SHRI BILAL IDRIS MUNSHI, Nagpur V. I.T.O. WARD -2, Akola

ITA 101/NAG/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8106 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VITTHAL BHOSALE
• Keywords: Revenue expenditure

Judgement Text

आयकर अपीलीय अिधकरण ᭠यायपीठ, नागपुर मᱶ । IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (At e-Court, PUNE) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM आयकर अपील सं. / ITA No.101/NAG/2017 िनधाᭅरण वषᭅ / Assessment Year : 2009-10 Bilal Idris Munshi, C/o CA, Mukesh Agrawal, R.S. Bhattad & Associates, 33-A, Central Bazar Road, Ramdaspeth, Nagpur- 440010. PAN : ACDPM2501R .......अपीलाथᱮ / Appellant बनाम / V/s. ITO, Ward- 2, Akola. ......ᮧ᭜यथᱮ / Respondent Assessee by : Shri Mukesh Agrawal Revenue by : Shri Vitthal Bhosale सुनवाई कᳱ तारीख / Date of Hearing : 12.11.2021 घोषणा कᳱ तारीख / Date of Pronouncement : 18.11.2021 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-1, Nagpur (‘CIT(A)’ for short) dated 26.12.2016 for the assessment year 2009-10. 2. Briefly, the facts of the case are that the appellant is an individual engaged in the business of refining of edible oil and soap. The return of income for the assessment year 2009-10 was filed on 29.09.2009 declaring total income of Rs.4,61,460/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward- 2, Akola (‘the Assessing Officer’) vide order dated 23.12.2011 at a total income of Rs.12,77,117/-. While doing so, the Assessing Officer disallowed the claim for deduction of Maharashtra Value Added Tax 2 ITA No.101/NAG/2017 (‘MVAT’) receivable of Rs.8,14,267/- written off in the Profit & Loss Account. It is stated that the appellant has been following the accounting policy, accounting purchases & sales by excluding MVAT and the same was shown as receivable as part of current asset in the Balance Sheet. It is further stated that the appellant is entitled to set off brought forward MVAT against the current year MVAT liability. However, the same was written off in the books of account and claimed as deduction. Even on appeal before the ld. CIT(A), the same was confirmed. 3. Being aggrieved, the assessee is in appeal before us in the present appeal. 4. The ld. AR submits that MVAT was not allowed by the Sales Tax Authority, hence, the same was written off in the books of account of current year, therefore, should be allowed as deduction placing reliance on the decision of the Hon’ble Madras High Court in the case of PCIT vs. M/s. Kaleesuwari Refinery Pvt. Ltd., Tax Case Appeal No.282 of 2018 dated 08.03.2021. 5. On the other hand, ld. Sr. DR placed reliance on the orders of the lower authorities. 6. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the allowability of unrealizable MVAT credit as a deduction. Undoubtedly, this item is revenue in nature and non-realization of credit results in loss, which is an allowable deduction. But the fact of crystallization of liability needs to be proved. There is no material on record to demonstrate the crystallization of liability during the year under consideration. In the 3 ITA No.101/NAG/2017 circumstances, we remand the matter back to the file of the Assessing Officer to examine the crystallization of liability during the year under consideration and after satisfying himself the same be allowed as revenue expenditure. Thus, the ground of appeal raised by the assessee stands partly allowed for statistical purposes. 7. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced on this 18 th day of November, 2021. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) ᭠याियक सद᭭य/JUDICIAL MEMBER लेखा सद᭭य/ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 18 th November, 2021. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. 4. 5 6. The CIT(A)-1, Nagpur. The Pr. CIT-1, Nagpur. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, नागपुर / DR, ITAT, “Nagpur” Pune; गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER // True Copy // वᳯर᳧ िनजी सिचव / Sr. Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune.