ACIT, Coimbatore V. The Coimbatore District Co-operative Milk Producer's Union Ltd., Coimbatore

ITA 2002/CHNY/2011

• Counselvise Citation: 200221714 RSA 2011
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Assessee Lawyers: K RAGHU
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.2002(MDS)/2011 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE II, COIMBATORE. VS. THE COIMBATORE DISTRICT CO- OPERATIVE MILK PRODUCERS UNION LTD., PACHAPALAYAM, KALAMPALAYAM POST, PERUR, COIMBATORE-641 010. PAN AAAAT7787L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RA I, IRS, CIT RESPONDENT BY : SHRI K.RAGHU, C.A. DATE OF HEARING : 22 ND NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 26 TH NOVEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I AT COIMBATORE, DATED 28-9-2011 AND ARISES OUT OF THE A SSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961. - - ITA 2002 OF 2011 2 2. THE GROUNDS RAISED BY THE REVENUE ARE EXTRACTED BELOW:- 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE BY TH E ASSESSING OFFICER ON THE GROUND THAT ADDITIONAL PRI CE PAYABLE TO FARMERS/MILK VENDORS WAS AN ASCERTAINED LIABILITY WHICH GOT CRYSTALLIZED DURING THE ASSESSM ENT YEAR. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE OBSERVED THAT THE DECISION TO PAY ADDITIONAL PRICE TO THE FARMERS WAS OBSERVED BY THE STATUTORY AUDITOR ON 06/03/2008 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE OBSERVED THAT THE ASSESSEE CONCERN DECIDED TO INCREASE THE PROCUREMENT PRICE O F MILK TO REDUCE THE NET PROFIT, IN ORDER TO AVOID IN COME TAX LIABILITY. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE OBSERVED THAT THE LIABILITY IS - - ITA 2002 OF 2011 3 NOT AN ASCERTAINED ONE BUT IT CONTINGENT UPON HAPPENING OF AN EVENT. 3. WE HEARD BOTH SIDES IN DETAIL. IT IS A FACT TH AT THE ASSESSEE HAD INCREASED THE PROCUREMENT PRICE OF MIL K. APPROVAL FROM THE STATE GOVERNMENT WAS PROCEDURAL IN NATURE. EVEN IF NOT PROCEDURAL, FOR SUBSTANTIVE IT IS TO BE SEEN TH AT THE GOVERNMENT HAD ALREADY APPROVED IT. THE ONLY POINT IS THAT THE APPROVAL DID NOT COME IN THE RELEVANT PREVIOUS YEAR ITSELF. THE APPROVAL CAME SUBSEQUENTLY AND ON THE BASIS OF THAT APPROVAL THE ASSESSEE HAD PAID ADDITIONAL PROCUREMENT PRICE TO THE MILK VENDORS AFTER TWO YEARS. IT IS TO BE SEEN THAT THE QUANTUM OF LIABILITY WAS WELL ASCERTAINED BY THE ASSESSEE. TH EREFORE, IT IS NOT POSSIBLE TO HOLD THAT IT WAS A CONTINGENT LIABI LITY. THE LIABILITY WAS AN ASCERTAINED LIABILITY BUT NOT PAID DURING TH E PREVIOUS YEAR. THE APPROVAL OF THE GOVERNMENT ALSO WAS OBTAINED WI THIN A REASONABLE TIME AND WITHOUT ANY DELAY THE ADDITIONA L PAYMENTS WERE DISBURSED BY THE ASSESSEE. THEREFORE, WE FIND THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO GRANT DEDUCTION FOR THE ADDITI ONAL PROCUREMENT PRICE PAID BY THE ASSESSEE IN ITS PROFI T AND LOSS - - ITA 2002 OF 2011 4 ACCOUNT. THERE IS NO GROUND TO HOLD THE SAME AS IN THE NATURE OF A PROVISION. 4. THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDERS PRONOUNCED ON MONDAY, THE 26 TH OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 26 TH NOVEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.