TaxTMI 
TaxTMI 
2017 (11) TMI 1557
X X X X Extracts X X X X
X X X X Extracts X X X X
.... hereunder. 02- The present appeal along with three connected appeals has been filed against consolidated order dated 20/06/2016 passed by the Income Tax Appellate Tribunal, Indore in I.T.A.No.547, 548 and 738/Ind/2014 (Revenue's appeal) for assessment 2005-06, 2008-09 and 2009-10. Though four different appeals have been filed but a common substantial question of law is being sought to be raised in all the appeals. 03- The brief facts of case reveal that the assessee is a private limited Company engaged in manufacture and sale of various types of Tyres used in automobile vehicles having its factory in the State of Madhya Pradesh at Pithampur Distt. Dhar. The assessee's assessment in the respect of assessment year in consideration ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt can be made merely to closing stock because unless the opening stock is also adjusted on the same basis, adjustment merely in the value of closing stock will distort the profit . 07- The assessee submits that the Income Tax Appellate Tribunal vide its detailed and well considered order has come to the conclusion that the provisions of section 145A have overriding effect on section 145 but as per the said provisions, the method of valuation and the provision regarding adjustment of taxes will be applicable not only to the closing stock but on inventory i.e opening and closing stock as well as both on purchases and sale . 08- On the basis of such conclusion the Income Tax Appellate Tribunal had held that the AO was not justified in a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....late Tribunal. 12- The relevant directions of the Income Tax Appellate Tribunal along with detailed discussion on the issue are found in Para 5 (internal page 12 to 14 of the ITAT's order) and the same reads as under:- "5. We have heard the rival contentions of both the parties. The assessee's contention that regarding addition of value of closing stock in respect of excise duty, the excise component in closing stock of raw materials and spares in accordance with closing stock by invoking the provisions of Section 145A of the Act by observing that such provisions require that closing stock has been worked out in accordance with the method of accounting regularly employed by the assessee and further adjusted to include the am....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... held as under:- "In the present case, there is no question of any double benefit being given to the assessee. Para 23.13 of the Guidance Note itself makes it clear that whenever any adjustment is made in the valuation of Inventory, this will affect both the opening as well as the closing stock. It is also to be noted that if any adjustment is required to be made by a statute (as for example Section 145A), effect to the same should be given irrespective of any consequences on the computation of income for tax purposes. Sec. 145A begins with a non obstante clause, and therefore, to give effect to Section 145A, if there is a change in the closing stock as on 31st March, 1999, there must necessarily be a corresponding adjustment made ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ck both and even on purchases and sales. 15- Thus, since the Income Tax Appellate Tribunal has already upheld applicability of section 145A, the substantial questions sought to be posed by revenue becomes purely academic. In fact revenue cannot be said to be aggrieved by order of Income Tax Appellate Tribunal. As to the direction of Income Tax Appellate Tribunal regarding re-computation of income after adjusting the values of opening stock, purchases, sales and closing stock, such direction is supported not only by language of the section 145A itself but even by circular issued by CBDT being Circular No 772 dated 23/12/1998, explaining the provisions of Finance (No.2) Act, 1998, which introduced provisions of section 145A. 16- The rel....