M/S. Supreme Sulfonators Pvt. Ltd., Kolkata V. ACIT, Circle-9, Kolkata, Kolkata

ITA 119/KOL/2015

• Counselvise Citation: 11923514 RSA 2015
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SOUMITR A CHOUDHURY
• Keywords: Condonation of delay

Judgement Text

I.T.A. NO . 119 / KOL ./201 5 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER I.T.A. NO. 119 / KOL / 20 1 5 ASSESSMENT YEAR : 200 5 - 20 0 6 M/S. SUPREME SULFONATORS PVT. LTD., .. ....... .... ............. .. .APP ELL ANT 72, COTTON S TREET, 2 ND FLOOR, KOLKATA - 700 007 [ PAN : A AFCS 1120 F ] - VS. - ASSISTANT COMMISSIONER OF INCOME TAX, ........... ... . RESPONDENT CIRCLE - 9, KOLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 APPEARANCES BY: SHRI SOUMITRA CHOUDHURY , ADVOCATE , FOR THE ASSESSEE S HRI RAJESH KUMAR , J CIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 2 7 , 2 01 5 DATE OF PRONOUNCING THE ORDER : FEBRUARY 2 7 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - VIII , KOLKATA IN APPEAL NO. 4 34 / CIT(A) - VIII / KOL/07 - 08 D ATED 27 . 1 0 .201 4 FOR THE ASSESSMENT YEAR 200 5 - 0 6 . 2. SHRI SOUMITRA CHOUDHURY , ADVOCATE, REPRESENTED ON BEHALF OF THE ASSESSEE AND S HRI RAJESH KUMAR , JCIT , SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESSEE IS A COMPANY WHICH IS DOING THE BUSINESS OF MANUFACTURE OF ACID SLURRY AND SPENT ACID. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD RECEIVED INTEREST SUBSIDY OF RS.7,90,909 / - DURING THE RELEVANT ASSESSMENT YEAR. LD. A.R. PLACED BEFORE ME THE COPY OF THE ARTICLES OF AGREEMENT I.T.A. NO . 119 / KOL ./201 5 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 2 OF 4 MADE ON 10.03.2005 BETWEEN THE ASSESSEE AND THE GOVERNOR OF THE STATE OF WEST BENGAL, WHEREIN IT IS SPECIFIE D THAT AS PER THE BACKWARD/OPERATIONAL AREA OF THE STATE S UBSIDY S CHEME BEING WEST BENGAL INCENTIVE SCHEME FOR COTTAGE & SMALL SCALE INDUSTRIES, 2000, THE GOVERNMENT HAD AGREED TO GRANT AN AMOUNT OF RS.7,90,909/ - AS INCENTIVE UNDER THE SA N CTION O RDER NO. 1 09/ESTT DATED 08.02.2005 OF THE GENERAL M ANAGER, DISTRICT INDUSTRIES CENTRE, HOOGHLY. IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE ASSESSING OFFICER ON THE GROUND THAT AS PER THE SUBSIDY SCHEME, THE SUBSIDY WAS SUPPOSED TO BE 5 0 % OF THE TOTAL INTERE ST PAID HELD THAT THE TOTAL INTEREST PAID BEING AN AMOUNT OF RS.23,82, 572/ - , 50% OF THE SAME CAME TO RS.11,91,286/ - AND AS THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE DIFFERENCE BETWEEN THE SUBSIDY AS PER THE SCHEME AND THE SUBSIDY AS R ECEIVED BY THE ASSESSEE , TO THE EXTENT OF RS.4,00,377/ - WAS TREATED AS INCOME OF THE ASSESSEE. IT WA S THE SUBMISSION THAT THE SUBSIDY GRANTED BY THE STATE GOVERNMENT VARIED YEAR TO YEAR AND IT IS ONLY ON THE BASIS OF THE ARTICLES OF THE AGREEMENT THAT THE A CTUAL SUBSIDY IS PAID TAKING INTO CONSIDERATION THE S ANCTION O RDER ISSUED BY THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, HOOGHLY. IT WAS THE SUBMISSION THAT IN FACT, IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE ACTUAL INTEREST OUTGO IN THE CASE O F THE ASSESSEE WAS RS.15,81,818/ - BUT THE SUBSIDY RECEIVED WAS RS.10,09,245/ - AND THE SAME HAD BEEN OFFERED TO TAX. HOWEVER, FOR THE RELEVANT ASSESSMENT YEAR THE INTEREST EXPENDITURE WAS RS.23,82,572/ - BUT THE SANCTION ORDER WAS ONLY FOR AN AMOUNT OF RS.7, 90,909/ - . IT WAS THE SUBMISSION THAT THE SCHEME PROVIDED FOR 50% OF THE INTEREST EXPENDITURE. HOWEVER, WHEN COMPUTING THE ACTUAL SUBSIDY, THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, HOOGHLY TAKES INTO CONSIDERATION VARIOUS SPECIFICATIONS FOR THE SANCT ION OF SUBSIDY. IT WAS THE SUBMISSION THAT THE SANCTION ORDER BEING THE QUANTIFYING ORDER AND THE ASSESSEE HAVING RECEIVED RS.7,90,909/ - , THE SUBSIDY WAS LIABLE TO BE FIXED ONLY RS.7,90,909/ - AS OFFERED BY THE ASSESSEE. IT WAS THE SUBMISSION T HAT THE ADDITION AS MADE BY THE I.T.A. NO . 119 / KOL ./201 5 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 3 OF 4 ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) WAS LIABLE TO BE DELETED. LD. A.R. ALSO FILED AN AFFIDAVIT FOR CONDONATION OF DELAY OF 13 DAYS IN FILING THE APPEAL. 4. IN REPLY, LD. SR. D.R. DID NOT RAISE ANY SE RIOUS OBJECTION TO THE CONDONATION OF DELAY. CONSEQUENTLY THE DELAY IN FILING THE APPEAL IS CONDONED AND THE APPEAL DISPOSED OF ON MERITS. 5. I N RESPECT OF THE ISSUE ON MERITS, LD. SR. D.R. SUBMITTED THAT AS PER THE SUBSIDY SCHEME ISSUED BY THE STATE OF WEST BENGAL, THE ASSESSEE WAS ENTITLED TO SUBSIDY OF 50% OF THE INTEREST OUTGO. IT WAS THE SUBMISSION THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND CONSEQUENTLY THE ASSESSING OFFICER AND THE LD. CIT(APPEALS) WAS RIGHT IN ADDING THE DIF FERENCE OF THE ACCRUED SUBSIDY AS PER THE SCHEME AND THE ACTUAL SUBSIDY RECEIVED BY THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ARTICLES OF AGR EEMENT BETWEEN THE ASSESSEE AND THE GOVERNOR OF THE STATE OF WEST BENGAL DATED 10.03.2005 BY WHICH THE ASSESSEE HAS BEEN GRANTED THE INCENTIVE UNDER THE WEST BENGAL INCENTIVE SCHEME FOR COTTAGE & SMALL SCALE INDUSTRIES, 2000 CLEARLY SHOWS THAT THE SAID INC ENTIVE IS AS PER THE SANCTION ORDER ISSUED BY THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, HOOGHLY AND IS IN PURSUANCE OF THE SAID APPLICATION SUBJECT TO THE CONDITIONS LAID DOWN IN THE S CHEME AND THE SANCTION MEMO. IN FACT, AS PER THE SAID AGREEMENT A ND THE SANCTION ORDER, THE ASSESSEE WAS ENTITLED TO AN AMOUNT OF ONLY RS.7,90,909/ - AND THE ASSESSEE HAS OFFERED THE FULL AMOUNT TO TAX. ADMITTEDLY, THE SCHEME PROVIDES FOR 50% OF THE INTEREST OUTGO. HOWEVER, THIS SCHEME IS NOT THE FINAL AUTHORITY. THE SC HEME ONLY LAYS DOWN THE GUIDELINES. THE FINAL AUTHORITY IS THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, HOOGHLY , WHO HAS TO ISSUE THE SANCTION ORDER. I.T.A. NO . 119 / KOL ./201 5 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 4 OF 4 THE SANCTION ORDER BEING ONLY FOR AN AMOUNT OF RS.7,90,909/ - , NO FURTHER AMOUNT CAN BE ASSESSED IN THE HANDS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF THE AMOUNT OF RS.4,00,377/ - AS MADE BY THE ASSESSING OFFICER REPRESENTING THE DIFFERENCE OF THE INTEREST SUBSIDY. 7 . IN THE RESULT, THE APPEAL FILE D BY THE ASSEESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 TH FEBRUARY , 201 5 . SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA, THE 2 7 TH D AY OF FEBRUARY , 201 5 COPIES TO : (1) M/S. SUP REME SULFONATORS PVT. LTD., 72, COTTON STREET, 2 ND FLOOR, KOLKATA - 700 007 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 9, KOLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF IN COME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S .