BDG Metal and Power Ltd., Kolkata V. THE DCIT, CC-XXI, KOLKATA, Kolkata

ITA 1049/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4554 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-07-2015
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: A K TIBREWAL
• Keywords: Wrong claim
• Section: 43B; 143(3)

Judgement Text

I.T.A. NO. 1049/KOL./2015 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1049 /KOL/ 2015 ASSESSMENT YEAR: 2010-2011 BDG METAL AND POWER LIMITED,....................... ..................APPELLANT HMP HOUSE, 5 TH FLOOR, 4, FAIRLIE PLACE, KOLKATA-700 001 [PAN : AACCB 2298 Q] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ............RESPONDENT CENTRAL CIRCLE-XXI (NOW DCIT, CC-4(4), AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA-700 107 APPEARANCES BY: SHRI A.K. TIBREWAL, FCA, FOR THE ASSESSEE N O N E, FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 20, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 19, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKAT A DATED 15.05.2015 AND THE SOLITARY GROUND RAISED BY THE ASSESSEE IN T HE SAID APPEAL READS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES, THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE ADDITI ON OF AN AGGREGATE SUM OF RS.10,14,708/- IN RESPECT OF TH E VAT PAYMENT MADE TO THE SALES TAX DEPARTMENT ON ACCOUNT OF TAX ON ASSESSMENT MADE BY THE SALES TAX AUTHORIT IES ON THE ALLEGED GROUND THAT THE APPELLANT MAINTAINED SEPARATE VAT & CST ACCOUNTS AND ANY PAYMENT MADE SUBSEQUENTLY IS NOT ALLOWABLE AS DEDUCTION EVEN ON PAYMENT BASIS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL SEMIES, SILI CA MANGANESE AND HOT I.T.A. NO. 1049/KOL./2015 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 4 ROLLED PRODUCTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 23.09.2010 DECLARING TOTAL INCOM E AT NIL. THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) ON 30.12.2011. THE SAME, HOWEV ER, WAS SET ASIDE BY THE LD. CIT UNDER SECTION 263, INTER ALIA, ON THE I SSUE OF DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF INPUT VAT REVERSE A MOUNTING TO RS.10,14,708/-. ACCORDING TO THE LD. CIT, THE SAID DEDUCTION WAS NOT ADMISSIBLE SINCE THE VAT ACCOUNTS WERE MAINTAINED S EPARATELY AS PER THE NOTES ON ACCOUNTS. AS PER THE ORDER OF THE LD. CIT PASSED UNDER SECTION 263, A FRESH ASSESSMENT WAS MADE BY THE ASSESSING O FFICER VIDE HIS ORDER DATED 21.02.2014, WHEREIN HE DISALLOWED THE DEDUCTI ON CLAIMED BY THE ASSESSEE ON ACCOUNT OF INPUT VAT REVERSE AMOUNTIN G TO RS.10,14,708/-. AGAINST THE SAID ORDER OF THE ASSESSING OFFICER, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS), WHO CO NFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE OF ASSESSEES CLAIM FOR INPUT VAT REVERSE BY FOLLOWING HIS ORDE R PASSED IN ASSESSEES OWN CASE FOR A.Y. 2009-10, WHEREIN A SIMILAR ISSUE WAS DECIDED AGAINST THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT (APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT A SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THIS BENCH IN ASSESSEES OWN CASE FOR A.Y. 2009-10 AND THE SAME WAS DECIDED IN FAVOUR OF THE ASSESSEE VIDE AN ORDER DATED MARCH 09, 2016 PASSED IN ITA NO. 104 7/KOL/2015 FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 6:- 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESS EE, IT APPEARS THAT THE EXACT NATURE OF AMOUNT IN DISPUTE PAID BY THE ASSESSEE ON ACCOUNT OF REVERSAL OF VAT INPUTS H AS NOT BEEN APPRECIATED EITHER BY THE ASSESSING OFFICER OR BY THE LD. CIT(APPEALS) IN THE RIGHT PERSPECTIVE. THE INPU T TAX CREDIT ON ACCOUNT OF VAT PAID ON PURCHASES WAS ACTU ALLY CLAIMED BY THE ASSESSEE IN THE F.YS. 2006-07 AND 20 07-08 AND SINCE THE RELEVANT MATERIALS PURCHASED BY THE A SSESSEE I.T.A. NO. 1049/KOL./2015 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 4 WERE USED FOR MANUFACTURE OF GOODS, WHICH WERE TRANSFERRED TO ITS CONSIGNMENT AGENT WITHOUT CHARGI NG SALES TAX, THE ASSESSEE WAS NOT ENTITLED FOR THE IN PUT TAX CREDIT. SUCH CREDITS, HOWEVER, WERE WRONGLY CLAIMED BY THE ASSESSEE AGAINST CST/VAT PAYABLE FOR THE RELEVANT Y EARS AND ONLY AS A RESULT OF SHOW-CAUSE NOTICE ISSUED BY THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, THE CREDI T WRONGLY CLAIMED WAS REVERSED BY THE ASSESSEE AND TH E AMOUNT IN QUESTION WAS PAID AGAINST SUCH REVERSAL. THE SAID PAYMENT MADE BY THE ASSESSEE THUS WAS ON ACCOU NT OF CST/VAT ACTUALLY PAYABLE FOR THE F.YS. 2006-07 AND 2007- 08 AND THE SAME HAVING BEEN PAID IN THE YEAR UNDER CONSIDERATION. I AGREE WITH THE CONTENTION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE WAS ENTI TLED FOR DEDUCTION OF THE SAME IN THE YEAR UNDER CONSIDERATI ON AS PER SECTION 43B OF THE ACT. THE METHOD OF ACCOUNTIN G FOLLOWED BY THE ASSESSEE TO MAINTAIN A SEPARATE VAT ACCOUNT TO MAKE ALL CREDIT AND DEBIT ENTRIES RELATI NG TO VAT THEREIN IS NOT RELEVANT TO DECIDE THE ALLOWABIL ITY OF THE AMOUNT IN QUESTION PAID BY THE ASSESSEE ON ACCO UNT OF REVERSAL OF INPUT VAT CREDIT, INASMUCH AS THE WRONG CLAIM OF CREDIT FOR INPUTS IN THE EARLIER YEARS HAD RESUL TED IN SHORT PAYMENT OF CST/VAT PAYABLE BY THE ASSESSEE AN D THE SAME HAVING BEEN PAID DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE, IN MY OPINION, WAS ENT ITLED FOR DEDUCTION OF SUCH TAX ON PAYMENT BASIS UNDER SECTIO N 43B. I, THEREFORE, DELETE THE ADDITION MADE BY THE ASSES SING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON TH IS ISSUE AND ALLOW THIS APPEAL OF THE ASSESSEE. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATI ON AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO A.Y. 2009-10, I RESPECTFULLY FOLLOW THE DECISION DATED 09.03.2016 RENDERED BY TH E TRIBUNAL IN A.Y. 2009-10 AND DELETE THE ADDITION MADE BY THE ASSESSI NG OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) BY WAY OF DISALLO WANCE OF ASSESSEES CLAIM FOR DEDUCTION ON ACCOUNT OF INPUT VAT REVERS E. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 19, 20 16. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 19 TH DAY OF AUGUST, 2016 I.T.A. NO. 1049/KOL./2015 ASSESSMENT YEAR: 2010-2011 PAGE 4 OF 4 COPIES TO : (1) M/S. BDG METAL AND POWER LIMITED, HMP HOUSE, 5 TH FLOOR, 4, FAIRLIE PLACE, KOLKATA-700 001 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XXI (NOW DCIT, CC-4(4), AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA-700 107 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKA TA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.