Empee Breweroes Ltd., Thiruvallur V. DCIT, CHENNAI

ITA 2590/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4732 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: D ANAND
• Keywords: Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2677/MDS/2016 * +* / ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), CHENNAI - 600 034. V. M/S EMPEE BREWERIES LTD., NO.788/2, KUTHAMBAKKAM, THIRUMAZHISAI, TIRUVALLUR DT., TAMIL NADU 602 107. PAN : AAACE 9764 A (-./ APPELLANT) (/0-./ RESPONDENT) ./ ITA NO.2590/MDS/2016 * +* / ASSESSMENT YEAR : 2008-09 M/S EMPEE BREWERIES LTD., NO.788/2, KUTHAMBAKKAM, THIRUMAZHISAI, TIRUVALLUR DT., TAMIL NADU 602 107. V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) 1 2 3 /REVENUE BY : SHRI SHIVA SRINIVAS, JCIT *45 2 3 /ASSESSEE BY : SHRI D. ANAND, ADVOCATE ' 2 5& / DATE OF HEARING : 13.04.2017 67+ 2 5& / DATE OF PRONOUNCEMENT : 28.04.2017 2 I.T.A. NO.2677 & 2590/MDS16 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE REVENUE AND ASSESSEE ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -6, CHENNAI, DATED 13.07.2016 AND PERTAIN TO ASSESSMENT YEAR 2008-09. THEREFORE, WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE-COMPANY IS ENGAGED IN T HE BUSINESS OF MANUFACTURE OF INDIAN-MADE FOREIGN LIQUOR AND IT IS SUPPLYING THE SAME TO TAMIL NADU STATE MARKETING CORPORATION. TH E LD. D.R. SUBMITTED THAT THE ASSESSEE IS CLAIMING MARKETING A ND PROMOTION EXPENSES DURING THE YEAR UNDER CONSIDERATION. THE EXPENSES WERE ON ACCOUNT OF PURCHASE OF GIFT ARTICLES WHICH WERE SAID TO BE GIVEN TO CUSTOMERS AT THE RETAIL SHOPS OF TAMIL NADU STAT E MARKETING CORPORATION. ACCORDING TO THE LD. D.R., FOR THE AS SESSMENT YEAR 2010-11, SIMILAR PROMOTION EXPENSES WERE CLAIMED AN D THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE BY AN ELABORATE ORDER. THIS YEAR, THE ASSESSEE CHANGED T HE COMPANY FROM WHICH THE PROMOTION ARTICLES SAID TO HAVE BEEN PURCHASED. 3 I.T.A. NO.2677 & 2590/MDS16 ACCORDING TO THE LD. D.R., SINCE THE COMPANY WAS CH ANGED, THE ASSESSING OFFICER BY FOLLOWING HIS OWN ORDER, DISAL LOWED THE CLAIM OF THE ASSESSEE. ON APPEAL BY THE ASSESSEE, THE CIT(A PPEALS) BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN THE ASSESSE E'S OWN CASE FOR ASSESSMENT YEAR 2010-11, RESTRICTED THE DISALLOWANC E TO 7.5% OF TOTAL CLAIM AND HE BALANCE 92.5% WAS ALLOWED. ACCO RDING TO THE LD. D.R., THE ASSESSEE HAS FILED THE APPEAL IN RESPECT OF DISALLOWANCE MADE BY THE CIT(APPEALS) TO THE EXTENT OF 7.5% OF T HE TOTAL CLAIM AND THE REVENUE HAS FILED THE APPEAL AGAINST THE DI RECTION OF THE CIT(APPEALS) TO ALLOW SALES PROMOTION EXPENSES TO T HE EXTENT OF 92.5%. ACCORDING TO THE LD. D.R., THERE IS NO JUST IFICATION ON THE PART OF THE CIT(APPEALS) TO ALLOW THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 92.5%. 3. ON THE CONTRARY, SHRI D. ANAND, THE LD.COUNSEL F OR THE ASSESSEE, SUBMITTED THAT AN IDENTICAL ISSUE CAME BE FORE THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER, IN FACT, DISALLOWED THE CLAI M OF THE ASSESSEE FOR THE SAME REASON WHICH WAS RECORDED FOR THE ASSE SSMENT YEAR 2010-11. ACCORDING TO THE LD. COUNSEL, AN IDENTICA L ISSUE ALSO CAME BEFORE THIS TRIBUNAL FOR ASSESSMENT YEARS 2003-04 A ND 2004-05. 4 I.T.A. NO.2677 & 2590/MDS16 AFTER CONSIDERING THE CLAIM OF THE ASSESSEE AND CON TENTION OF THE REVENUE, THIS TRIBUNAL FOUND THAT THERE WAS A POSSI BILITY OF EXCESSIVE CLAIM. ACCORDINGLY A SIMILAR ORDER PASSE D BY THE CIT(APPEALS) WAS CONFIRMED AND DISALLOWANCE WAS RES TRICTED TO 7.5%. IN FACT, ACCORDING TO THE LD. COUNSEL, THIS TRIBUNAL CAME TO A CONCLUSION THAT THE CIT(APPEALS) AFTER EXAMINING TH E MATERIAL AVAILABLE ON RECORD CAME TO A REASONABLE CONCLUSION . THE CIT(APPEALS) AFTER REPRODUCING THE ORDER OF THIS TR IBUNAL, IN FACT, ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, ACCO RDING TO THE LD. COUNSEL, THERE IS NO MERIT IN THE APPEAL OF THE REV ENUE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE DISALLOWANCE OF SALES PROMOTION EXPENSES WAS CONSID ERED BY THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2010-11, 2003-04 AND 2004-05. IN FACT, THE ASSESSEE IS MANUFACTURING INDIAN-MADE FOREIGN LIQUOR AND SUPPLYING THE SAME TO TAMIL NADU STATE MARKETIN G CORPORATION. TAMIL NADU STATE MARKETING CORPORATION, IN TURN, IS SELLING THE SAME TO THE CUSTOMERS THROUGH RETAIL OUTLETS ACROSS THE STATE. FOR THE PURPOSE OF PROMOTING INDIAN-MADE FOREIGN LIQUOR MAN UFACTURED BY ASSESSEE-COMPANY, THEY ARE SUPPLYING SOME GIFT ARTI CLES TO THE 5 I.T.A. NO.2677 & 2590/MDS16 CUSTOMERS AT THE RETAIL VENDING SHOPS. THE ASSESSE E CLAIMED THE EXPENDITURE WHILE COMPUTING THE TOTAL INCOME. IN F ACT, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON VARIOUS REASONS. THE CIT(APPEALS) FOR THE ASSESSMENT YEARS 2010-11, 2003-04 AND 2004-05, ALLOWED THE CLAIM OF THE ASSES SEE HOLDING THAT IT IS AN EXPENDITURE FOR THE PURPOSE OF BUSINE SS. THE ORDERS OF THE CIT(APPEALS) FOR ASSESSMENT YEARS 2003-04, 2004 -05 AND 2010-11 WERE, IN FACT, CONFIRMED BY THIS TRIBUNAL I N I.T.A. NO.2162, 2647, 2648 AND 2649/MDS/2014 BY ORDER DATED 25.03.2 015. IN FACT, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE CI T(APPEALS) FOLLOWED THE ORDER OF THIS TRIBUNAL FOR ASSESSMENT YEARS 2003-04, 2004-05 AND 2010-11. 5. SINCE THE CIT(APPEALS) HAS FOLLOWED THE ORDER OF THIS TRIBUNAL AND RESTRICTED THE DISALLOWANCE TO 7.5% AN D ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 92.5%, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A ND ASSESSEE ARE DISMISSED. 6 I.T.A. NO.2677 & 2590/MDS16 ORDER PRONOUNCED ON 28 TH APRIL, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 9 /DATED, THE 28 TH APRIL, 2017. KRI. 2 /5#: ;:+5 /COPY TO: 1. *45 /ASSESSEE 2. /0-. /RESPONDENT 3. ' <5 () /CIT(A)-6, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI 5. := /5 /DR 6. * > /GF.