Ita/166/2011 Of Commissioner Of Income Tax,Kottayam v. M/S.mas Enterprises (P) Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 12TH DAY OF DECEMBER 2011/21ST AGRAHAYANA 1933 ITA.No. 166 of 2011 ( ) =======================AGAINST ORDER DATED 19/04/2011 IN ITA.1001/2008 of I.T.A.TRIBUNAL,COCHINBENCH APPELLANT(S)/APPELLANT ====================== 1 THE COMMISSIONER OF INCOME TAX KOTTAYAM. BY ADV.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S) / RESPONDENT ============= 1 M/S.MAS ENTERPRISES (P) LTD. KERALAPURAM BUILDINGS SREENIVASA AIYYAR ROAD KOTTAYAM-686 001. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON12-12-2011 , ALONG WITH ITA NOS.167 & 177/2011 THE COURT ON THE SAME DAYDELIVERED THE FOLLOWING: ITA NO.166/2011 APPENDIX APPELLANT'S EXHIBITS ANNEXURE-A :COPY OF ORDER UNDER SECTION 143(3)/147 OF THE ASSESSINGOFFICER DATED 24/12/2007. ANNEXURE-B :COPY OF ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) DATED 27/08/2008. ANNEXURE-C :COPY OF ORDER OF THE APPELLATE TRIBUNAL DATED19/04/2011. //TRUE COPY// jg PA TO JUDGE. C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. ....................................................................I.T.A.Nos.166, 167 & 177 of 2011 .................................................................... Dated this the 12[th] day of December, 2011. J U D G M E N T Ramachandran Nair, J. Heard learned Senior counsel appearing for the appellant-Revenue in the connected cases filed against thevery same assessee, and we have also gone through the ordersof the Tribunal. 2.After hearing the learned Senior counsel for theRevenue and on going through the Tribunal's orders, we donot find any substantial question of low arising in any of theappeals filed for the assessment years from 2002-03 to 2004-05. The first question raised in the appeal filed for the year2002-03 is whether Rule 7 of the Income Tax Rules isapplicable for assessing income on cardamom. The finding ofthe Tribunal is that income from cardamom is 100%agricultural. We do not find any justification to take adifferent view because the only processing done by the planter I.T.A.Nos.166, 167 & 177/2011 is curing, which is essentially drying of raw & maturedcardamom plucked from plants, and the product sold is driedcardamom. Admittedly income assessed is not from valueadded products of cardamom like cardamom oil or any otherproducts. On the other hand, the dispute is on the incomefrom sale of dried cardamom, which is 100% agriculturalproduce as no manufacturing activity is involved in the curingand processing which is drying. So much so, we are of theview that the Tribunal rightly declined to interfere with thefirst appellate authority's orders directing assessment afterexcluding 100% agricultural income from cardamom. 3.So far as the appeal filed for the year 2003-04 isconcerned, the question raised is only on closing stockvaluation. The finding of the Tribunal is that the assessee hasbeen following consistent method of valuation of closingstock, which is the net realisable value. Further finding is thatfrom 1980-81 onwards the assessee was following samemethod of closing stock valuation, and for the first time i.e. in I.T.A.Nos.166, 167 & 177/2011 the year 2003-04, the Department deviated from the same.We do not find any substantial question of law arising from thefindings of the Tribunal on this issue that there is nojustification to deviate from the consistent method ofvaluation adopted by the assessee and accepted by theDepartment in the assessments for several preceding years. I.T.A.Nos.166, 167 & 177/2011 the year 2003-04, the Department deviated from the same.We do not find any substantial question of law arising from thefindings of the Tribunal on this issue that there is nojustification to deviate from the consistent method ofvaluation adopted by the assessee and accepted by theDepartment in the assessments for several preceding years. So far as the appeal filed for the year 2004-05 isconcerned, the issue raised is only on the estimation ofincome after rejection of books of accounts of the assessee inrespect of income from cardamom. The finding of theTribunal is that the assessee has maintained complete booksof accounts and the assessee is accountable to service tax,cess, and also to agricultural income tax and sales tax forpayment of tax on cardamom. When the first appellateauthority and the Tribunal accepted the books of accounts, wedo not think there is any justification for us to deviate fromthe view taken by the first appellate authority and the Tribunalfor the reason that the assessee had not maintained proper books of accounts. Consequently, we do not find any question of law arising in the three appeals filed by the Revenue againstthe very same assessee. Consequently, we dismiss these departmental appeals. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg