TMI Blog2005 (6) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... d prejudicial to the interest of the Revenue. He, therefore, directed to revise the value of closing stock of raw material by enhancing it with Rs. 43,685. The assessee is aggrieved against this finding given by the learned CIT. It was contended by the learned Authorised Representative that the assessee was regularly following this method of accounting and as such, the opening stock was also valued in the same fashion excluding freight and octroi, etc. It was pointed out that similar action was taken under s. 263 by the learned CIT in the case of Metallizing Equipment Co., the appeal in respect of which, filed before the Tribunal in ITA No. 1/Ju/2001, came to be heard on 18th May, 2005. Since facts and circumstances of both the cases are similar, it was prayed that the view taken in that appeal be followed. The learned Departmental Representative fairly conceded the factual position and made concurring submissions. Having heard both the sides on this aspect, we find that the facts and circumstances for making this enhancement in the valuation of closing stock of raw material by freight/octroi, etc. are similar to that in the case of Metallizing Equipment Co. In this case, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted and not in the year to which the sales-tax pertained. By considering all these facts, the learned CIT came to the conclusion that the sales-tax deferred was not allowable as deduction within the meaning of s. 43B. Resultantly, the income was enhanced by an amount of Rs. 8,02,753 in asst. yr. 1996-97 and on the same pattern income was enhanced by Rs. 16,01,006 in asst. yr. 1997-98. 7. At the outset, the learned counsel for the assessee contended that the action of the learned CIT in enhancing of the income in both the years was erroneous as the Rajasthan Government has duly amended s. 7(2B) of the Rajasthan Sales-tax Act, 1954. He took us through the relevant pages of the paper book to show the necessary statutory incorporations. By referring to pp. 116 and 117 of the paper book, being eligibility certificate under New Deferment Scheme, 1989, it was shown that the assessee was made eligible to the sales-tax deferment Scheme w.e.f. 23rd Dec, 1992, which was valid upto 7 years or eligibility amount of Rs. 46,95,192, whichever is earlier. Further submissions were advanced to state that as a consequence of action under s. 263 proceedings were taken for earlier assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT vs. Gujarat Polycrete (P) Ltd. (2001) 165 CTR (SC) 402 : (2000) 246 ITR 463 (SC) on a reference made by the Department noted vide para 3 of its judgment that the provisions would apply only if a State Government has amended its Sales-tax Act to provide that the sales-tax deferred under Sales-tax Scheme would be treated as actually paid, so as to meet the requirements of s. 43B. It was held that a question of law arose from the order of the High Court. It is, therefore, apparent that when necessary amendment has been made in the Sales-tax Act or notification has been issued for allowing sales-tax deferment, the provisions of s. 43B would be held to be not attracted when the sales-tax is not paid but its accumulation is utilised and repayment is deferred. Page 57 of the paper book is a copy of s. 7 of the Rajasthan Sales-tax Act, 1954, whose sub-s. (2B) provides that where the State Government is of the opinion that it is necessary or expedient in the public interest, it may, by notification in the Official Gazette, defer the payment of tax payable by any class of dealers for any period on such conditions and under such circumstances as may be specified in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 43B. We find that the learned CIT was persuaded to make the disallowance primarily on the strength of the Notification dt. 27th March, 1995 (wrongly typed as 27th Sept., 1995), which provides that where deferment of sales-tax was granted to a dealer, the loan liability equal to any such tax payable by him or to be raised by RICCO/FCI or Industries Department, only then such tax shall be deemed to have been paid in the public interest. This finding has been given in the impugned order on the basis of second proviso to cl. (d) of point No. 4 of the Notification dt. 6th July, 1989, for the deferment of tax on sales. This clause, namely (d) is applied when the limit of tax to be deferred prescribed in Annex. C is reached. It is provided that the industrial unit shall then pay the deferred tax in 10 equal half yearly instalments without interest and first instalment shall be payable within a period of 30 days from the date of expiry of eligibility certificate of the benefits under the scheme or after the end of four years from the date of commencement of such benefit, whichever is later and subsequent instalments shall be payable at the interval of the period of six months. The se ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
