DCIT, Shimla V. M/s H.P. State Civil Supplies Corporation Ltd., Shimla

ITA 206/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90143 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAJINDER PARSHAD
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO.206/CHD/2015 ASSESSMENT YEAR: 2011-12 DCIT, VS. H.P. STATE CIVIL SUPPLIES CIRCLE CORPORATION LTD. SHIMLA SDA COMPLEX, KASUMPTI SHIMLA PAN NO.AABCH4054K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K.MITTAL RESPONDENT BY : SH. RAJINDER PARSHAD DATE OF HEARING : 19/05/2015 DATE OF PRONOUNCEMENT : 21/05/2015 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 29/12/2014 PASSED BY THE CIT(A), SHIMLA, H.P. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS WHICH ARE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE. THE LEARNED CIT(A) WAS RIGHT DELETING THE ADDITION MADE BY THE A.O. OF RS. 43,55 ,640/- ON ACCOUNT OF HANDLING CHARGES @ OF RS. 1/-PER BAG WHICH WAS PAYABLE TO HI MACHAL GOVT. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) B E SET-ASIDE AND THAT OF THE A.O. RESTORED. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAD RECEIVED A TOTAL AMOUNT OF RS. 63,53,460/-@ RS. 1.50/- PER BAG ON ACCOUNT OF HANDL ING CHARGES OF CEMENT BAG FROM GOVERNMENT SUPPLIES AGAINST WHICH INCOME OF RS . 21,77,820/- HAS BEEN INCLUDED IN THE TOTAL INCOME. HOWEVER, THE BALANCE AMOUNT OF RS. 43,55,640/- @ 2 RS. 1.00 PER BAG HAS BEEN ADDED TO WORKING CAPITAL ADVANCE AS PER THE INSTRUCTIONS OF THE GOVERNMENT OF HIMACHAL PRADESH AND NOT OFFERED FOR TAXATION. ASSESSEE WAS ASKED TO JUSTIFY FOR NOT OFF ERING TO TAXATION THE SUM OF RS. 43,55,640. IN RESPONSE IT WAS STATED AS UNDER : THE HANDLING CHARGES @ RS.1/- PER CEMENT BAG, WHI CH AMOUNTED TO RS. 43,55,640.00 IN THE CURRENT YEAR, ARE PAYABLE TO TH E HP GOVT. THIS IS AN ASCERTAINED & ADMITTED LIABILITY WHICH HAS BEEN DUL Y REFLECTED IN THE BOOKS OF ACCOUNTS. THE LIABILITY ALSO STANDS DISCHARGED IN T HE SUBSEQUENT YEARS. THE HANDLING CHARGES @RS. 0.50 PER CEMENT BAGS WHIC H AMOUNTED TO RS. 21,77,820.00 IN CURRENT YEAR, FOR WHICH CORPORATION IS ENTITLED, HAS ALREADY BEEN ACCOUNTED AS INCOME AND CREDITED TO THE PROFIT & LO SS A/C. IT IS PRESENT TO MENTION THAT IN DIFFERENT EARLIER YEARS, THE ISSUE OF HANDLING CHARGES @RS.1/- PER CEMENT BAG PAYABLE TO THE H.P. GOVT., H AS GONE TO THE CIT(A) AND ITAT AND IT HAS BEEN FINALLY ACCEPTED THAT HANDLING CHARGES @ RS. 1/- PER BAG IS AN ASCERTAINED LIABILITY AND NOT THE INCOME OF THE CORPORATION. FINALLY IN DIFFERENT YEARS, AT THE INSTRUCTIONS OF ITAT/CIT(A), THE ADDI TIONS MADE BY THE ASSESSING OFFICER HAVE ALREADY BEEN DELETED AND CONSEQUENT RE FUNDS HAVE ALSO BEEN GRANTED TO THE ASSESSEE. IT IS ALSO PERTINENT TO MENTION THAT WHILE MAKING A SSESSMENT ORDER U/S 143(3) FOR ASSESSMENT YEAR 2010-11 DATED 19.03.2013 ON ADDITI ON ON THIS ACCOUNT HAS BEEN MADE BY THE ASSESSING OFFICER DUE TO THE FACT THAT ADDITION MADE IN THE EARLIER YEARS HAVE BEEN DELETED IN APPELLATE PROCEEDINGS, T HE REFUNDS HAVE ALSO BEEN GRANTED AND LIABILITY ALSO STANDS DISCHARGED. AS PLEADED IN THE ASSESSMENT PROCEEDINGS, WE ONCE A GAIN SUBMIT THAT THERE IS NO JUSTIFICATION FOR MAKING THIS ADDITION OF RS. 43 ,55,640/- IN THE CURRENT YEAR AS THIS IS NOT INCOME OF THE CORPORATION BUT IT IS ASCERTAI NED & ADMITTED LIABILITY PAYABLE TO THE HP GOVT. WHICH HAS BEEN DULY REFLECTED IN TH E BOOKS OF ACCOUNTS. 4. AO NOTED THAT INITIALLY THIS MATTER WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE REVENUE FOR ASSESSMENT YEAR 2002-03, 2003-04 & 2004-05. HOWEVER, LATER ON IT WAS HELD THAT AMOUNT REPRESENTS ASCERTAINED LIAB ILITY PAYABLE TO STATE GOVERNMENT AND ISSUE WAS DECIDED IN FAVOUR OF THE A SSESSEE. SINCE REVENUE HAS FILED AN APPEAL BEFORE THE HIGH COURT THEREFORE HE MADE AN ADDITION OF RS. 43,55,640. 5. ON APPEAL IT WAS MAINLY STATED THAT ISSUE IS COV ERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF TRIBUNAL. THE LD. CIT(A) A GREED WITH THESE CONTENTIONS AND FOLLOWED THE ORDER OF TRIBUNAL FOR ASSESSMENT Y EAR 2009-10 IN ITA NO. 836/CHD/2012 AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. BEFORE US LD. DR SUPPORTED THE ORDER OF AO. 7. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T RIBUNAL. 3 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y WE FIND THAT THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE V IDE PARA 4 & 5 IN ITA NO. 836/CHD/2012 WHICH READS AS UNDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDE RED FACTS OF THE CASE AND THE RELEVANT RECORDS AND FOUND FROM THE FACTS O F THE CASE AS RECORDED BY THE CIT(APPEALS) IN PARA 4.1 OF THE IMPUGNED ORDER THAT THE AO OBSERVED THEREIN THAT APPEAL OF THE REVENUE, AGAINST THE DECISION OF THE TRIBUNAL, ON THE ISSUE IS PENDING FOR ADJUDICATION WITH HONBLE HIMACHAL PRAD ESH HIGH COURT. THIS LED THE AO, TO MAKE SUCH ADDITION. THE RELEVANT FINDINGS OF THE CIT(APPEALS) ARE REPRODUCED HEREUNDER : 5. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSI DERED WITH REFERENCE TO THE FACTS OF THE CASE. IT IS NOTED THAT THE ISSUE ALREA DY STANDS DECIDED IN FAVOUR OF THE APPELLANT BY THE HONBLE ITAT. CHANDIGARH BENCH FOR THE A.YS 2005-06 & 2006-07. THE ISSUE HAS ALSO BEEN DECIDED IN FAVOUR OF THE AP PELLANT BY THE CIT(A), SHIMLA FOR THE A.YS 2002-03, 2003-04 & 2004-05. IT HAS BEE N HELD THAT THE CONVERSION OF THE HANDLING CHARGES INTO THE WORKING CAPITAL ADVAN CE AND UNSECURED LOANS PROVES THAT THE RECEIPT IS IN THE NATURE OF AN ASCE RTAINED LIABILITY AND HAS BEEN RIGHTLY SHOWN AS SUCH IN THE BALANCE SHEET BY THE A PPELLANT. IT IS NOTED THAT THE APPELLANT IS UNDER AN OBLIGATION TO REMIT THE AMOUN T OF HANDLING CHARGES TO THE GOVT OF HIMACHAL PRADESH @ RS. 1 PER BAG OF CEMENT. AS REGARDS THE REMAINING COLLECTION OF HANDLING CHARGES TO THE EXTENT OF RS. 0.50 PER BAG, THE APPELLANT HAS DULY SHOWN THE INCOME TO THAT EXTENT. KEEPING I N VIEW THE HISTORY OF THE CASE AND THE DECISIONS OF THE CIT(A), SHIMLA AND THE ITA T ON THE GIVEN ISSUE FOR THE A.YS 2002-03 TO 2006-07, IT IS HELD THAT THE LD. A.O. IS NOT JUSTIFIED IN TREATING THE HANDLING CHARGES OF RS. 27,85,502/- AS THE TAXABLE INCOME OF THE APPELLANT. 5. HAVING REGARD TO THE ABOVE RIVAL SUBMISSIONS, FA CTS OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISIONS OF THE TRIBUNAL, AS MENTION ED ABOVE, AS ALSO THE FINDINGS RECORDED BY CIT(APPEALS), THE APPEAL OF THE REVENUE IS DISMISSED . FOLLOWING THE ABOVE ORDER WE DECIDED THIS ISSUE AGA INST THE REVENUE. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 21/05/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21/05/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR