Melmould Corporation v. CIT

M/S Ekta Housing Pvt. Ltd., Mumbai vs. Dy. CIT Central Circle-6(2), Mumbai

The appeal of the revenue is dismissed

Bench: Shri S.Rifaur Rahman () & Shri Ravish Sood ()

…ified by the judgment of the Hon‟ble High Court of Bombay in the case of Bajaj Auto Ltd. Vs. CIT (2016) 389 ITR 259 (Bom).Also, the Hon‟ble High Court of Bombay in its earlier judgment passed in the case of Melmould Corporation Vs. Commissioner of Income Tax, 202 ITR 789 (Bom), relying on the decision of Karnataka High Court in Commissioner of Income Tax Vs. Corporation Bank Ltd. (1988) 174 ITR 616 (Kar) had held that where the change in the method of accounting is a bonafide one which was thereafter consistently followed by the assessee year after year, then, the change would have to be accepted irrespective of…

DCIT 14(20(1), Mumbai vs. Icici Home Finance Co.Ltd, Mumbai

Bench: Shri G.Manjunatha & Shri Ravish Sooddcit-14(2)(1),432, 4Th Floor, M/S Icici Home Finance Co. Ltd. Aaykar Bhavan, 7Th Floor, West Wing South Tower, Mumbai-400 020 Vs. Icici Bank Towers, Bandra Kurla Complex, Bandra (East), Mumbai-400 051 Pan – Aaaci6285N (Appellant) (Respondent) C.O. No. 81/Mum/2018 (Arising Out Of Ita No.7223/Mum/2016) (Assessment Year: 2009-10)

…the CIT(A) relied on the judgment of the Hon‟ble High Court of Bombay in the case of CIT Vs. Modern Terry Towers Ltd. (2014) 43 taxmann.com 466 (Bom), wherein the earlier view taken by the Hon‟ble High Court in the case of Melmould Corporation Vs. CIT (1993) 202 ITR 789 (Bom) was reaffirmed. Apart there from, it was observed by him that the aforesaid recognition of fees from PSG by the assessee was well in conformity with the mercantile system of accounting, as per which an income was to be recorded as having been accrued only if there was certainty of receiving it and not when it had been waived. In support of…

DCIT Cir - 3(1), Mumbai vs. M/S. Gujarat Ambuja Cements Ltd., Mumbai

In the result, Revenue’s appeal is dismissed

Bench: Shri Saktijit Dey & Shri N.K. Pradhan

…u/s. 43B of excise duty payable on stock of finished goods as on 31.03.1999 of Rs.1,32,58,505/-, details of which are available on page no. 37 & 45 of Paper Book, the AO while making the assessment concluded that in case of Melmould Corporation Vs. CIT (1993) 202 ITR 789 (Mum) held that unutilized MODVAT credit balance shall be added to the closing stock. The CIT(A) while dealing with this ground concluded the unutilized MODVAT credit at the end of year should be added to the income of assessee. However, corresponding adjustment in the opening stock should also be made. AR of the assessee argued that unutilized b…

M/S. Gujarat Ambuja Cements Ltd., Mumbai vs. DCIT RG. 3(1), Mumbai

In the result, Revenue’s appeal is dismissed

Bench: Shri Saktijit Dey & Shri N.K. Pradhan

…u/s. 43B of excise duty payable on stock of finished goods as on 31.03.1999 of Rs.1,32,58,505/-, details of which are available on page no. 37 & 45 of Paper Book, the AO while making the assessment concluded that in case of Melmould Corporation Vs. CIT (1993) 202 ITR 789 (Mum) held that unutilized MODVAT credit balance shall be added to the closing stock. The CIT(A) while dealing with this ground concluded the unutilized MODVAT credit at the end of year should be added to the income of assessee. However, corresponding adjustment in the opening stock should also be made. AR of the assessee argued that unutilized b…

DCIT 14(2)(1), Mumbai vs. Koch Chemical Technology Group India P.Ltd, Mumbai

The appeal of the Revenue is dismissed

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2013-14 Dcit-14(2)(1), M/S Koch Chemical Room No.432, 4Th Floor, Technology Group India Pvt. बनाम/ Aayakar Bhavan, Ltd. Vs. M. K. Road, 10Th Floor, Corporate Park-Ii Mumbai-400020 Sion Trombay Road Chembur, Mumbai-400071 (राज"व /Revenue) ("नधा"रती /Assessee) Pan. No. Aabck3688G

…ified in confirming the order of the Commissioner of Income-tax (Appeals) whereby he directed the Assessing Officer to make adjustment of unutilized Modvat credit to the opening stock and thus ignoring the ratio laid down in Melmould Corporation v. CIT [1993] 202 ITR 789 (Bom)wherein it was held that changing the value of opening stock will lead to chain reaction and hence the same should not be done ?" 2. This question has been dealt with and answered by the Delhi High Court in the case of CIT v. Mahavir Alluminium Ltd. [2008] 297 ITR 77 (Delhi). This question concerns the method of valuation of inventory as con…

Larsen & Toubro Ltd, Mumbai vs. Asst CIT Cir 2(2), Mumbai

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

Bench: Shri Mahavir Singh () & Shri N.K. Pradhan () Assessment Year: 1999-00 Larsen & Toubro Ltd. Dcit-2(2) Taxation Department L&T Room No. 577, 5Th Vs. House, N.M. Ballard Estate, Floor, Aayakar Mumbai-400001 Bhavan, M.K. Road Mumbai-400020. Pan No. Aaacl0140P Appellant Respondent Assessment Year: 1999-00 Dcit-2(2) Larsen & Toubro Ltd. Room No. 577, 5Th Floor, Taxation Department Vs. Aayakar Bhavan, M.K. L&T House, N.M. Road Ballard Estate, Mumbai-400020. Mumbai-400001 Pan No. Aaacl0140P Appellant Respondent Assessee By : Mr. J.D. Mistry & Mr. Madhur Agarwal, Ar Revenue By : Mr. Anadi Varma, Cit-Dr Date Of Hearing : 14/02/2018 Date Of Pronouncement : 28/03/2018

…not allowable as this will result in a retrospective chain reaction to disturb the profit figure and profit and loss account of earlier assessment years which have been finalized on this issue. The AO relied on the decision in the case of Melmould Corporation 202 ITR 789 (Bom.) in this regard. However, as a corollary MODVAT element attributable to opening stock of raw materials consumed during the year and sales tax set off availed with respect to goods in opening stock of both raw material and traded goods against the set off availed will also be excluded for the above purposes and accordingly only MODVAT and sa…

DCIT CC 6(2), Mumbai vs. Dimple Drums & Barrels P.Ltd, Mumbai

In the result, appeal of the Revenue is dismissed whereas appeal of the assessee is allowed in part

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm Dcit Cc 8(2) Vs. M/S. Dimple Drums & Erstwhile Dcit Cc 35 Barrels Pvt. Ltd., R.No.1903, 19Th Floor 516, Makers Chambers V, 5Th Floor, 221 Air India Building Nariman Point Jamnalal Bajaj Marg Mumbai – 400 021 Nariman Point, Mumbai – 400 021 Pan/Gir No. Aaacd4604L Appellant) Respondent) .. M/S. Dimple Drums & Vs. Acit- Cc-35 Barrels Pvt. Ltd., (New Central Circle – 6(2) 516, Makers Chambers Mumbai – 400 020 V, 5Th Floor, 221 Jamnalal Bajaj Marg Nariman Point, Mumbai – 400 021 Pan/Gir No. Aaacd4604L Appellant) .. Respondent)

…IN THE INCOME TAX APPELLATE TRIBUNAL “J ”, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM DCIT CC 8(2) Vs. M/s. Dimple Drums & Erstwhile DCIT CC 35 Barrels Pvt. Ltd., R.No.1903, 19th Floor 516, Makers Chambers V, 5th Floor, 221 Air India Building Nariman Point Jamnalal Bajaj Marg Mumbai – 400 021 Nariman Point, Mumbai – 400 021 PAN/GIR No. AAACD4604L Appellant) Respondent) .. M/s. Dimple Drums & Vs. ACIT- CC-35 Barrels Pvt. Ltd., (New Central Circle – 6(2) 516, Makers Chambers Mumbai – 400 020 V, 5th Floor, 221 Jamnalal Bajaj Marg Nariman Point, Mumbai – 400 021 PAN/GIR No. AAACD4604L Appellan…

M/S. Kansai Nerolac Paints Ltd ( Erstwhile Known As Goodlass Nerolac Paints Ltd), Mumbai vs. The DCIT RG 6(3)

In the result, the appeal for the AY 2005-06 is partly allowed

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2004-05 Kansai Nerolac Paints Ltd. Dcit, Range 6(3) (Erstwhile Known As Room No. 576, Vs. Goodlass Nerolac Paints Ltd.) Aayakar Bhavan, M.K. Nerolac House, G.K. Marg, Marg, Lower Parel, Mumbai-400020. Mumbai-400013. Pan No. Aaacg1376N (Appellant) (Respondent) Assessment Year: 2005-06 & Assessment Year: 2006-07 Kansai Nerolac Paints Ltd. Addl. Cit, Range 6(2) (Erstwhile Known As Aayakar Bhavan, M.K. Vs. Goodlass Nerolac Paints Ltd.) Marg, Nerolac House, G.K. Marg, Mumbai-400020. Lower Parel, Mumbai-400013. Pan No. Aaacg1376N (Appellant) (Respondent) Assessee By : Mrs. Arati Vissanji, Ar Revenue By : Ms. Pooja Swaroop, Dr Date Of Hearing : 02/02/2018 Date Of Pronouncement: 19/03/2018

…lanation of the assessee and made an addition of Rs.3,93,57,123/- as unutilized MODVAT credit to the closing stock. Kansai Nerolac 6.2 In appeal, the Ld. CIT(A) agreed with the reasons given by the AO and following the decision in Melmould Corporation v. CIT 202 ITR 789 (Bom) confirmed the disallowance of Rs.3,93,57,213/- made by the AO. 6.3 Before us, the Ld. counsel of the assessee submits that the appellant follows exclusive method of accounting for MODVAT. Reliance is placed by her on the decision in Indo Nippon Chemical Co. Ltd. 261 ITR 275 (SC), Mahavir Alluminium Ltd. 297 ITR 77 (Del), Mahalaxmi Glass Wor…

Sbi Capitalmarkets Ltd vs. DCIT Sp. RG 27

The appeal of the AO stands dismissed

…appeal before the FAA,the assessee made elaborate submissions and placed reliance on the ratio laid down in 4 cases,namely National & Grindlays Ltd.(202 ITR 559) Doom Dooma India Ltd.(200ITR496) West Coast Paper Mills Ltd.(193 ITR 349) and Memould Corporation(202 ITR 789). After considering the available material,the FAA held that the method followed by the assessee was a recognised method of accounting,that there was no material to hold that the method followed was not bonafide,that it was incorrect to hold that it could visualise that the tax rates would fall in the subsequent years,that the change in the metho…

Anchor Electricals Pvt. Ltd., Mumbai vs. A.C.I.T. Cen.Cir.41, Mumbai

In the result of appeals of the assessee are partly allowed

Bench: Shri C.N. Prasad () & Shri Ashwani Taneja ()

…the year but since it is the year of 9 Anchor Electricals transition, the assessee is entitled to the claim on dual basis. In support of this arguments he placed reliance upon the judgment of Hon’ble Bombay High Court in the case of Melmould Coperation v. CIT 202 ITR 789 (Bom) wherein it was held that in case of change of method of accounting, the assessee would obviously make higher claim in the year in which changed takes place; however in the same cannot be disallowed merely because the claim is higher as compared to other years. Reliance was also placed on the judgment of Hon’ble Delhi High Court in the case…

Balkrishna Industries Ltd, Mumbai vs. Addl CIT RG 6(1), Mumbai

In the result, the appeal of assessee is partly allowed for statistical purposes

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am Balkrishna Industries Ltd. Addl. Commissioner Of Income Tax, Bkt House, C Wing, 15 Th Floor, Cit Cir Rg 6(1) Trade World, Kamal Mills Vs. Mumbai Compund, Senapati Bapat Marg, Lower Parel Mumbai-400 013 Appellant .. Respondent Pan No. Aaacb3333J Assessee By .. Shri Farrokh Irani, Ar Revenue By .. Shri Suman Kumar, Dr .. Date Of Hearing 09-02-2017 Date Of Pronouncement .. 26-04-2017 O R D E R Per Mahavir Singh, Jm:

…by the same. We find that the assessee has followed a bonafide system of accounting and once the system is bonafide no interference can be done by Revenue in the valuation of stock. Hon’ble Bombay High Court in the case of Melmould Corporation vs. CIT (1993) 202 ITR 789 (Bom) has considered the issue and held that the assessee could not be required to revalue the opening stock by excluding all overhead expenses when the assessee has been permitted to revise the method of valuing Page 10 of 16 Balkrishna Industries Ltd. AY:08-09 the closing stock for that year, as the assessee has decided to adopt the new method…

DCIT Cir - 3(1), Mumbai vs. M/S. Gujarat Ambuja Cements Ltd., Mumbai

In the result, appeal filed by the revenue is dismissed

Bench: Shri C.N.Prasad, Jm & Shri Rajesh Kumar, Am आयकर अपील सं/ I.T.A. No. 1379/Mum/2007 (िनधा"रण वष" / Assessment Year: 2000-01) बनाम/ Acit (Ltu) – 1 M/S. Gujarat Ambuja World Trade Centre, Cements Ltd. Vs. Centre – 1, 29Th Floor, 122, Maker Chambers-Iii, Cuffe Parade, Nariman Point, Mumbai - 400005 Mumbai - 400021 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacg0569P (अपीलाथ" /Appellant) (""थ" / Respondent) .. Revenue By: Shri Anand Mohan (Cit-Dr) Assessee By: Shri Soumen Adak सुनवाई की तारीख / Date Of Hearing: 12.01.2017 घोषणा की तारीख /Date Of Pronouncement: 07.04.2017 आदेश / O R D E R Per C.N.Prasad, Jm:

…e A.O. u/s.271(1)(c) on the addition on account of unutilized Modvat credit of Rs.2,20,57,408/- which was added by the A.O. to the declared income of the assessee relying on the jurisdictional High Court’s decision in the case of Melmould Corporation Vs. CIT, 202 ITR 789 (Bom), in respect of which wrong claim was made by the assessee thus attracting the provisions of Explanation 1 to Section 271(1)(c) resulting in levy of penalty. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty on 2 A.Y.2000-01 disallowance of Employees Stock Option Scheme expenses o…