Asst. Commissioner of Income Tax, Circle-2(1), Panaji V. Goa State Co-op. Milk Producers Union Ltd., Goa

ITA 130/PAN/2014

• Counselvise Citation: 13024114 RSA 2014
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT K LD
• Assessee Lawyers: SHAM J KAMAT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 130/PNJ/2014 : (ASST. YEAR : 2009 - 10) ASST. COMMISSIONER OF INCOME TAX CIRCLE - 2(1), PANAJI, GOA. (APPELLANT) VS. GOA STATE CO - OPERATIVE MILK PRODUCERS UNION LTD., CURTI, PONDA, GOA (RESPONDENT) PAN : AAAAG3101F ASSESSEE BY : SHAM J. KAMAT, CA REVENUE BY : NISHANT K., LD. DR DATE OF HEARING : 25/06/2014 DATE OF PRONOUNCEMENT : 27 /06/2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 19.12.2013 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1) THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF PAYMENT OF PARTICIPATORY INCENTIVES MADE BY THE AO OF RS.40,40,341/ - , RELYING ON THE DECISION OF THE ITAT, PANAJI, IN ASSESSEES OWN CASE FOR AY 2003 - 04 IN ITA NO. 159/PNJ/2006 DATED 19.01.2007. 2) THE CIT(A) HAS FAILED TO APPRECIATE THAT THE REVENUE HAS NOT ACCEPTED THE ITATS ABOVE DECISION AND HAS PREFERRED AN APPEAL BEFORE THE HON. HIGH COURT, BOMBAY, WHICH IS PENDING. 3) THE CIT(A) ERRED IN LAW AND ON THE FACTS IN HOLDING THAT THE EXPENDITU RE OF RS.40,40,341/ - IS IN THE NATURE OF DEFERRED PAYMENT OF PURCHASE PRICE RELATED TO SUPPLY OF MILK TO THE MEMBER SOCIETIES BY THE ASSESSEE AND NOT THE DISTRIBUTOR PROFITS. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWI TH THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ISSUE 2 ITA NO. 130/PNJ/2014 (ASST. YEAR : 2009 - 10) INVOLVED IN THIS APPEAL RELATES TO THE DISALLOWANCE OF PAYMENT OF PARTICIPATORY INCENTIVE RELATABLE TO SUPPLY OF MILK TO THE CONSTITUENT MEMBER SOCIETY WHO HAS SUPPLIED THE MILK TO THE ASS ESSEE. THIS ISSUE IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS TRIBUNAL IN ITA NO. 159/PNJ/2006 FOR A.Y. 2003 - 04 DT. 19.1.2007 IN WHICH THIS TRIBUNAL ON A SIMILAR ISSUE UNDER PARA 5 & 6 OF ITS ORDER TOOK THE VIEW IN FAVOUR OF THE ASSESSE E BY OBSERVING AS UNDER : 5. WE HAVE CAREFULLY CONSIDERED THE ISSUE IN VIEW OF THE MATERIAL PLACED ON RECORD, ORDERS OF LOWER AUTHORITIES AND RIVAL SUBMISSIONS. IT IS OBSERVED THAT (I) THE ASSESSEE IS A COOPERATIVE SOCIETY AND ITS OBJECT AND PURPOSE IS T O PROVIDE THE REMUNERATIVE PRICE TO ITS CONSTITUENTS FOR THEIR PRODUCTS. (II) MILK IS A PERISHABLE COMMODITY AND A PORTION OF PURCHASE PRICE IS RETAINED BY THE COOPERATIVE SOCIETY SO THAT ANY LOSS MAY NOT BE INCURRED TO THE APEX GOVERNING BODY BECAUSE OF U NFORESEEN SPOILING OF MILK OR MILK PRODUCTS (III) THE DECISION FOR DISTRIBUTION OF 80% OF THE PROFIT AT THE END OF THE YEAR AS INCENTIVE BONUS TO THE CONSTITUENT COOPERATIVE SOCIETIES IS TAKEN ON THE BASIS OF MILK SUPPLIED BY THEM AND NOT ON THE BASIS OF T HEIR SHARE HOLDINGS IN THE ASSESSEE COOPERATIVE SOCIETY. (IV) EVEN IF, THE ASSESSEE HAS ACCEPTED THE DECISION IN EARLIER YEAR, THE ISSUE INVOLVED IS A POINT OF LAW AS TO WHETHER THE EXPENDITURE IN QUESTION IS IN THE NATURE OF DEFERRED PURCHASE PRICE OR IN THE NATURE OF DISTRIBUTION OF PROFITS IN THE FORM OF DIVIDEND AND SINCE EVERY ASSESSMENT YEAR IS A SEPARATE YEAR, A LEGAL CLAIM CAN BE MADE IN ANY ASSESSMENT YEAR IRRESPECTIVE OF THE ACCEPTANCE OF THE ORDER OF THE L D. CIT(A) IN EARLIER YEAR BECAUSE THE RES - JUDICATA AND ESTOPPEL DO NOT APPLY TO THE INCOMETAX PROCEEDINGS WHICH ARE CONSIDERED SEPARATE PROCEEDING FOR EVERY ASSESSMENT YEAR, AND (V) IT IS THE DUTY OF THE AO TO ALLOW ADMISSIBLE CLAIM UNDER THE LAW IF IT IS MADE DURING THE COURSE OF ASSESSMENT PROC EEDINGS EVEN IF PAYMENT HAS NOT BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT ON THE ACTUAL PAYMENT BASIS OR ON THE BASIS OF THE PROVISION THEREOF. 6. IN VIEW OF THE FOREGOING, WE ARE OF THE CONSIDERED OPINION THAT THE EXPENDITURE IS RELATABLE TO PURCHASES AND IN THE NATURE OF DEFERRED PAYMENT OF PURCHASE PRICE RELATABLE TO SUPPLY OF MILK AND NOT THE SHARE HOLDING OF THE CONSTITUENTS COOPERATIVE SOCIETIES OF THE ASSESSEE COOPERATIVE SOCIETY. THE EXPENDITURE IS, THEREFORE, CONSIDERED AS ADMISSIBLE DEDUCTION. THE DECISION OF THE LOWER AUTHORITIES ON THIS ISSUE IS VACATED AND T HE GROUND OF APPEAL IS ALLOWED. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THIS TRIBUNAL, WE CONFIRM THE ORDER OF CIT(A) DELETING THE DISALLOWANCE. 3 ITA NO. 130/PNJ/2014 (ASST. YEAR : 2009 - 10) 3. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 4. ORDER PRONOUNCED IN THE OPEN COURT ON 27 .06.2014. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER P LACE : PANAJI / GOA DATED : 27 .06. 201 4 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER