The Dy. CIT.,GNR Circle, Gandhinagar V. Gujarat Maritime Board, Gandhinagar

ITA 1232/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5826 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDH RA UMPANYU
• Assessee Lawyers: S N SOPARKAR
• Keywords: Revised return
• Section: 43B; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER DCIT (EXEMPTION), CIRCLE - 1, AHMEDABAD (APPELLANT) VS GUJARAT MARITIME BOARD, GMB BHAVAN, SECTOR - 10 - A, GANDHINAGAR - 382011 PAN: AABCG6676L (RESPONDENT) REVENUE BY : S MT. VASUNDH RA UMPANYU , CIT - D . R. ASSESSEE BY: S H RI S.N. SOPARKAR , A.R. DATE OF HEARING : 14 - 02 - 2 018 DATE OF PRONOUNCEMENT : 20 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 , ARIS ES FROM ORDER OF THE CIT(A) - 7 , AHM EDABAD DATED 23 - 02 - 2015 , IN PROCEEDINGS UNDER SECTION 154 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. THE LD. COMMIS SIONER OF INCOME - T AX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF UNPAID WATER FRONT ROYALTY OF RS.83,24,54,068/ - MADE BY THE ASSESSING OFFICER. I T A NO . 1232 / A HD/20 15 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 1232 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. GUJARAT MARITIME BOARD 2 3. THE BRIEF FACTS OF THE CASE IS THAT ASSESSEE HAS FILED RETURN OF INCOME ON 31 ST OCTOBER, 2 007 SHOWING NIL INCOME. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 8 TH SEPTEMBER, 2008. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS DEBITED AN AMOU NT OF RS. 115 , 65 , 80 , 932/ - AS PAYMENT TOWARDS WATER FRONT ROYALTY TO GOVERNMENT OF GUJARAT. THE ASSESSEE HAS MADE FURTHER PAYMENT OF RS. 83 , 24 , 54 , 068/ - ON ACCOUNT OF WATER FRONT ROYALTY ON 31 ST MARCH, 2008 AS PER ORDER OF STATE GOVERNMENTS PORTS AND TR ANSPORT DEPARTMENT. THE ASSESSEE HAS EXPLAINED THAT THE AFORESAID AMOUNT WAS PAID TO THE GOVERNMENT OF GUJARAT AS WATER FRONT CHARGES FOR ALLOWING THE ASSESSEE TO OPERATE ALONG THE COASTLINE OF GUJARAT. ON SCRUTINY, THE ASSESSING OFFICER OBSERVED THAT AS SESSEE HAS PAID WATER FRONT ROYALTY AT HIGHER RATE THAN THE RATE CHARGED FROM PRIVATE PORTS AS PER THE CHART BELOW DISPLAYING THE RATE CHARGED BY T H E GOVERNMENT FROM T H E ASSESSEE AND PRIVATE PORTS. SR. NO. TYPE OF CARGO IN CAPTIVE JETTIES, PRIVATE JETTI ES AND GUJARAT MARITIME BOARD PORT APPLICABLE FROM 1/4/2005 IN PRIVATE PORT APPLICABLE FROM 18/7/2003 OR AS PER THE PROVISION OF THE CONCESSION AGREEMENT 1 LIQUID CARGO 15 10 T SOLID CARGO 10 5 ON QUESTIONING , THE ASSESSEE EXPLAINED THAT T H E STATE GOVERNMENT OF GUJARAT IS COMPETENT TO ENACT T HE LAW AND FIX THE RATE AS IT DEEMED FIT. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE . HE OBSERVED THAT GUJARAT MARITIME BOARD IS FOUND AND RUN BY THE STATE GOVERNMENT ITSELF FURTHER WHEN IT LEVIES CHARGE ON IT S OWN ENTITY EITHER IT SHOULD BE AT T H E MARKET RATE OR IT SHOULD BE LESS THAN THAT. HE OBSERVED I.T.A NO. 1232 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. GUJARAT MARITIME BOARD 3 THAT T HE RAT E AT WHICH T HE WATER FRONT ROYALTY PAID BY T HE GUJARAT MARITIME BOARD (ASSESSEE ) WAS HIGHER THAN THE RATE AT WHICH THE SAME WAS PAID BY THE PRIVATE PARTIES TO THE STATE GOVERNMENT. IN VIEW OF THE ABOVE H E HAS CONCLUDED THAT THE EXCESS PAYMENT OF WATER FRONT ROYALTY OF RS. 83 , 24 , 54 , 068/ - W AS NOT FOR THE BUSINESS PURPOSE , THEREFORE, THE SAME WAS DISALLOWED. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) VIDE ORDER DATED 26 TH FEB, 2010 HAS HELD THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THE WATER FRONT ROYALTY IS A STATUTORY LIABILITY AND IS AN ALL OWABLE EXP E NSE. BUT ONLY SUCH LIABILITY WOULD BE ALLOWABLE WHICH IS QUANTIFIED AS PER THE NOTIFICATION DATED 28 TH MARCH, 2008. S INCE IT IS A STATUTORY LIABILITY, SECTION 43B WOULD BE APPLICABLE AND SUCH QUANTIFIED LIABILITY AS REFERRED IN THE PRECEDING S ENTENCE SUBJECT TO ITS PAYMENT DURING THE FINANCIAL YEAR UNDER CONSIDERATION WOULD BE ALLOWABLE EXPENSE. T H E ASSESSING OFFICER HAS GIVEN APPEAL EFFECT TO THE ORDER OF CIT(A) ON 13RD APRIL, 2010 BUT HAS NOT ALLOWED THE CLAIM OF WATER FRONT ROYALTY OF RS. 8 32454068/ - ON THE GROUND THAT ASSESSEE HAS NOT PAID THIS SUM WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME, THEREFORE, T HE SAME WAS DISALLOWED U/S 43B OF T HE ACT. THEREAFTER, THE ASSESSEE HAS FILED APPLICATION FOR RECTIFICATION U/S. 154 OF THE ACT BE FORE THE ASSESSING OFFICER AND SOUGHT RECTIFICATION IN RESPECT OF GIVING EFFECT TO CIT(A) S ORDER DA T ED 13 TH APRIL, 2010 REGARDING THE CLAIM OF AFORESAID WATER FRONT ROYALTY. THE ASSESSING OFFICER HAS REJECTED THE REQUEST OF THE ASSESSEE VIDE ORDER U/S. 154 OF THE ACT DATED 30 TH DECEMBER, 2010 STATING THAT ASSESSING OFFICER HAS NO JURISDICTION U/S. 154 TO CONSIDER THE ISSUE AS THERE IS NO APPARENT MISTAKE FROM THE RECORD. I.T.A NO. 1232 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. GUJARAT MARITIME BOARD 4 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) VIDE ORDE R DATED 23 RD FEB, 2015 HAS ALLOWED THE APPEAL OF ASSESSEE STATING THAT ASSESSEE HAS PAID WATER FRONT ROYALTY OF RS. 83 , 24 , 54 , 068/ - ON 31 ST MARCH, 2008 BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, THEREFORE, THE DISALLOWANCE OF WATER FRONT ROYALTY B Y THE ASSESSING OFFICER WAS A MISTAKE APPARENT FROM RECORD. DURING T HE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. ON THE OTHER HAND, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK CONTAINING COPIES OF ASSESSMENT ORDER, APPELLA TE ORDER, SUBMISSION MADE BEFORE LOWER AUTHORITIES ETC. HE HAS ALSO PLACED RELIANCE ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF THE ASSESSEE ITSELF VID E APPEAL NO. 673 OF 2010 DATED 30 TH AUGUST, 2011 AND THE DECISION OF THE CO - ORDINATE BENCH OF THE ITAT IN ITA NOS. 454/AHD/2011, 307/AHD/2010 & OTHERS ORDER DATED 27 - 09 - 2016 IN THE CASE OF THE ASSESSEE ITSELF. HE HAS CONTENDED THAT LD. CIT(A) HAS CORRECTLY AL LOWED THE CLAIM OF THE ASSESSEE AS ASSESSEE HAS MADE THE PAYMENT BEFORE THE DUE DATE OF FILLING OF RETURN OF INCOME. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IT IS UNDISPUTED FA C T THAT FURTHER LIABILITY IN RESPECT OF WATER FRONT ROYALTY WAS CRYSTALIZED /QUANTIFIED AND NOTIFIED ONLY ON 29 TH MARCH, 2008 BY THE GOVERNMENT OF GUJARAT TO BE PAID BY GUJARAT MARITIME BOARD (ASSES SEE). THE ASSESSEE HAS PAID THE IMPUGNED LIABILITY ON 31 ST MARCH, 2008 AND FILED ITS REVISED RETURN OF INCOME ON 13RD OCTOBER, 2008. WE OBSERVE FROM THE CLEAR FINDING OF THE LD. CIT(A) THAT T H E ADDITIONAL LIABILITY OF WATER FRONT ROYALTY WAS PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME BY THE ASSESSEE ON 31 ST MARCH, 2008. THEREFORE, TH E LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY STATING THAT THERE WAS A MISTAKE I.T.A NO. 1232 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. GUJARAT MARITIME BOARD 5 APPARENT FROM RECORD. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THESE UNDISPUTED FINDINGS OF THE LD. CIT(A). IN VIEW OF THE ABOVE FACTS AND FINDINGS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOU NCED IN THE OPEN C OURT ON 20 - 03 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /0 3 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESS EE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,