the addition made by the AO. Accordingly, ground No. 5-8 are dismissed.”

4.

In view of the above findings of CIT(A), the learned Counsel for the assessee argued that there is no iota of finding by CIT(A) about this issue. Hence, he requested that this issue be remitted back to the file of the CIT(A) for fresh adjudication of the issue after allowing reasonable opportunity of being Page 2 of 3 heard to the assessee. On query from the Bench the learned Sr. DR has not objected to remanding of the matter to the file of the CIT(A).

5.

After hearing both the sides and going through the facts and circumstances of the case, we noticed that the CIT(A) has not at all adjudicate this issue hence, we set aside this issue back to the file of the CIT(A) for fresh adjudication. Matter is remanded back to the file of the CIT(A), who will decide after allowing reasonable opportunity of being heard to the assessee. 6. In the result, the appeal of assessee is allowed for statistical purposes. Order pronounced in the open court on 21-03-2017.

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