TMI Blog2015 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... r market price whichever is lower and therefore, assessee has valued his stock at cost price which is also supported by the auditors report and therefore, this addition of ₹ 41,51,301/- has been rightly dealt by both the authorities under the Income Tax Act namely, Commissioner of Income Tax (Appeals) and ITAT. The documents which are exhibited A/JJ/6 contains the balance sheet, trading and profit and loss account, inventory of stock and valuation of stock for the period 01.04.2001 to 25.09.2001 showing net profit of the assessee at ₹ 41,81,301/- In fact, this is an error committed by Assessing Officer without appreciating the fact that what is the basic principles of valuation of the closing stock. No illegality has been committed by both the authorities below and hence, this appeal may not be entertained by this Court. - Decided against revenue. - Tax Appeal No. 53 of 2006 - - - Dated:- 13-7-2015 - D. N. Patel And Ratnakar Bhengra, JJ. For the Appellant : Mr Deepak Roshan, Adv. For the Respondent : Mr Nitin Kumar Pasari, Adv. and Mrs Ranjana Mukherjee, Adv. JUDGMENT Per D. N. Patel, J. 1. This Tax Appeal has been preferred against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-03 on the basis of seized documents marked as A/JJ/6 which II-AT has overlooked or ignored. Counsel for the appellant submitted that search and seizure operation under Section 132 of the Income Tax Act,1961 was conducted on 26th September, 2001 at various premises of the respondent. Thereafter, application was preferred by Sri Prem Prakash Arya, who is main partner of M/s Jever Jewellers, Bangalore, under Section 245C of the Income Tax Act before the Settlement Commission. Settlement Commission took sometimes meanwhile Assessing Officer passed an order dated 23rd October,2003 and two major additions were made which is at ₹ 22,84,923/- on the basis of physical verification of the stock firm and the book value and the 2nd major addition was ₹ 41,51,301/- on the basis of the seized documents which ITAT has ignored. Appeal was preferred by the respondent before Commissioner of Income Tax (Appeals), who passed an order dated 15th July, 2004 in favour of the respondent and therefore, appellant preferred Appeal before the ITAT which was dismissed vide order dated 23rd June,2006 and therefore, this Tax Appeal has been preferred with the aforesaid substantial questions of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law involved in this Tax Appeal. (b) (2004) 189 CTR (Del) 103 (Para 26, 30, 32 to 36). On the point that the order passed by the Settlement Commission may not be interfered with, except in exceptional cases. (c) (2010) 8 SCC 739 (Para 27, 35 and 37). This judgment has been relied upon by the respondent mainly for the reason that once true, correct and legal procedure has been followed before the Settlement Commission, the order passed by the Settlement Commission may not be called in question nor it can be reopened by the Court. (d) (1999) 8 SCC 338 (Para 24, 25 and 26). This judgment has been relied upon to point out the methodology of following of closing stock and the principle propounded by the Hon'ble Supreme Court as stated in para 26 On the basis of the aforesaid submissions, it is submitted by the counsel for the respondent that this appeal may not be entertained by this Court. Reasons: 5. Having heard counsels for both the sides and looking to the facts and circumstances of the case, we see no reason to entertain this Tax Appeal mainly on the following facts and reasons: (i) Search was carried out under Section 132 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Arya before the Settlement Commission under Section 245C of the ITAT Act, which is true and full disclosure, has been accepted by the Settlement Commission while passing order under Sub Section 4 of Section 245D of the Act, 1961. The disclosure made by Mr. P.P. Arya of his income which is aggregating at ₹ 81,18,770/- includes two components of income which is at ₹ 21,42,460/- and ₹ 59,76,313/-. This has been accepted by the Settlement Commission. He has accepted all his liabilities except of Jever Jewellery situated at Ranchi. The order passed by the Settlement Commission cannot be called in question at this stage as has been held by Hon'ble Supreme Court in Ajmera Housing Corporation Another Vs. Commissioner of Income Tax reported in (2010) 8 SCC 739. Para 27, 35 and 37 thereof read as under: 27. It is clear that disclosure of full and true particulars of undisclosed income and the manner in which such income had been derived are the prerequisites for a valid application under Section 245C(1) of the Act. Additionally, the amount of income tax payable on such undisclosed income is to be computed and mentioned in the application. It needs little e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR (Del) 103. Para 26, 30, 32 to 36 thereof read as under: 26. In view of the apex Court decision in the case of Anjum M.H. Ghaswala Ors. (Supra) that the order made by the Settlement Commission under Section 245-I of the Act is conclusive and final, Therefore, the same cannot be reopened in any proceedings under the Act or any other law. Section 154 could not have been invoked as Settlement Commission ceases to be an authority under the Act after the order is made and can exercise such power only if authorised under the Act and under the chapter only. 30. In the case of CIT v. Express Newspapers Ltd. MANU/SC/0314/1994: [1994] 206 ITR 443 (SC), the effect of the order under Section 245D(4) is indicated. It was held: Sub-section (4) of Section 245D provides for passing of final orders by the Commission. It is not necessary to refer to the other provisions in the chapter except to mention that the Commission is empowered to direct the waiver of penalty as well as interest and to direct that the tax payable shall be paid in prescribed installments. It is further empowered to direct that the assessed whose case has been decided by it shall not be proceeded with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the decision and they refrained from challenging the order made by the Settlement Commission and after reasonable period having expired, one would be preluded from touching the order as it has become final and conclusive. As pointed out by the apex Court in Express Newspapers Ltd.'s case (supra), such an order could be challenged before the constitutional forum only. The decision rendered by a competent forum having jurisdiction to decide the disputes, its efficacy would not be impaired unless the same is challenged and the order is annulled, modified, reversed, etc. 35. When the Act provides that the order shall be final and conclusive, the final judgment or the final decision of the Settlement Commission does not loose its force and as such, because in a different case subsequently a view is taken indicating that the view expressed are wrong. A final decision, however wrong, is still final and its binding force does not depend upon its correctness. 36. There must be an end of litigation. The Settlement Commission is provided under the IT Act for the said purpose. Where the terms are settled and after having accepted the same merely because in some other decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of his trade, his own method of keeping accounts, and for that purpose, to value stock-in-trade either at cost or market price. (3) A method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the departmental authorities on the view that he should have adopted a different method of keeping accounts or of valuation. (4) The concept of real income is certainly applicable in judging whether there has been income or not, but, in every case, it must be applied with care and within their recognised limits. (5) Whether the income has really accrued or arisen to the assessee must be judged in the light of the reality of the situation. (6) Under Section 145 of the Act, in a case where accounts are correct and complete but the method employed is such that in the opinion of the Income Tax Officer, the income cannot be properly deduced therefrom, the computation shall be made in such manner and on such basis as the Income Tax Officer may determine. 25. In the present case, the High Court has disallowed the claim of the appellant after holding thus: (a) The entries made by the assessee in its books of account is not d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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