DCIT, Ernakulam V. M/s.South Shore Icecream P.LtdP.Ltd, Ernakulam

ITA 188/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2533 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-04-2013
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: P M VEERAMANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 187 & 188/COCH/2013 ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. VS. 1. M/S. SOUTH SHORE ICE CREAMS (P) LTD., D.NO.XXVIII/3030 CHERUPARAMBATHU ROAD, KADAVANTHRA, ERNAKULAM, KOCHI-20. [PAN: AAGSC 6870A] 2. M/S. JOJO FROZEN FOODS (P) LTD., 28/3030, CHERUPARAMBATHU ROAD, KADAVANTHRA, ERNAKULAM, KOCHI-20. [PAN: AAACJ 8843K] (REVENUE -APPELLANT) (ASSESSEE -R ESPONDENT) REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR ASSESSEE BY SHRI P.M. VEERAMANI, DATE OF HEARING 20/06/2013 DATE OF PRONOUNCEMENT 28/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE REVENUE ARE DIRE CTED AGAINST THE ORDERS PASSED BY THE LD. CIT(A)-I, KOCHI IN THE RESPECTIVE HANDS OF THE RESPONDENTS AND BOTH THE APPEALS RELATE TO THE ASSESSMENT YEAR 2008-09. SINCE THE I SSUE URGED IN THESE APPEALS IS IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND A RE BEING DISPOSED BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. I.T.A. NOS. 187 & 188/COCH/2013 2 2. THE SOLITARY ISSUE URGED IN THESE APPEALS IS WHE THER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PROPORTIONATE AMOUNT OF FREEZE R DEPOSIT CANNOT BE TREATED AS INCOME OF THE ASSESSEES HEREIN. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE LD. CIT(A) IN BOTH THE CASES HAS FO LLOWED THE DECISION DATED 25-05-2012 RENDERED BY THIS BENCH IN THE CASE OF M/S. SOUTH SH ORE ICE CREAMS (P) LTD. IN I.T.A. NO. 599/COCH/2010 FOR THE ASSESSMENT YEAR 2007-08. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED A COPY OF THE SAID DECISION BEFORE US. O N PERUSAL OF THE SAME, WE NOTICE THAT THE TRIBUNAL HAS FOLLOWED THE DECISION DATED 1 2.08.2011 RENDERED BY THE CO- ORDINATE BENCH ON AN IDENTICAL ISSUE IN THE CASE OF HIGH RANGE FOODS (P) LTD. IN I.T.A. NO. 652/COCH/2010. FOR THE SAKE OF CONVENIENCE, TH E RELEVANT OBSERVATIONS MADE IN THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN T HE CASE OF HIGH RANGE FOODS (P) LTD., (REFERRED SUPRA) ARE EXTRACTED BELOW: THE ASSESSEE RECEIVED DEPOSIT FOR THE SUPPLY OF FR EEZER FROM THE CONCERNED VENDORS. THE FREEZERS ARE REQUIRED TO SA FE KEEP THE EDIBLE ICE-CREAMS. THEY ARE REQUIRED FOR THE PURPOSE OF B USINESS. THE SMALL VENDORS MAY NOT BE INCLINED TO PURCHASE THE FREEZER S AS THEY ARE NOT AFFORDABLE TO THEM CONSIDERING THEIR STATUS. THIS MADE THE ASSESSEE COMPANY TO SUPPLY FREEZER ON THE RECEIPT OF FIXED D EPOSIT AND THE COMPENSATION OF THE SPREAD-OVER PERIOD. THEY ARE A TTACHED WITH A LIABILITY. THE ACCRUAL COMES ONLY ON TERMINATION O F AGREEMENT. THE BUSINESS NECESSITY REQUIRES CORDIAL RELATIONSHIP W ITH VENDORS. THE ASSESSEE CANNOT TREAT THESE TWO AMOUNTS AS RECEIPTS IN THE NATURE OF INCOME UNLESS THE SO-CALLED AGREEMENT TERMINATED. I N OTHER WORDS IT IS NOT A DEBT OWNED BY THE ASSESSEE. HENCE, UNDER THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THIS ISSUE TO BE DECIDED IN FAVOUR OF THE ASSESSEE BY SETTING ASIDE THE ORDERS OF THE AUTHORI TIES. BESIDES THE ASSESSEE NEVER TREATED THIS AS INCOME I N THE BOOKS. THE ASSESSEE CONSISTENTLY HOLDING IT SO AS THE AMOUNT ATTACHED WITH A LIABILITY TO REFUND. THE ASSESSEE NEVER ADMITTED T HIS AMOUNT AS INCOME IN THE BOOKS. ONLY ACCRUED INCOME AROSE TO THE ASS ESSEE DURING THE RELEVANT PREVIOUS YEAR ALSO CAN BE BROUGHT TO TAX UNDER THE INCOME- TAX PROVISIONS WHICH IS A SETTLED LAW. IN OTHER WO RDS, THERE MUST BE A DEBT OWNED TO THE ASSESSEE AND UNTIL THIS IS CREATE D IN FAVOUR OF THE ASSESSEE AS A DEBT DUE TO THE ASSESSEE, IT CANNOT B E SAID AS INCOME ACCRUED. HENCE, THE DECISION RELIED BY THE JR. D .R. IN THE CASE OF CIT I.T.A. NOS. 187 & 188/COCH/2013 3 VS. T.V. SUNDARAM IYENGAR AND SONS CITED SUPRA, IS CLEARLY DISTINGUISHABLE ON FACTS. IN THAT CASE, ASSESSEE I TSELF ADMITTED THIS AS INCOME AS PER THE BOOK ENTRIES. HENCE, IT IS DISTI NGUISHABLE. THE DECISION RELIED BY THE LD. COUNSEL FOR THE ASSE SSEE IN THE CASE OF CIT VS. REALEST BUILDERS AND SERVICES LTD. 307 ITR 2 02 (SC) IN ADDITION TO THE FOLLOWING CASES (A) SIDDHESWAR SAHAKARI SAKHAR KARKHANA LTD. VS. CI T & OTHERS 270 ITR 1 (SC); (B) BHARAT PETROLEUM CORPORATION LTD. VS . CIT 202 ITR 492 (CAL). (C) SUGAULI SUGAR WORKS (IMPUGNED) LTD. 236 ITR 518 (SC); (D) STAR INDIA P. LTD. VS. ADDL. CIT 3 11 ITR (ST) 235 (MUMBAI). (E) GOVIND PRASAD PRABHU NATH 171 ITR 417 (ALL.); (F) HINDUSTAN HOUSING AND LAND DEVELOPM ENT TRUST LTD. 161 ITR 524 (SC); (G) ACE BUILDERS PVT. LTD. VS. CIT 225 ITR 746 (SC); (H) MANTRA TANTA YANTRA VIGYAN VS. CIT 3 00 ITR 140 (RAJ.); AND (I) GUARDIAN INDUSTRIES CORPN. VS. ASSISTANT DIRE CTOR OF INCOME-TAX 7 DTR 594 (DEL.). ARE ALSO SUPPORTS THE PLEA OF THE ASSESSEE. THE AC CRUAL HAS BEEN DEALT WITH IN THE RELIED JUDGEMENTS. HENCE, UNDER THE GIV EN SET OF FACTS AND CIRCUMSTANCES, WE BY RELYING ON THE ABOVE DECISIONS SET ASIDE THE ORDERS OF THE AUTHORITIES AND ALLOW THIS GROUND OF THE ASSESSEE AS IT CANNOT BE TREATED AS INCOME FOR THE YEAR RELEVANT U NDER APPEAL. 4. SINCE THE LD. CIT(A) HAS FOLLOWED THE DECISION R ENDERED BY THIS BENCH ON THIS ISSUE, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. . I.T.A. NOS. 187 & 188/COCH/2013 4 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 28-06-2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH JUNE, 2013 GJ COPY TO: 1. 1. M/S. SOUTH SHORE ICE CREAMS (P) LTD., D.NO.XX VIII/3030, CHERUPARAMBATHU ROAD, KADAVANTHRA, ERNAKULAM, KOCHI-20. 2. M/S. JOJO FROZEN FOODS (P) LTD., 28/3030, CHERUP ARAMBATHU ROAD, KADAVANTHRA, ERNAKULAM, KOCHI-20. 3.THE THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRA L CIRCLE-1, ERNAKULAM. 4 THE COMMISSIONER OF INCOME-TAX(APPEALS)-I,KOCHI 5.THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 6. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 7. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN