ACIT, CHENNAI V. Mohan Breweries & Distilleries Ltd., CHENNAI

ITA 1293/CHNY/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6080 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SRI SHANMUGA PRIYA
• Keywords: Depreciation; Set aside
• Section: 43B; 143(3); 250; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , !' # $ , % $& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1293/CHNY/2017 ' (' /ASSESSMENT YEAR: 2003-04 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), CHENNAI VS. M/S. MOHAN BREWERIES & DISTILLERIES LTD., RAYALA TOWERS, 2 ND FLOOR, 158, ANNA SALAI, CHENNAI 600 002. [PAN: AAAVM 2415L] ( )* /APPELLANT) ( +,)* /RESPONDENT) )* - . / APPELLANT BY : MRS. SRI SHANMUGAPRIYA, JCIT +,)* - . /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE / - 0% /DATE OF HEARING : 11.12.2018 12( - 0% /DATE OF PRONOUNCEMENT : 09.01.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, CHEN NAI (CIT(A) FOR SHORT) DATED 21.03.2017 FOR THE ASSESSMENT YEAR (AY ) 2003-04. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS ON FACTS OF THE CASE AND IN LAW. ITA NO.1293/CHNY/2017 (AY: 2003-04) M/S. MOHAN BREWERIES & DISTILLERIES LTD. :- 2 -: 2. THE LEARNED CIT(A) ERRED IN ALLOWING THE ASSESSE S APPEAL AGAINST THE ORDER PASSED ON 24.11.2009 BY THE ASSESSING OFF ICER U/S 143(3) OF THE IT ACT , READ WITH ORDER OF HONBLE ITAT, FOR T HE AY 2003-04 IN THE CASE OF THE ASSESSEE FOR STATISTICAL PURPOSES. 2.1 THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT HI S DIRECTION TO THE ASSESSING OFFICER TO RE-COMPUTE THE INCOME OF THE A SSESSEE FOR A.Y. 2003-04 AMOUNTS TO SETTING ASIDE THE ASSESSMENT, A POWER WHICH IS NOT AVAILABLE TO THE LD.CIT(A) FROM 01.06.2001. 2.2 HAVING DIRECTED THE ASSESSING OFFICER TO FOLLOW THE DIRECTIONS GIVEN IN THE ORDER DATED 08.02.2008 IN ITA NO. 1360 & 136 1/MDS/2007 OF THE HONBLE ITAT, THE D.CIT(A) OUGHT TO HAVE APPRECIATE D THAT THE ASSESSING OFFICER PASSED THE ORDER DATED 24.11.2009 U/S 143(3) OF THE IT ACT , READ WITH ORDER OF HONBLE ITAT, FOR THE A Y 2003-04 IN THIS CASE FOLLOWING THE DIRECTIONS CONTAINED IN THE SAID ORDE R OF THE HONBLE ITAT. 2.3 THE ID. CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE HONBLE ITAT VIDE ITS ORDER DATED 08.02.2008, HAD REMITTED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER, ONLY TO FIND OUT WHETHER THE ASS ESSEE HAD BEEN ALLOWED DEDUCTION U/S 43B IN THE YEAR IN WHICH THE LIABILITY TO SALES TAX ACCRUED AND IF THE ASSESSEE HAD NOT CLAIMED THE DED UCTION THE SAME SHOULD BE ALLOWED ON THE BASIS OF ACTUAL PAYMENT. 2.4 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FINDING OF THE ASSESSING OFFICER IN PARA 5 OF PAGE 2 OF THE ASSESS MENT ORDER DT. 24.11.2009 THAT NEITHER THE ASSESSEE HAD DISALLOWED AND ADDED THE PAYMENTS U/S 43B OF THE IT ACT IN THE COMPUTATION O F TOTAL INCOME FOR THE A.YS 1995-96 TO 1997-98 IN WHICH LIABILITY TO S ALES TAX ACCRUED NOR HAD THE ASSESSING OFFICER DISALLOWED SUCH AMOUNT U/ S 43B OF THE IT ACT AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR ALLOWANC E IN THE A Y 2003-04 ON ACTUAL PAYMENT. 2.5 HAVING REGARDS TO THE FACTS OF THE CASE THAT TH E DIRECTIONS OF THE HONBLE ITAT HAVE ALREADY BEEN CARRIED OUT BY THE A SSESSING OFFICER IN HIS ORDER U/S 143(3) OF THE IT ACT DT. 24.11.2009 F OR AY 2003-04, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF THE AS SESSING OFFICER IN NEGATING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/ S 43B OF IT ACT. 3. FOR THESE GROUNDS AND ANY OTHER GROUND INCLUDING AMENDMENT OF GROUNDS THAT MAY BE RAISED DURING THE COURSE OF THE APPEAL PROCEEDINGS, THE ORDER OF LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RESPOND ENT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956. IT IS ENGAGED ITA NO.1293/CHNY/2017 (AY: 2003-04) M/S. MOHAN BREWERIES & DISTILLERIES LTD. :- 3 -: IN THE BUSINESS OF MANUFACTURE AND SALE OF INDIAN M ADE FOREIGN LIQUOR. THE RETURN OF INCOME FOR THE AY 2003-04 WAS FILED O N 01.04.2003 DECLARING TOTAL INCOME OF RS. 29,28,28,000/-. AGAI NST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSESSI NG OFFICER U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) VIDE ORDER DATED 28.03.2006. AFTER SET OFF OF BROUGHT FORWARD UNABS ORBED DEPRECIATION LOSS OF RS. 29,28,28,000/- THE INCOME WAS ASSESSED AT NIL. SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT, THE RESPONDENT ASSESSEE-COMPANY FILED A LETTER 12.04.2006 SEEKING RECTIFICATION OF THE ASSESSMENT ORDER ON THE GROUND THAT THE CLAIM MADE PER DEDUCTION OF SAL E TAX FOR PAYMENT OF INCOME TAX U/S. 43B. DURING THE COURSE OF ASSESSME NT PROCEEDINGS WAS NOT CONSIDERED BY THE ASSESSING OFFICER. THE SAID R ECTIFICATION PETITION WAS REJECTED BY THE AO. 4. BEING AGGRIEVED, THE ORDER OF THE ASSESSING OFFI CER, THE RESPONDENT-ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO ALLOWED THE SAME. THEN, THE REVENUE CARRIED THE MAT TER TO THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 08.02.2008 IN ITA NOS . 1360 & 1361/MDS/2007 SET ASIDE THE ISSUE TO THE AO WITH A DIRECTION TO VERIFY THE WHETHER THE SALES TAX LIABILITY WAS ALLOWED AS DEDU CTION IN THE YEAR OF ACCRUAL OF LIABILITY AND TO ALLOW THE SAME AS A DED UCTION IN THE YEAR OF ITA NO.1293/CHNY/2017 (AY: 2003-04) M/S. MOHAN BREWERIES & DISTILLERIES LTD. :- 4 -: PAYMENT OF SALE TAX, IN CASE IT WAS NOT ALLOWED AS A DEDUCTION IN THE YEAR OF ACCRUAL OF LIABILITY. 5. PURSUANT TO THE ORDER OF THE TRIBUNAL, THE AO PA SSED THE CONSEQUENTIAL ORDER DATED 24.11.2009 REJECTING THE CLAIM OF THE RESPONDENT ON THE GROUND THAT THE APPELLANT NEITHER DISALLOWED VOLUNTARILY THE PROVISION PER SALE TAX U/S. 43B OF THE ACT IN THE AYS. 1995- 1996, 1996-97 & 1997-98 NOR THE AO MADE ANY DISALLO WANCE U/S. 43B(3) OF THE ACT AND THE CLAIM FOR DEDUCTION U/S. 43B OF THE ACT WAS MADE ONLY AFTER THE CONCLUSION OF THE ASSESSMENT PROCEEDINGS, WHICH IS A NEW CLAIM, WHICH CANNOT BE ADMITTED UNDER PROCEEDINGS O F THE S. 154 OF THE ACT. 6. BEING AGGRIEVED BY THE CONSEQUENTIAL ORDER PASSE D, THE APPELLANT CARRIED THE MATTER TO THE LD. CIT(A), WHO VIDE IMPU GNED ORDER HAS SET ASIDE THE MATTER TO THE AO AGAIN. BEING AGGRIEVED, THE ORDER OF REMAND, THE REVENUE IS IN APPEAL BEFORE US IN THE PRESENT A PPEAL. 7. IT IS CONTENDED THAT THE ORDER OF REMAND BY THE LD. CIT(A) IS AGAINST THE PLAIN PROVISIONS OF THE ACT AS THE PROVISION OF S. 250 OF THE ACT DOES NOT EMPOWER LD. CIT(APPEALS) TO REMAND ANY MATTER T O THE AO. IT IS FURTHER CONTENDED THAT WHEN THE AO RENDERED A CATEG ORICAL FINDING THAT THE LIABILITY HAD NOT ACCRUED IN THE EARLIER YEARS, THE QUESTION OF ITA NO.1293/CHNY/2017 (AY: 2003-04) M/S. MOHAN BREWERIES & DISTILLERIES LTD. :- 5 -: DISALLOWANCE IN THE EARLIER YEARS DOES NOT ARISE AN D THEREFORE, ALLOWING THE SAME ON THE PAYMENT BASIS U/S. 43B OF THE ACT D OES NOT ARISE, THE REMAND TO THE AO IS UNWARRANTED. 8. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTA TIVE SUPPORTED THE ORDER OF LD. CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT APP EAL IS WHETHER THE ORDER OF REMAND BY LD. CIT(A) TO THE AO TO VERIFY T HE ACCRUAL OF LIABILITY IN THE EARLIER YEARS AND ALLOWED THE SAME AS DEDUCTION IN THE YEAR OF PAYMENT OF SALE TAX U/S. 43B OF THE ACT IS VALID IN LAW OR NOT. WE FIND THAT THE DIRECTIONS OF THE LD. CIT(A) ARE ONLY IN CONSON ANCE WITH THE DIRECTION OF THE TRIBUNAL IN THE EARLIER ROUND OF PROCEEDINGS . FURTHER, IT IS NOT THE CASE OF REVENUE THAT CLAIM WAS MADE SUBSEQUENT TO T HE CONCLUSION OF ORIGINAL ASSESSMENT PROCEEDINGS. NOTING WAS BROUGH T ON RECORD BY THE REVENUE TO CONTROVERT THE CLEAR FINDING BY THE LD. CIT(A) THAT THE CLAIM FOR THE DEDUCTION OF THE SALES TAX ON PAYMENT BASIS WAS MADE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THUS, WE DO NOT FIND ANY ILLEGALITY IN THE ORDER OF REMAND OF LD. CIT(A) TO THE AO. ITA NO.1293/CHNY/2017 (AY: 2003-04) M/S. MOHAN BREWERIES & DISTILLERIES LTD. :- 6 -: 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 09 TH DAY OF JANUARY, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( !' # $ ) (INTURI RAMA RAO) % /ACCOUNTANT MEMBER /CHENNAI, 3 /DATED: 09 TH JANUARY, 2019. EDN, SR. P.S - +045 65(0 /COPY TO: 1. )* /APPELLANT 4. / 70 /CIT 2. +,)* /RESPONDENT 5. 58 +0 /DR 3. / 70 ( )/CIT(A) 6. 9' : /GF