DEPUTY COMMISSIONER OF INCOME TAX, Jaipur V. AGRIBIOTECH INDUSTRIES P. LIMITED, Jaipur

ITA 11/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1259 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: VED JAIN CA DHK
• Keywords: Business expenditure; Competent authority
• Section: 37(1); 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 11/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE DCIT, CIRCLE-4, JAIPUR. CUKE VS. M/S. AGRIBIOTECH INDUSTRIES P. LTD., SP-825, ROAD NO. 14, VKI AREA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AA FCA 1695 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VED JAIN (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.09.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10/09/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30 TH OCTOBER, 2017 OF LD. CIT (A)-2, JAIPUR FOR THE ASSESSMENT Y EAR 2011-12. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) IS JUSTIFIED IN DELETING THE DISALLOWANCES MADE U/S 37(1) OF THE ACT AMOUNTING TO RS. 3,14,24, 000/- ON ACCOUNT OF PENAL EXCISE DUTY DEBITED IN P & L ACCOU NT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) IS JUSTIFIED IN HOLDING THAT ALLEGED EXCISE DEMAND NOTICE ARE NOT PENAL IN NATURE WITHOUT APPRE CIATING THE FACT THAT THE SAME ARE FOR PENALTY DEMAND LEVIED BY THE EXCISE DEPARTMENT RAISED ON ACCOUNT OF FAKE EXPORT PERMIT. 3. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2 ITA NO. 11/JP/2018 M/S. AGRIBIOTECH INDUSTRIES P. LTD., JAIPUR. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND EN GAGED IN THE BUSINESS OF MANUFACTURING OF ENA, RECTIFIED SPIRIT, COUNTRY LIQ UOR AND IMFL. THE ASSESSEE FILED ITS RETURN OF INCOME ON 22 ND SEPTEMBER, 2011 THROUGH E-FILING DECLARING NIL INC OME. DURING THE SCRUTINY ASSESSMENT, THE AO NOTED THAT T HE ASSESSEE HAS CLAIMED A SUM OF RS. 3,14,24,000/- IN THE P & L ACCOUNT ON ACCOUN T OF STATE EXCISE DUTY. THE AO FURTHER NOTED THAT AS PER THE NOTES ON ACCOUNTS THE STATUTORY AUDITOR HAS COMMENTED THAT THE RAJASTHAN STATE EXCISE DEPARTMEN T HAS RAISED THE DEMAND OF RS. 1,14,24,000/- AND RS. 6,85,44,000/- VIDE THEIR LETTERS DATED 22 ND DECEMBER, 2010 AND 23 RD DECEMBER, 2010 RESPECTIVELY ON ACCOUNT OF NON-VERI FICATION OF SOME OF THE EXPORT PERMITS. THUS THE AO DISALLOWED THE S AID PAYMENT OF RS. 3,14,24,000/- AS PENALTY AGAINST INFRINGEMENT OF EXCISE LAW AND C ONSEQUENTLY DISALLOWED THE SAID AMOUNT BY APPLYING THE EXPLANATION-1 TO SECTION 37( 1) OF THE ACT. ON APPEAL, THE LD. CIT (A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY FO LLOWING THE EARLIER ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE. 3. WE HAVE THE LD. D/R AS WELL AS THE LD. A/R AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 31 ST JULY, 2017 IN ITA NO. 272/JP/2017. THE SAID DECISION OF THE TRIBUNAL WAS CHALLENGED BY THE REVE NUE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE HIGH COUR T VIDE JUDGMENT DATED 20 TH FEBRUARY, 2018 IN DB IT APPEAL NO. 8/2018 HAS HELD IN PARA 9 & 10 AS UNDER :- 3 ITA NO. 11/JP/2018 M/S. AGRIBIOTECH INDUSTRIES P. LTD., JAIPUR. 9. THE FINDING OF BOTH THE AUTHORITIES ARE CONCUR RENT IN NATURE. APART FROM PENAL EXPENSES WHICH HAS BEEN DONE FOR T HE BUSINESS ACTIVITY, WHILE CONSIDERING THE MATTER, CIT (A) HAS GONE INTO THE OBSERVATIONS MADE BY THE COMPETENT AUTHORITY AND HA S COME TO THE CONCLUSION THAT IT WAS NOT PENAL IN NATURE. 10. IN THAT VIEW OF THE MATTER EXPLANATION OF SECTI ON 37 WILL NOT COME INTO PLAY. IN THAT VIEW OF THE MATTER THAT WA S BUSINESS EXPENSES AND HAS BEEN RIGHTLY UPHELD BY BOTH THE AUTHORITIES . THUS IN VIEW OF THE EARLIER DECISION OF THIS TRIBUN AL AS WELL AS THE BINDING PRECEDENT OF HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIN D ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE TRIBUNAL QUA THIS ISSUE. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10/09/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 10/09/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CIRCLE-4, JAIPUR. 2. THE RESPONDENT M/S. AGRIBIOTECH INDUSTRIES PVT. LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 11/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 4 ITA NO. 11/JP/2018 M/S. AGRIBIOTECH INDUSTRIES P. LTD., JAIPUR.