IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 8TH JUNE 2010 / 18TH JYAISTHA 1932 ITA.No. 99 of 2009() -------------------- ITA.319/COCH/2007 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ----------------------------- THE COMMISSIONER OF INCOME TAX.KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/RESPONDENT: --------------- M/S. WILLIAM GOODACRE AND SONS (INDIA) PVT. LTD., BEACH ROAD, ALAPPUZHA. ADV. SRI.V.RAMACHANDRAN (SR.) ADV. SRI.K.ANAND (A.201) FOR R SMT.LATHA KRISHNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 08/06/2010, THE COURT ON 08/06/2010 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T. Appeal No.99 of 2009 .................................................................... Dated this the 8th day of June, 2010. JUDGMENT Ramachandran Nair, J. The question raised in the appeal filed by the department is whether Tribunal was justified in cancelling addition towards difference in the opening stock and closing stock amounting to above Rs.80 lakhs. We have heard Senior Standing Counsel appearing for the appellant and Senior counsel Sri.V.Ramachandran appearing for the respondent. 2. Since the transaction was between the respondent and a subsidiary company of which respondent is a holding company and both being assessees in the same area, we directed the Assessing Officer to furnish the details of assessment pertaining to the subsidiary company. The Assessing Officer noticed that the difference in closing stock and opening stock of this company for the accounting year 2002- 2003 was above Rs.83 lakhs. However, the report of the Assessing Officer pertaining to the subsidiary company shows that the difference ITA 99/2009 2 in stock was treated as closing stock of the subsidiary company. This only means that the respondent has instead of accounting purchase on 1st April, 2002, accounted the stock as opening stock. It is seen that protective assessment is made on the same stock in the hands of the subsidiary company. Standing Counsel appearing for the appellant submitted that assessee is contesting in appeal the protective assessment of the subsidiary company before the Tribunal and they have raised a ground pertaining to the closing stock of that year. Counsel appearing for the assessee submitted that ground pertaining to the opening stock addition of the subsidiary company will not be contested by the assessee in that case. We, therefore, dismiss the appeal on specific condition that the assessee will not press the addition pertaining to the opening stock in the hands of the subsidiary company namely, M/s.Karinos Weave Private Ltd. However, assessee in that ITA 99/2009 3 case will be free to challenge the ground pertaining to gross profit addition. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms