IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 12TH DAY OF DECEMBER 2011/21ST AGRAHAYANA 1933 ITA.No. 166 of 2011 ( ) ======================= AGAINST ORDER DATED 19/04/2011 IN ITA.1001/2008 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT(S)/APPELLANT ====================== 1 THE COMMISSIONER OF INCOME TAX KOTTAYAM. BY ADV.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S) / RESPONDENT ============= 1 M/S.MAS ENTERPRISES (P) LTD. KERALAPURAM BUILDINGS SREENIVASA AIYYAR ROAD KOTTAYAM-686 001. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 12-12-2011 , ALONG WITH ITA NOS.167 & 177/2011 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO.166/2011 APPENDIX APPELLANT'S EXHIBITS ANNEXURE-A : COPY OF ORDER UNDER SECTION 143(3)/147 OF THE ASSESSING OFFICER DATED 24/12/2007. ANNEXURE-B : COPY OF ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 27/08/2008. ANNEXURE-C : COPY OF ORDER OF THE APPELLATE TRIBUNAL DATED 19/04/2011. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. .................................................................... I.T.A.Nos.166, 167 & 177 of 2011 .................................................................... Dated this the 12th day of December, 2011. J U D G M E N T Ramachandran Nair, J. Heard learned Senior counsel appearing for the appellant-Revenue in the connected cases filed against the very same assessee, and we have also gone through the orders of the Tribunal. 2. After hearing the learned Senior counsel for the Revenue and on going through the Tribunal's orders, we do not find any substantial question of low arising in any of the appeals filed for the assessment years from 2002-03 to 2004- 05. The first question raised in the appeal filed for the year 2002-03 is whether Rule 7 of the Income Tax Rules is applicable for assessing income on cardamom. The finding of the Tribunal is that income from cardamom is 100% agricultural. We do not find any justification to take a different view because the only processing done by the planter I.T.A.Nos.166, 167 & 177/2011 2 is curing, which is essentially drying of raw & matured cardamom plucked from plants, and the product sold is dried cardamom. Admittedly income assessed is not from value added products of cardamom like cardamom oil or any other products. On the other hand, the dispute is on the income from sale of dried cardamom, which is 100% agricultural produce as no manufacturing activity is involved in the curing and processing which is drying. So much so, we are of the view that the Tribunal rightly declined to interfere with the first appellate authority's orders directing assessment after excluding 100% agricultural income from cardamom. 3. So far as the appeal filed for the year 2003-04 is concerned, the question raised is only on closing stock valuation. The finding of the Tribunal is that the assessee has been following consistent method of valuation of closing stock, which is the net realisable value. Further finding is that from 1980-81 onwards the assessee was following same method of closing stock valuation, and for the first time i.e. in I.T.A.Nos.166, 167 & 177/2011 3 the year 2003-04, the Department deviated from the same. We do not find any substantial question of law arising from the findings of the Tribunal on this issue that there is no justification to deviate from the consistent method of valuation adopted by the assessee and accepted by the Department in the assessments for several preceding years. So far as the appeal filed for the year 2004-05 is concerned, the issue raised is only on the estimation of income after rejection of books of accounts of the assessee in respect of income from cardamom. The finding of the Tribunal is that the assessee has maintained complete books of accounts and the assessee is accountable to service tax, cess, and also to agricultural income tax and sales tax for payment of tax on cardamom. When the first appellate authority and the Tribunal accepted the books of accounts, we do not think there is any justification for us to deviate from the view taken by the first appellate authority and the Tribunal for the reason that the assessee had not maintained proper I.T.A.Nos.166, 167 & 177/2011 4 books of accounts. Consequently, we do not find any question of law arising in the three appeals filed by the Revenue against the very same assessee. Consequently, we dismiss these departmental appeals. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg