M/s. Yash Enterprises, Baroda V. The Income Tax Officer, Ward-2(6), Baroda

ITA 2317/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94553 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA NO: 2317/AHD/2014 (ASSESSMENT YEAR: 2008-09) M/S. YASH ENTERPRISES 203, HALIX COMPLEX, OPP.SURYA HOTEL, SAYAJIGUNJ, VADODARA V/S INCOME TAX OFFICER, WARD- 2 (6), BARODA (APPELLANT) (RESPONDENT) PAN: AAAFY1171A APPELLANT BY : SHRI SUNIL TALATI, AR RESPONDENT BY: SHRI PRADIPKUMAR MAJUMDAR, SR. D.R . ( )/ ORDER DATE OF HEARING : 14-10-2015 DATE OF PRONOUNCEMENT : 21-10-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-II, BARODA DATED 23.05.2014 FOR A.Y. 2008-09. ITA NO 2317 /AHD/2014 . A.Y. 2008-0 9 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF HIGH SEAS SALE OF MERCHANDISE AND LOCAL TRADING IN IMPOR TED MERCHANDISE. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2008- 09 ON 08.08.2008 DECLARING TOTAL INCOME OF RS. 4,513/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 28.10.2010 AND THE TOTAL INCOME WAS DETERMINED AT R S. 4,32,380/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 23.05.2014 DECIDED THE ISSUE AGAINST THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. C IT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GR OUNDS:- 1. THE ORDER PASSED BY THE HON'BLE CIT(A) IS BAD IN LA W, CONTRARY TO LEGAL PRONOUNCEMENTS AND SAME BE QUASHED. THE DISALLOWANC ES/ADDITIONS ARE UNWARRANTED AND SAME BE DELETED NOW. 2. THE HON'BLE CIT(A) HAS ERRED IN CONFIRMING THE ADDI TIONS OF RS. 4,00,763/- MADE BY THE AO ON THE GROUND THAT CUSTOM DUTY RECEIVABLE IS NOT ACCOUNTED IN THE PREVIOUS YEAR. YOUR APPELLANT SUBMITS THAT THE SAME IS RIGHTLY ACCOUNTED FOR IN THE YEAR WHEN IT BECAME DUE AND RECEIVED. HENCE THE ADDITION MADE BY THE AO AND CONFIRM BY TH E HON'BLE CIT(A) IS NOT JUSTIFIED. IT BE HELD SO NOW AND AO BE DIRECTED ACCORDINGLY. 3. THE HONBLE CIT(A) HAS ERRED IN CONFIRMING THE CHAR GING OF INTEREST U/S. 234/B/C/D. IT IS SUBMITTED THAT CHARGING OF INTERES T IS INCORRECT, INVALID AND NOT JUSTIFIED. IT BE HELD SO NOW AND A.O BE DIR ECTED ACCORDINGLY. ITA NO 2317 /AHD/2014 . A.Y. 2008-0 9 3 4. BEFORE US, LD. A.R. AT THE OUTSET SUBMITTED THAT TH E ONLY EFFECTIVE GROUND IS WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF CUS TOM DUTY RECEIVABLE. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE HAD SHOWN RS. 4,00,763/- AS CUSTOM DUTY RECEIVABLE BU T THE SAME WAS NOT REFLECTED IN THE PROFIT AND LOSS ACCOUNT THOUGH THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. HE WAS THEREFORE O F THE VIEW THAT THE CUSTOM DUTY RECEIVABLE SHOULD BE CONSIDERED AS IN COME AND ACCORDINGLY MADE ADDITION OF RS. 4,00,763/-. AGGRIEVED BY THE O RDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO DECIDED TH E ISSUE BY HOLDING AS UNDER:- 5.3I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. THE APPELLANT HAS SUBMITTED THAT THIS ISSUE WAS RAISED BEFORE THE CIT -1, BARODA (WRONGLY MENTIONED AS CIT-I, BARODA IN HIS SUBMISSION), WHO AFTER CALLING FOR A DETAILED REPORT FROM THE AO REJECTED THE PETITION O F THE APPELLANT FILED U/S 264 OF THE ACT, COPY OF THE CIT-L, .BARODA'S ORDER DATED 04.02.2013 IS ALSO PLACED BEFORE ME. FROM THE ORDER, IT TRANSPIRES THA T THE OBJECTION OF THE ASSESSES HAVE DULY BEEN CONSIDERED THERE. UNDER THE SE CIRCUMSTANCES, THE GROUND TAKEN BY THE ASSESSEE CANNOT BE ALLOWED AND THE SAME IS DELETED. 6. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), AS SESSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION SINCE THE ITA NO 2317 /AHD/2014 . A.Y. 2008-0 9 4 AMOUNT OF DUTY RECEIVABLE WAS NOT RECEIVED, IT WAS NOT CONSIDERED AS INCOME. HE POINTED TO THE REFUND ORDER ISSUED BY TH E OFFICE OF COMMISSIONER CUSTOMS, THE COPY OF BANK STATEMENT AND THE CHEQUE AND FROM IT HE POINTED OUT THAT THE AMOUNT OF RS. 4,00,763/- WAS IN FACT R ECEIVED IN A.Y. 09-10 AND WAS THEREFORE ACCOUNTED FOR IN A.Y. 09-10 AND THE T AXES WERE ALSO PAID. HE FURTHER SUBMITTED THAT THE AMOUNT CAN ONLY BE TAXED IN THE YEAR IN WHICH THE RIGHT TO RECEIVE THE AMOUNT IS ESTABLISHED. HE FURT HER SUBMITTED THAT TAXING THE SAME INCOME IN A.Y. 09-10 AND IN A.Y. 08-09 AMO UNTS TO DOUBLE TAXABLE. HE THEREFORE SUBMITTED THAT THE ADDITION B E DELETED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE TA XING OF CUSTOM DUTY RECEIVABLE OF RS. 4,00,763/- IT IS ASSESSEES SUBMI SSION THAT THE AMOUNT WAS RECEIVED IN A.Y. 09-10 AND HAS BEEN OFFERED FOR TAX IN A.Y. 09-10 AND FOR WHICH ASSESSEE HAS PLACED ON RECORD THE COPY OF THE REFUND ORDER, THE CHEQUE AND THE COMPUTATION OF INCOME FOR A.Y. 09-10 . THE AFORESAID SUBMISSIONS OF THE ASSESSEE HAVE NOT BEEN CONTROVER TED BY REVENUE. FURTHER IT IS A SETTLED LAW THAT INCOME ACCRUES WHEN IT BEC OMES DUE ACCOMPANIED BY A CORRESPONDING LIABILITY OF THE OTHER PARTY TO PAY THE AMOUNT AND THEN ONLY IT CAN BE SAID THAT THE INCOME HAS ACCRUED TO THE A SSESSEE. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DE MONSTRATE THAT THE RIGHT OF ASSESSEE TO RECEIVE THE AMOUNT OF CUSTOM DUTY WA S ESTABLISHED IN THE YEAR UNDER CONSIDERATION. CONSIDERING THE AFORESAID FACT S, WE ARE OF THE VIEW THAT THE ADDITION MADE ON ACCOUNT OF CUSTOM DUTY RECEIVA BLE OF RS. 4,00,763/- IS NOT CALLED FOR MORE SO WHEN THE SAME AMOUNT HAS BEE N OFFERED TO TAX BY THE ITA NO 2317 /AHD/2014 . A.Y. 2008-0 9 5 ASSESSEE IN A.Y. 09-10. WE THEREFORE DIRECT ITS DEL ETION. THUS THIS GROUND OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 21- 10 - 2015. SD/- SD/- (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD