ACIT Villupuram Circle , Villupuram V. Tamil Nadu State Transport Corporation (Villupuram) Limited , Villupuram

ITA 1945/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4896 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVASA RAO
• Assessee Lawyers: V JAGADISAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . , ' , % & BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NOS. 908 & 1943 TO 1946 & 1947 TO 1948/MDS/2017 %' ' /ASSESSMENT YEARS: 2012-13 & 2008-09 TO 2011-12 & 2013-14 TO 2014-15 THE ASST. COMMISSIONER OF INCOME TAX, VILLUPURAM CIRCLE, VILLUPURAM-605 602. VS. M/S.TAMIL NADU STATE TRANSPORT CORPORATION (VILLUPURAM) LTD., 3/137, SALAMEDU, VALUDHAREDDY, VILLUPURAM-605 702. [PAN: AAACT 1107 E ] ( ( /APPELLANT) ( )*( /RESPONDENT) CROSS-OBJECTION NOS.158 TO 161 /MDS/2017 %' ' /ASSESSMENT YEARS: 2008-09 TO 2011-12 M/S.TAMIL NADU STATE TRANSPORT- CORPORATION (VILLUPURAM) LTD., 3/137, SALAMEDU, VALUDHAREDDY, VILLUPURAM-605 702. VS. THE ASST. COMMISSIONER- OF INCOME TAX, VILLUPURAM CIRCLE, VILLUPURAM-605 602. [PAN: AAACT 1107 E ] ( ( /APPELLANT) ( )*( /RESPONDENT) ASSESSEE BY : MR.V.JAGADISAN, CA DEPARTMENT BY : MR.B. SRINIVASA RAO, CIT / /DATE OF HEARING : 30.01.2018 / /DATE OF PRONOUNCEMENT : 30.01.2018 ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 2 -: / O R D E R PER BENCH : ITA NOS.908 & 1943 TO 1946 & 1947 TO 1948/MDS/2017 ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS)-PUDUCHERRY, IN ITA NO.29/CIT(A )-PDY/2015-16 DATED 29.11.2016 FOR THE AY 2012-13 AND IN ITA NO.1 35, 168 TO 172/CIT(A)-PDY/2016-17 DATED 30.05.2017 FOR THE AYS 2008-09 TO 2011- 12 & 2013-14 TO 2014-15. CO NOS.158 TO 161/MDS/2017 ARE THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN THE REVENUES A PPEAL NOS.1943 TO 1946/MDS/2017 FOR THE AYS 2008-09 TO 2011-12 RESPEC TIVELY. 2.0 SHRI B. SRINIVASA RAO, CIT REPRESENTED ON BEHAL F OF THE REVENUE AND SHRI V.JAGADISAN, CA, REPRESENTED ON BEHALF OF THE ASSESSEE. 3.0 AS ALL THE APPEALS ARE RELATED TO THE SAME ASSE SSEE AND INTER- CONNECTED, ALL APPEALS ARE DISPOSED OFF BY THIS COM MON ORDER. 4.1 IN ALL THE APPEALS, THE ISSUES ARE COMMON BEING AGAINST THE ACTION OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE OF TH E EXCEPTIONAL ITEM REPRESENTING THE PASSES ISSUED BY THE ASSESSEE TO T HE STUDENTS WHICH HAD BEEN WRITTEN OFF FOR THE AY 2012-13. THERE IS AN AD DITIONAL ISSUE BEING AGAINST THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION REPRESENTING THE DISALLOWANCE TO SOCIAL COST WHICH HAD BEEN WRIT TEN OFF. IN RESPECT OF ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 3 -: THE CROSS OBJECTIONS, IT WAS SUBMITTED BY THE LD.AR THAT THE ISSUE WAS ONLY AGAINST THE RE-OPENING OF THE ASSESSMENTS. 4.2 IT WAS SUBMITTED BY THE LD.DR THAT THE ISSUES I N RESPECT OF THE STUDENT PASSES WERE THAT THE ASSESSEE HAD DEBITED C ERTAIN SUMS AS EXCEPTIONAL ITEM IN THE P&L A/C. THE SAME WAS QU ESTIONED BY THE AO AND THE ASSESSEE HAD RESPONDED THAT THE ASSESSEE IS PROVIDING PUBLIC TRANSPORT SERVICES AND THE ASSESSEE HAD ISSUED PASS ES TO THE STUDENTS AND RAISED CLAIMS TO THE GOVERNMENT FOR REIMBURSEME NT. THE ACCOUNTING ENTRY IS PASSED BY DEBITING THE RECEIVABLES FROM TH E GOVERNMENT AND CREDITING THE PARTIAL INCOME. THE GOVERNMENT DOES NOT RELEASE FULL CLAIM MADE BY THE ASSESSEES CORPORATION EVERY YEAR. SUB SEQUENTLY, THE GOVERNMENT HAD ISSUED ORDERS TO WRITE OFF THE CLAIM IN RESPECT OF THE PASSES AND THE SAME WAS CLAIMED AS EXCEPTIONAL ITE M IN THE ANNUAL ACCOUNTS. IT WAS SUBMITTED BY THE LD.DR THAT THE B ARE FACTS WERE THAT THE GOVERNMENT OF TAMIL NADU REIMBURSED ONLY 80% OF THE LOSSES ARISING OUT OF THE CONCESSIONAL BUS PASSES SCHEME. AS THE ASSES SEE WAS NOT GETTING THE REIMBURSEMENT, IT WAS SUBMITTED BY THE LD.DR TH AT, THE ASSESSEE COMPANY NEVER CHALLENGED THE SHORT PAYMENT BY THE G OVERNMENT BUT MEEKLY ACCEPTED WHATEVER PAYMENT WAS MADE BY THE GO VERNMENT, WHICH GAVE RISE TO SUSPICION THAT THE TRANSACTIONS ARE CO LOURABLE IN NATURE. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD DELETED THE SAME BY HOLDING THAT THE SAME HAS BEEN WRITTEN OFF IN THE ASSESSEES BOO KS AS IRRECOVERABLE. IT ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 4 -: WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WA S LIABLE TO BE REVERSED. 4.3 IN REPLY, LD.DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT(A). 4.4 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 4.5 A PERUSAL OF THE ORDER OF THE LD.CIT(A) SHOWS T HAT THE LD.CIT(A) IN PARA NOS.7.2.1 TO 7.2.4 HAS EXAMINED THE DETAILS. THE LD.CIT(A) HAS TAKEN INTO CONSIDERATION THAT THE ASSESSEE HAS WRIT TEN OFF THE AMOUNT AFTER ONLY RECEIVING THE GOVERNMENT ORDER AND CONSE QUENTLY, THE ONLY OPTION AVAILABLE TO THE ASSESSEE IS TO WRITE OFF TH E BALANCE AMOUNTS IN ITS BOOKS. THE LD.CIT(A) HAS FOLLOWED THE PRINCIPLES L AID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF M/S.TRF LTD., WHEREIN IT HAS BEEN HELD THAT AFTER 01.04.1989, IT IS NOT NECESSARY FOR THE ASSES SEE TO ESTABLISH THAT THE DEBT IN FACT, HAS BECOME IRRECOVERABLE. IT IS ENO UGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IN FACT, THE GOVERNMENT ORDER REFERRED TO BY THE LD.CIT(A) CLEA RLY SPECIFIES THAT THE MANAGING DIRECTORS OF ALL THE STATE TRANSPORT UNDER TAKINGS HAD BEEN REQUESTED TO WITHDRAW THEIR REIMBURSEMENT DUES, IF ANY, PAYABLE FROM THE GOVERNMENT FOR THE PERIOD UP TO 2010-11 FROM TH EIR BOOKS OF ACCOUNTS AND TREAT THE CLAIMS OF THE STUDENT CONCESSION REI MBURSEMENT FROM THE GOVERNMENT AS FULLY SETTLED UP TO 2010-11. IN VIEW OF THE GOVERNMENT ORDER AS ALSO IN VIEW OF THE FACT THAT THE REVENUE HAS NOT BEEN ABLE TO ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 5 -: DISLODGE THE FINDINGS OF THE LD.CIT(A), WE FIND NO REASON TO INTERFERE WITH THE SAME, CONSEQUENTLY, GROUND RAISED BY THE REVENU E AGAINST THE ACTION OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE OF TH E EXCEPTIONAL ITEM STANDS DISMISSED. 5.1 IN REGARD TO DISALLOWANCE OF SOCIAL COST, THE S UBSIDY RECEIVED FROM THE GOVERNMENT HAD BEEN DISALLOWED. THE LD.DR SUBM ITTED THAT THE SAME WAS ALSO IN RESPECT OF 100% AND 50% CONCESSION PASS ES ISSUED TO THE STUDENTS DURING THE YEAR 2011-12. IT WAS A SUBMISS ION THAT FACE VALUE OF THE STUDENT PASSES ISSUED WAS NEARLY RS.144.00 CRS. HOWEVER, THE AMOUNT RECEIVED FROM THE STUDENTS WAS ONLY TO AN EX TENT OF RS.1.43 CRS. AND THE AMOUNT REIMBURSED BY THE GOVERNMENT WAS ONL Y RS.79.61 CRS. AND LEAVING THE BALANCE OF RS.62.99 CRS. IT WAS A SUBMISSION THAT THOUGH THE ASSESSEE HAS CLAIMED THAT THE FREE/CONCESSIONAL BUS PASSES SCHEME IS A WELFARE SCHEME OF GOVERNMENT OF TAMIL NADU AND TH E GOVERNMENT HAS TO BEAR THE COST OF THE SCHEME, IT WAS A SUBMISSION THAT THE GOVERNMENT OF TAMIL NADU HAS AVAILED/PURCHASED THE SERVICES OF THE ASSESSEE FOR PROVIDING THE FREE CONCESSIONAL BUS PASS SCHEME BUT HAS NOT FULLY PAID TO THE ASSESSEES COMPANY. HE REITERATED HIS ARGUMENT S AS BEING SIMILAR TO THE ISSUE OF THE DISALLOWANCE OF THE EXCEPTIONAL I TEM. 5.2 IN REPLY, LD.AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT(A). ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 6 -: 5.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 5.4 A PERUSAL OF THE ORDER OF THE LD.CIT(A) AT PARA NO.7.1.1 TO 7.1.10 SHOWS THAT THE LD.CIT(A) HAS TAKEN INTO CONSIDERATI ON THE FACT THAT THE ASSESSEE HAS WRITTEN OFF THE SAID AMOUNT ONLY ON TH E BASIS OF THE GOVERNMENT ORDER ISSUED BY THE STATE GOVERNMENT. T HE LD.CIT(A) HAS TAKEN INTO CONSIDERATION THE FACT THAT THE ASSESSEE IS FULLY OWNED BY THE STATE GOVERNMENT WHO ALSO PROVIDES THE SUBSIDY FUND S AT REDUCED RATE OF INTEREST, ETC., TO THE ASSESSEE AND CONSEQUENTLY, T HE ASSESSEE WOULD NOT HAVE ANY CHOICE, BUT ADHERE TO THE ORDERS/DIRECTION S OF THE STATE GOVERNMENT. FURTHER, THE REVENUE HAS NOT BEEN ABLE TO POINT OUT ANY SPECIFIC DEFECT IN THE FINDINGS OF THE LD.CIT(A). THIS BEING SO, WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE LD.CIT(A ) ON THIS ISSUE AND CONSEQUENTLY, THE SAME IS HELD IN FAVOUR OF THE ASS ESSEE. CONSEQUENTLY, THE APPEALS FILED BY THE REVENUE IN ITA NOS.908 & 1 943 TO 1948/MDS/2017 STAND DISMISSED. 6. IN REGARD TO CROSS OBJECTIONS, IT IS NOTICED THA T THE SAME ARE BARRED BY LIMITATION AND THE ASSESSEE HAS NOT FILED ANY AF FIDAVIT FOR CONDONATION OF THE DELAY. THIS BEING SO, THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED IN LIMINE ON ACCOUNT OF THE DEFECTS. ITA NOS.908 & 1943 TO 1948/MDS/2017 CO NOS.158 TO 161/MDS/2017 :- 7 -: 7. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 30, 2018, AT CHENNAI. SD/ - SD/ - ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) % /JUDICIAL MEMBER /CHENNAI, 4 /DATED: JANUARY 30, 2018. TLN / )%56 76 /COPY TO: 1. ( /APPELLANT 4. 8 /CIT 2. )*( /RESPONDENT 5. 6 )%% /DR 3. 8 ( ) /CIT(A) 6. ' /GF