Barrier Films P. Ltd, Mumbai vs Assessee
- CitationI.T.A. No.596/Mum/2012
Ratio decidendi
The rule this decision rests on
The Tribunal condoned a delay of 47 days in filing the appeal, finding sufficient cause on the assessee's application, and admitted the appeal for hearing. Where the assessee has consistently followed a particular method of accounting for modvat/Cenvat credit, the assessing officer is required to examine the working furnished by the assessee to determine whether that method complies with section 145A of the Income Tax Act, 1961, and the addition under clause (b) of that section cannot be sustained on a bare rejection of the method without such examination. Where the question whether the assessee's method of accounting complies with section 145A depends on working papers that were furnished but not examined by the tax authorities, the matter is to be restored to the assessing officer with a direction to examine those working papers and decide the issue afresh in accordance with law, after affording the assessee an adequate opportunity of being heard.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) सव ी बी.आर.बा करन, लेखा सद य एवं ी संजय गग , या यक सद य के सम
आयकर अपील सं./I.T.A. No.596/Mum/2012 ( नधा रण वष / Assessment Year : 2007-08)
M/s Barrier Films Pvt Ltd, बनाम/ ACIT-8(OSD), B-31, Ground Floor, Mumbai Vs. New Epire Indl, Estate, Kondivita road, Andheri, (E), Mumbai-400059 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. : AAACB3298C
अपीलाथ ओर से / Assessee by Shri P K Parida/ Ms.Sanjukta Chowdhary यथ क" ओर से/ Revenue by Shri Asghar Jain V P
सन ु वाई क" तार&ख / Date of Hearing : 15.1.2015 घोषणा क" तार&ख /Date of Pronouncement : 13. 2.2015
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
The appeal by the assessee is directed against the order dated
19.9.2011 passed by the ld. CIT(A)-16, Mumbai and it relates to
assessment year 2007-08.
2. The appeal is barred by 47 days. The assessee has filed an
application praying for condoning the delay. We heard the parties on this
preliminary issue. Having regard to the submissions made in the
application, we condone the delay and admit the appeal for hearing.
2 ITA. No596/Mum/2012
3. The Solitary issue urged by the assessee relates to addition of
Rs.10,44,263/- relating to unutilized modvat credit.
4. We heard the parties and perused the record. The AO noticed that
the assessee has shown unutilized modvat credit of Rs.10,40,668/- in its
accounts, but did not offer the same as income. The AO took the view
that the same is to be assessed as income under clause (b) of Section
145A of the Income Tax Act, 1961 (the Act). Though the assessee
contended it has been following consistently a particular method for
accounting Cenvat consistently, the AO rejected the same by following the
decision of the Hon'ble Apex Court in the case of CIT V/s British Paints
(India) Ltd reported in 188 ITR 44(SC). The ld. CIT(A) also confirmed the
same. Aggrieved, the assessee filed this appeal before the Tribunal.
5. The ld. counsel for the assessee placed reliance before us on the
decision of Co-ordinate Bench of the Tribunal in the case of Hawkins
Cookers Ltd V/s Income Tax Officer (2008) 14 DTR (Mum) (Trib) 206,
wherein it has been held that the assessee has to ensure that there is no
double adjustment of modvat credit and accordingly the Tribunal had set
aside the matter to the file of the AO to verify the facts of the case and
delete the impugned addition if it is given effect to the provisions of
section 145A of the Act. The ld. counsel submitted that the method of
accounting followed by the assessee with regard to Cenvat is in 3 ITA. No596/Mum/2012
accordance with the provisions of section 145A of the Act. The ld.counsel
submitted that the assessee furnished detailed working before the tax
authorities, however, the same was not examined by them. Accordingly,
he prayed that the matte may be set aside to the file of the AO so that the
assessee could satisfy the AO that the method of accounting followed by
the assessee is in accordance with the provisions of section 145A of the
Act.
6. The ld. DR did not object to the plea put fort by the ld. AR.
7. Having regard to the submissions of ld. AR, we set aside the order
of ld. CIT(A) on this issue and restore the same to the file of the AO with a
direction to examine the working furnished by the assessee so as to satisfy
himself that the same complies with the provisions of section 145A of the
Act and thereafter decide the issue in accordance with the law, after
providing adequate opportunity of being heard to the assessee.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
The above order was pronounced in the open court on 13th Feb, 2015.
घोषणा खल ु े यायालय म* +दनांकः13th Feb, 2015 को क" गई ।
sd sd
(संजय गग /SANJAY GARG) ( बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER मुंबई Mumbai: 13th Feb,2015. व. न.स./ SRL , Sr. PS 4 ITA. No596/Mum/2012
आदे श क !त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु2त(अपील) / The CIT(A)- concerned
4. आयकर आयु2त / CIT concerned
5. 3वभागीय त न5ध, आयकर अपील&य अ5धकरण, मुंबई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील&य अ5धकरण, मुंबई /ITAT, Mumbai
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