The Commr Of Income Tax vs M/S Rama Engineering Works on 19 August, 2008

IN THE HIGH COURT 6? KARNATRKA A? BANGALORE

DATED @813 THE 1?" DAY OF §u@us?, 2c§8j, «

THE EQN'BLE MR. JUSTZCE n.L. Mgyxufigfaj

INCGME TAX APPEAL Fo.%§ @?'2@Q4 f

BETWEEN:

1.

The Commifisignér Qf Efi§ome¥§ax}
C_R_B,&i3_di:ngf:::;._,..V ._ 2 ‘ A ,
Queens Rda€;:=~’

Bangaio:e.5

2. The %ssi3tahtWCbmmi$Sicfier sf Incomewfax,
Circfie @123, ‘ ‘ “- ~
C.R’Building{*
Queens Rtadg. _
aagga:ore~:fi_”‘ … %??ELLfiNTfS

a¢By Srf :Mlvfseghachaia, Adv.§

Afigf-4

[T –Mf3. Ramé Efigineering ficrks,

?

_ ‘inauatrial Town,
‘, Rajgjigagar,
_TBangaiore~1O. … RESPGNBENTXS

f

*1By Sri. K.A.Hemraj, Adv.}

Jr-ir*§r’

This ETA is filed ufflec. 260% of the Inceme ?ax
Act, 1§éi, arising Qut flf Grder dated 2?.8.2*G3

é. The Rppeilate fiommissiangr after hearing

the parties noticefi that the giant

were dispatchad. by ita manufacture:T on=13Z§53:l§§6.

frsm Qssna. Actually,

deiivered te the afisesaee in; the inéxt .ésséS5ment

:néry*were*

yea: and therefor@, the inglusieh of ih§ yalQe cf

the plant and machinery amdgnting to RSL3,é1,659mGG

has to be deletedgV, Simiia;1§;. the Appeliate
Commissianer was also o@in@é that 155 asséasee being

a smail scaie’in¢usfirialfunit and the stock %@ing

wmverned bf EzCiééfRulé$ and fiere in the warehouse,

it wag possible §¢:_thé asséésee ta Show the value

of the £lo3ifig.stG;% 55: th@ purpose of banking and

disclosing the”le$ser’&mGumt in ihe xeturn sf incame

“wfiie§5befcre tfiémfissessin Officer. The Awmeilate

‘T£cmmissi§§er_é:cepted the explanation offered by the

aasesaee that it being a smaii scaie unit, is unabie

–te maintaifi an Aecoumtani by paying huge aalary and

‘the: entir@ stock in trade was in the warehouse

– d?er§éd bv the Excise Ruie. The Tribunai after
_&_ 1

3

“haaring tha garties mas concuzreé with the findifig

“cf tha f§§ei1ate Commisgianer. Accmréifigly, thé

appeal was dismissed. Being aggr;9ve& by the

coacarreat finding, the present apgaai i3 filed.

m°>/

5

5. fie have heard the learned ceeneei fer the

parties.

6. It is not the case ef the zevefihefathatg

actuaiiy the plant enfi machinegy were deiieefied tefl

the essessee en 31.03.1996 at Bangaiof } “?t ;e’the

specific case of the revenue “thet the” 9;ent ape’

machinery were dispatebedueeJ3§.Qfi;1§§§ ftem 90333
and the eame is re§eire&tN§@et?%r.geiifietee te the
assessee at Bangalore.” fifieeefeeege it is not the
Ceetention efwt§§.ge%eeee’thetfQfi the same day, the
giant and meehieetfi teeefiee the asse3see’s premisee.

But, what _iet;cQfitendefi_ before us by’ the learned
counsel ‘feré the ‘eepax:meh: is that the piant and

machi§ery’ were’ under vtrensit and it was fer the

‘aSse3§eexte refleéi in the book of account. It is

*ne= eéubt “tine” that the eeseesee has met done it.

Merely becefisé it has act been done is met a ground

fto eeseee the vaiue of the goeds received by the

uaeeessee efiter 3E.G3.1§96 as an income. Therefore,

– we have to answer substantial question of iaw Ne.E

u egeiast the revenue. Se far as sebstentiel question

“of law No.2 33 concerned, both [the Appellate

Commissioner as well ee the iwibunel have given a

Pr

categorical finding that the stock available_ with

th@ assessee were in the warehouse and govarfiefi by

the Excise Rxles and ii; is also expressed Ekfwbéth,

the parties that it was always QOSSib:§»’fQl che=

assessee to shew the value Of Ehe Stdck in trade

based on the actual realizabié va’A

department and refiected v§ifi§ of tfie fitécfi in trade
for the purpose of 5§mk1g§: rf¥%faforé; wé have to
answer substantial qué$t§QfifgfV1§Q §§;3 alao against

the revenue.

Same is flismi3Se£,g

sa/-»
Judge

Sd/-

Judge

for EEQC