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M/s. NR Jet Enterprises Ltd. 64-66 Senapati Bapat Marg Mahim, Mumbai400016 Vs. DCIT, Circle 7(1) Aayakar Bhavan, M.K. Road Mumbai 400020
March, 04th 2015
                         "B" Bench, Mumbai

               Before Shri D. Manmohan, Vice President
             and Shri Chandra Poojari, Accountant Member

                         ITA No. 6247/Mum/2010
                         (Assessment Year: 2007-08)

     M/s. NR Jet Enterprises Ltd.      DCIT, Circle 7(1)
     64-66 Senapati Bapat Marg     Vs. Aayakar Bhavan, M.K. Road
     Mahim, Mumbai400016               Mumbai 400020
                           PAN - AAACN5895K
              Appellant                        Respondent

                         ITA No. 8651/Mum/2011
                         (Assessment Year: 2008-09)

     M/s. NR Jet Enterprises Ltd.      Income Tax Officer 7(1)(1)
     64-66 Senapati Bapat Marg     Vs. Aayakar Bhavan, M.K. Road
     Mahim, Mumbai400016               Mumbai 400020
                           PAN - AAACN5895K
              Appellant                       Respondent

                   Appellant by:        Shri Kirit Kamdar &
                                        Shri Pranay Gandhi
                   Respondent by:       Shri V.K. Bora

                   Date of Hearing:       03.03.2015
                   Date of Pronouncement: 03.03.2015


Per D. Manmohan, V.P.

     These appeals of the assessee-company are directed against the orders
passed by the CIT(A) 13, Mumbai and they pertain to assessment years
2007-08 and 2008-09. Common issue is involved in both these appeals and
therefore they are taken up together.

2.    In A.Y. 2007-08 the only issue under consideration is as to whether
the CIT(A) erred in directing the DCIT to prepare the Profit & Loss Account of
the assessee by including the element of excise duty under section 145A of
the Act and accordingly make an addition to the total income. In the
alternative it was contended that if excise duty is included in the value of
                                     2            ITA No. 6247&8651/Mum/2010
                                                      M/s. NR Jet Enterprises Ltd.

closing stock similar adjustment has to be made to the opening stock also;
AO ought to have included the duty element in the purchases, sales and
closing stock. Without prejudice it was contended that making a separate
addition would amount to double addition.

3.    The AO as well as the CIT(A) followed the decision of the Hon'ble
Bombay High Court in the case of Melmould Corporation 202 ITR 789 while
coming to the conclusion that as per section 145A of the Act, inserted w.e.f.
01.04.1999, excise duty element has to be included while valuing closing
stock but there cannot be any adjustment to the opening stock.

4.    At the time of hearing the learned counsel for the assessee placed
before us a copy of the order passed by the ITAT `B' Bench, Mumbai in
assessee's own case for assessment years 2003-04 and 2004-05 (ITA Nos.
1357/Mum/2007 dated 22.12.2008 & ITA No. 118/Mum/2009 dated
25.03.2013) wherein identical issue was set aside to the file of the AO by
observing that adjustments under section 145A on account of any duty, tax,
etc. is required to be made at each stage, i.e. opening stock, purchases,
sales as well as closing stock. The learned counsel for the assessee also
submitted that identical issue was decided by the Hon'ble Bombay High
Court in the case of Mahalaxmi Glass Works (P) Ltd. 318 ITR 116.

5.    On the other hand, the learned D.R. strongly relied upon the orders
passed by the tax authorities.

6.    We have considered the rival submissions and carefully perused the
record. Consistent with the view taken by the ITAT in assessee's own case
for earlier years and also in the light of the decision of the Hon'ble Bombay
High Court (supra) we set aside the matter to the file of the AO to make
appropriate adjustments to the opening stock, etc. after obtaining relevant
information from the assessee in this regard.

7.    In respect of the appeal for A.Y. 2008-09 assessee, vide ground Nos. 3
& 4, contends that the learned CIT(A) erred in not directing the AO to allow
set off of brought forward losses. This is purely consequential in nature.
Since the main issue is set aside to the file of the AO in line with the view
                                         3            ITA No. 6247&8651/Mum/2010
                                                          M/s. NR Jet Enterprises Ltd.

taken by the Tribunal in assessee's own case for earlier years, we hereby set
aside this issue also to be reconsidered after giving effect to the directions
given by us with regard to ground Nos. 1 & 2.

8.        In the result, the appeals filed by the assessee are treated as allowed
for statistical purposes.

Order pronounced in the open court on 3rd March, 2015.

                   Sd/-                                     Sd/
             (Chandra Poojari)                        (D. Manmohan)
            Accountant Member                          Vice President

Mumbai, Dated: 3rd March, 2015

Copy to:

     1.   The   Appellant
     2.   The   Respondent
     3.   The   CIT(A) ­ 13, Mumbai
     4.   The   CIT­ 7, Mumbai City
     5.   The   DR, "B" Bench, ITAT, Mumbai

                                                        By Order

//True Copy//
                                                     Assistant Registrar
                                             ITAT, Mumbai Benches, Mumbai
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