M/S Kishan Chand & Co. Oil Inds. Ltd v. The Commissioner Of Income Tax (Central), Ludhiana

ITR-224 to 227 of 1995 IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH. 359 ITR No. 224 of 1995)Date of Decision : 24.07.2019 M/s Kishan Chand & Co. Oil Inds. Ltd. ... Appellant Versus The Commissioner of Income Tax (Central), Ludhiana, (2) ...RespondentITR No. 225 of 1995 M/s Kishan Chand & Co. Oil Inds. Ltd. ... Appellant Versus The Commissioner of Income Tax (Central), Ludhiana, ...Respondent(GBITR No. 226 of 1995 The Commissioner of Income Tax (Central), Ludhiana. © ... Appellant Versus M/s Kishan Chand & Co. Oil Inds. Ltd. (4) ..RespondentITR No. 227 of 1995 The Commissioner of Income Tax (Central), Ludhiana ... Appellant Versus M/s Kishan Chand & Co. Oil Inds. Ltd. ...Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE HARNARESH SINGH GILL Present:Mr. Akshay Bhan, Senior Advocate withMr. Alok Mittal, Advocate for the appellantin ITR No. 224 and 225 of 1995 andMr. Alok Mittal, Advocate for the appellantin ITR No. 224 and 225 of 1995 and for the respondents in ITR No. 226 and 227 of 1995. Mr. Rajesh Katoch, Senior Standing counsel withMs. Pridhi Jaswinder Sandhu, Junior Standing Counselfor the Income Tax Department in ITR No. 224 and 225 of 1995and for the appellants in ITR No. 226 and 227 of 1995. AJAY TEWARI, J (ORAL) ITR No. 226 of 1995 Learned counsel for the revenue has very fairly stated that noquestion of law arises in the present reference and the same be dismissed asintructuous. 2 Ordered accordingly. 3,The present ITR is dismissed as infructuous, ITR No. 227 of 1995 4Learned counsel for the appellant prays for permission towithdraw the present reference in view of circular No. 3/2018 as the taxableamount is less than Rs.50 Lakh| 5Allowed as prayed for, onDismissed as withdrawn. ITR No. 224 and 225 of 1995 vaThis order shall disposed of ITR Nos. 224 and 225 of 1995. Thequestions are identical and for facility of reference, the facts are taken fromITR No. 225 of 1995. In the said case, tollowing questions of law arises:- "TIWhether on the facts and in the circumstances of thecase, the Tribunal is right in upholding the addition ofRs.88,479/- on account of alleged suppression of the value ofclosing stock and the said addition is legally sustainable in view of the constantly followed and accepted method ofaccounting to value the closing stock in the past? 2 Whether on the facts and in the circumstances of thecase, the Tribunal is right in sustaining the addition ofRs.88,556/- made on account of accrual of interest on FDRs inthe bank especially when the assessee has been consistentlyfollowing the cash system of accounting for the receipt ofinterest?" 8.Learned counsel for the appellant admit that question No.1 iscovered against the assessee by the decision in ITR No. 139 of 1999(Assessment Year 1985-86) titled 'The Commissioner of Income Tax (Central), Ludhiana Versus M/s Kishan Chand & Co. Oil Inds. Ltd.’,decided on 07.12.2011 and the present reference is decided in terms of ITRNo. 139 of 1999. Ordered accordingly. Diposed of in same terms.Q The only question remains is whether claim for refund/interest onFDR would be part of the income of the assessee in the year of theirapproval or in the year of their actual received? 10.The primary contention of the counsel for the assessee is that inany case the conclusion of these references would be revenue neutralbecause during the pendency of the matter before the Tribunal the tax stoodpaid. 11.Counsel for the respondent states that though he is not doubtingthe correctness of the statement, he is not in a position to corroborate iteither. He, however, argues that on principle the decision of the Tribunal iscorrect and the amount in question have to be taken to be included in theincome of the year of their approval and not in the year of their actualreceipt. As per him, if the assessee has paid the tax, it would be subject toadjustment. The Tribunal noticed that the assessee had been using the 10.The primary contention of the counsel for the assessee is that inany case the conclusion of these references would be revenue neutralbecause during the pendency of the matter before the Tribunal the tax stoodpaid. 11.Counsel for the respondent states that though he is not doubtingthe correctness of the statement, he is not in a position to corroborate iteither. He, however, argues that on principle the decision of the Tribunal iscorrect and the amount in question have to be taken to be included in theincome of the year of their approval and not in the year of their actualreceipt. As per him, if the assessee has paid the tax, it would be subject toadjustment. The Tribunal noticed that the assessee had been using the ITR-224 to 227 of 1995 approval system as a practice but had resorted to the cash system randomlyand came to the conclusion that this could not be permissible. 12)We have no hesitation in accepting this exposition of law andconsequently uphold the findings of the Tribunal and decide the referenceaccordingly, with the caveat made by the counsel regarding payment of taxin subsequent years and its exigibility to adjustment. 13.Disposed of in above terms.14.Since the main case is decided pending CM, if any, standsdisposed of, (AJAY TEWARI )JUDGE 24.07.2019pooja saini ( HARNARESH SINGH GILL )JUDGE Whether speaking/reasoned? Whether reportable? Yes/NoYes/No