M/S RAJASTHAN SATE BEVERGES CORPORATION LTD., Jaipur V. DCIT, Jaipur

ITA 166/JPR/2012

• Counselvise Citation: 16623114 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: RAGHAV BAJAJ; NIKHIL TOTUKA
• Keywords: Depreciation; Business expenditure; Opportunity of being heard; Additional evidence; Competent authority
• Section: 43B; 234B

Judgement Text

ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 166/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : AACCR 9522 R M/S. RAJASTHAN STATE BEVERAGES CORP. LTD. VS. THE DCIT IST FLOOR, C-BLOCK, VITA BHAWAN, JANPATH CIRCLE- 6 JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ITA NO. 207/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : AACCR 9522 R THE DCIT VS. M/S. RAJASTHAN STATE BEVERAGES CORP. LTD. CIRCLE- 6 IST FLOOR, C-BLOCK, VITA BHAWAN, JANPAT H JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAGHAV BAJAJ & SHRI NIKHIL TOTUKA DEPARTMENT BY: SHRI A.K. KHANDELWAL DATE OF HEARING: 29-09-2014 DATE OF PRONOUNCEMENT: 28-11-2014 ORDER PER R.P. TOLANI, JM THESE ARE THE CROSS APPEALS FILED AGAINST THE ORD ER OF THE LD. CIT(A)- II, JAIPUR DATED 26-12-2011 FOR THE ASSESSMENT YEAR 2008-09. 2.1 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN IT S APPEAL. ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 2 (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A)-II UPHOLDING ASSESSMENT OR DER IN RELATION TO THE ADDITION OF RS. 43,32,810/- ON ACCO UNT OF DISALLOWANCE U/S 43B OF THE I.T. ACT, 1961 IS PERVE RSE, ARBITRARY AND WITHOUT APPLICATION OF MIND. (2) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A)-II UPHOLDING THE ADDITION OF RS. 10,53,905/- ON ACCOUNT OF DISALLOWANCE OF PRIOR PE RIOD EXPENSES. (3) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-II HAS ERRED IN UPHOLDING THE LEVY OF INTERE ST U/S 234B AND 234D OF THE I.T. ACT, 1961. 3.1 THE REVENUE HAS RAISED FOLLOWING GROUNDS IN IT S APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE ADDITION OF RS. 19.00 CRORES MADE BY THE AO BY DISALLOWING THE PAYMENT OF PRIVILEGES FEE S WITHOUT APPRECIATING THE FACT THAT SAID PAYMENT WAS APPLICA TION OF INCOME OR APPROPRIATION OF PROFIT. (II) DELETING THE ADDITION OF RS. 19.00 CRORES MADE BY THE AO BY DISALLOWING THE PAYMENT OF PRIVILEGES FEE S WITHOUT APPRECIATING THE FACT THAT THE SAID EXPENSES ARE OF CAPITAL IN NATURE. (III) DELETING ADDITION OF RS. 3,91,677/- MADE ON ACCOUNT OF DEPOSITING THE PF / ESI PAYMENT BEYOND THE PRESCRIBED TIME DESPITE THE FACT THAT AS PER SECTIO N 36(1)(VA) EMPLOYEES CONTRIBUTION SHOULD HAVE BEEN DEPOSITED I N TIME AS PRESCRIBED IN THE RELEVANT LAW. SECTION 43B PERMITS DELAYED PAYMENT OF PAID BEFORE FILING OF ROI AS PER SECTION 139(1) IN CASE OF EMPLOYERS CONTRIBUTION NOT IN THE CASE OF EMPLOYEES CONTRIBUTION. ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 3 4.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A CONCERN OF RAJASTHAN STATE GOVT. ENGAGED IN THE BUSINESS OF MANUFACTURIN G AND TRADING OF IMFL/BEER IN THE STATE OF RAJASTHAN. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS PRAYED FOR ADMISSION OF ADDIT IONAL EVIDENCE UNDER RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 B EING THE CORRESPONDENCE IN RESPECT OF PAYMENT OF LATE FEE O F RS. 3.20 LACS AS TO DEPRECIATION ON COMPUTER. IT IS PLEADED THAT AT THE TIME OF HEARING BEFORE THE LD. CIT(A), THE RELEVANT FILE COULD NOT BE LOCATED FROM THE CORPORATION OFFICE. OTHER EVIDENCE IN THIS REGARD WAS FILED BEF ORE THE LD. CIT(A) IN THE IMPRESSION THAT IT WAS SUFFICIENT TO SUPPORT THE CO NTENTION OF THE ASSESSEE. THEREAFTER THE RELEVANT EVIDENCE WAS LOCATED AFTER GREAT EFFORTS BEING THE CORRESPONDENCE OF THE CASE AND IT IS NECESSARY FOR THE DECISION OF THE APPEAL. IT IS THUS REQUESTED THAT THE SAME SHOULD BE ADMITT ED AS AN ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. 4.2 THE LD. DR IS HEARD ON THIS ISSUE WHO SUPPORTED THE ORDER OF THE LD. CIT(A). 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THE ADD ITIONAL EVIDENCE PUT FORTH ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 4 BY THE LD. AR OF THE ASSESSEE IS NECESSARY FOR THE DECISION OF THIS APPEAL. IN VIEW THEREOF, THE SAME IS ADMITTED. 5.1 APROPOS DEPARTMENTAL APPEAL, THE LD. DR RELIED ON THE ORDER OF THE AO RELATING TO ISSUE OF PAYMENT OF PRIVILEGES FEES . 5.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE GROUND NO. (I) AND (II) OF THE REVENUE PERTAINS TO PAYMENT OF PRIVILEG ES FEES WHICH HAS BEEN ALLOWED AS BUSINESS EXPENDITURE BY THIS BENCH OF IT AT IN THE CASE OF RAJASTHAN STATE BEVERAGES CORPORATION LTD. VS. DCIT (ITA NO. 540/JP/2011 A.Y. 2007-08) AND ACIT VS. RAJASTHAN STATE BEVERAGE S CORPORATION LTD. (ITA NO. 901/JP/2009 A.Y. 2006-07). 5.3 THE RELEVANT FINDINGS OF THE TRIBUNAL FOR THE A SSESSMENT YEAR 2007-08 VIDE ITS ORDER DATED 21-10-2011 IN ITA NO. 545/JP/2 011 IS REPRODUCED AS UNDER:- 14. THE LD. CIT(A) AFTER CONSIDERING THE OBSERVAT ION DELETED THE ADDITION AFTER OBSERVING AS UNDER:- IN THE PRESENT CASE THE ASSESSEE COMPANY WAS GRANTED EXCLUSIVE PRIVILEGES FOR WHOLESALE TRADE OF INDIAN MADE FOREIGN LIQUOR AND BEER IN THE STATE OF RAJAST HAN FOR THE FINANCIAL YEAR 2006-07 UNDER THE PROVISIONS OF THE RAJASTHAN EXCISE ACT, 1950 BY COMPETENT AUTHORITY U NDER THE SAID ACT. IN EXERCISE OF ITS POWERS U/S 30 AND 42 OF ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 5 THE RAJASTHAN EXCISE ACT, 1950, THE COMPETENT AUTHO RITY UNDER THE SAID ACT HAS LEVIED A PRIVILEGES FEES OF RS. 15 CRORES FOR FINANCIAL YEAR 2006-07 VIDE ITS ORDER NO . F.4(5)/FD/EX/2005 DATED 28-03-2007 UPON THE ASSESSE E COMPANY IN LIEU OF GRANTING THE SAID PRIVILEGES. IN VIEW OF THESE FACTS AND FOLLOWING THE ORDER OF HON'BLE TRI BUNAL FOR ASSESSMENT YEAR 2006-07, I DIRECT THE AO TO DEL ETE THE ADDITION OF RS. 15 CRORES. THIS GROUND OF APPEAL IS ALLOWED. 15 AFTER HEARING BOTH THE PARTIES, WE FEEL THAT ISS UE BEFORE US STANDS COVERED BY THE ORDER OF THE TRIBUNAL IN T HE CASE OF THE ASSESSEE FOR EARLIER YEARS AND HENCE WE DECLINE TO INTERFERE IN THE FINDING OF THE LD. CIT(A). 5.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. APROPOS FIRST AND SECOND ISSUE OF THE DEPARTMENT PERTAINING TO PAYMENT OF PRIVILEGES FEES AMOUNTING TO RS. 19.00 CRORES, WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DEC ISION OF THIS BENCH OF ITAT (SUPRA) IN EARLIER YEARS. RESPECTFULLY FOLLOWING T HE DECISION OF THIS BENCH OF ITAT (SUPRA), THE GROUNDS RAISED BY THE REVENUE IN THIS CASE ARE DISMISSED. 6.1 APROPOS 3 RD ISSUE OF DEPARTMENT PERTAINING TO PAYMENT OF ESI / PF, THE LD. DR HAS RELIED ON THE ORDER OF THE AO. HOWEVER, THE LD. CIT(A) HAS ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 6 ALLOWED THE PAYMENT OF ESI/ PF CONTRIBUTION PAYMENT VIDE PARA 7.1 OF HIS ORDER 6.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT IT IS NOT DISPUTED THAT PAYMENTS OF PF / ESI WERE DEPOSITED BY THE ASSESSEE BEFORE DUE DATE OF FILING OF THE RETURN FOR THE IMPUGNED YEAR. THE LD. AR RELIED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT VS VINAY CEMENT 213 CTR 268. 6.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS VINAY CEMENT (SUPRA) THAT THE ISSUE IN QUESTION IS IN FAVOUR OF THE ASSESSEE. THUS, IN VIEW THEREOF, THIS GROUND OF THE REVENUE IS DISMISSED. 7.1 ADVERTING TO ASSESSEE'S APPEAL, SINCE WE HAVE A DMITTED THE ADDITIONAL EVIDENCE OF THE ASSESSEE, THE LD. DR CONTENDS THAT THE DEPARTMENT SHOULD BE GIVEN AN OPPORTUNITY TO VERIFY THE PRIMARY RECORD F ROM THE AO. THUS IT WILL BE DESIRABLE TO RESTORE BACK THE ASSESSEE'S GROUNDS OF APPEAL TO THE FILE OF THE AO FOR WHICH LD. COUNSEL HAS NO OBJECTION. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN THE CONTENTIO NS OF THE REVENUE AND THE LD. AR OF THE ASSESSEE HAS NO OBJECTION TO RESTORE THE MATTER TO THE FILE OF THE AO. IN VIEW THEREOF, WE RESTORE THE APPEAL OF THE A SSESSEE TO THE FILE OF THE ITA NO. 207/JP/2012 DCIT, CIRCLE- 6,VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD., JAIPUR 7 AO TO DECIDE THE SAME AFRESH CONSIDERING THE ADDITI ONAL EVIDENCE AND BY PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 8.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THAT OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28- 11-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 28 TH NOV. 2014 *MISHRA COPY FORWARDED TO:- 1. M/S. RAJASTHAN STATE BEVERAGES CORP. LTD. JAIP UR 2. THE DCIT, CIRCLE- 6, JAIPUR 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 166/JP/2012) AR ITAT, JAIPUR