M/s Yuken India Limited , Kolar V. Deputy Commissioner of Income Tax LTU Circle-1 , Bangalore

ITA 2730/BANG/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0747 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-06-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 15-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: K R VASUDEVAN
• Keywords: Transactions in derivatives; Bad and doubtful debts
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO. 2730/BANG/2017 ASSESSMENT YEAR : 2009-10 M/S YUKEN INDIA LTD., PB NO.05, KOPPATHIMMANAHALLI VILLAGE, H HOSKOTE GRAM PANCHAYAT, LAKKUR HOBLI, MALUR TALUK, KOLAR DISTRICT KARNATAKA-563 130. PAN AAACY 1160 E VS. THE DY. COMMISSIONER OF INCOME-TAX, LTU, CIRCLE-1, BENGALURU. APPELLANT RESPONDENT A SSESSEE BY : SHRI K.R VASUDEVAN, ADVOCATE. RE VENUE BY : SHRI P RIYADARSHI MISHRA , ADDL. CIT(DR) DATE OF HEARING : 2 1 - 0 6 - 202 1 DATE OF PRONOUNCEMENT : 15 - 0 7 - 202 1 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE A GAINST THE ORDER PASSED BY THE LD.CIT(A)-14, BANGALORE FOR ASSESSMEN T YEAR 2009- 10. 2. IT HAS BEEN SUBMITTED THAT THE LD.CIT(A) PASSED ORDER ON THE ISSUES ARISING OUT OF ORDER SECTION 154 BY THE LD.A O. PAGE 2 OF 5 ITA NO.2730/BANG/2017 2.1 HE SUBMITTED THAT THE LD.AO PASSED RECTIFICATIO N ORDER AS THE PROVISION FOR OUTSTANDING DERIVATIVES CONTRACT WRIT TEN BACK AND THE PROVISION FOR DOUBTFUL DEBTS WAS NOT ADDED BACK. TH IS LED TO THE MAT COMPUTATION FOR YEAR UNDER CONSIDERATION. HE SU BMITTED THAT ASSESSEE SHOULD NOT BE PENALISED FOR NON DISCLOSURE OF MAT COMPUTATION FOR ASSESSMENT YEAR 2008-09. IT WAS SUB MITTED THAT THESE PERTAIN TO ASST. YEAR 2008-09. 2.2 THE LD.CIT(A) WHILE REJECTING ASSESSEES ARGUME NT WAS OF THE VIEW THAT THE PROVISIONS DISALLOWED UNDER MAT DOES NOT ARISE FOR YEAR UNDER CONSIDERATION, AS IT PERTAINS TO ASSESSM ENT YEAR 2008- 09. 2.3 AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS IN APPEAL BEFORE US NOW. 2.4 THE LD.AR SUBMITTED THAT, PROVISIONS FOR DERIVA TIVE CONTRACT WAS DISALLOWED IN THE PREVIOUS ASSESSMENT YEAR CONS IDERING IT TO BE CONTINGENT LIABILITY. HE SUBMITTED, THAT DURING THE YEAR UNDER CONSIDERATION THE PROVISION FOR DERIVATIVE CONTRACT WAS WRITTEN BACK SINCE THE SAME WAS DISALLOWED AND THE PREVIOUS YEAR AS A CONTINGENT LIABILITY. HE SUBMITTED THAT, IT OUGHT T O HAVE BEEN CONSIDERED AS DEEMED TO BE DISALLOWED AS AN ASCERTA INED LIABILITY IN ASSESSMENT YEAR 2008-09 EVEN UNDER MAT COMPUTATION AND ACCORDINGLY THE SAME SHOULD BE REDUCED WHILE COMPUT ING THE BOOK PROFITS FOR ASSESSMENT YEAR 2009-10. 2.5 ON THE CONTRARY, LD.SR.DR SUBMITTED THAT THE AS SESSMENT YEAR 2008-09 IS NOT BEFORE CONSIDERATION AND THEREFORE T HE ARGUMENT CANNOT BE AS APPRECIATED. PAGE 3 OF 5 ITA NO.2730/BANG/2017 3. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF RECORDS PLACED BEFORE US. 3.1 ADMITTEDLY, THE PROVISIONS FOR OUTSTANDING DERI VATIVES CONTRACT WRITTEN BACK WAS REDUCED FROM THE BOOK PROFITS FOR ASST. YEAR 2008- 09 CANNOT BE ALLOWED FOR THE REASON THAT THE APPELL ANT WAS ASSESSED TO TAX UNDER THE REGULAR PROVISIONS OF THE ACT FOR ASSESSMENT YEAR 2008-09. IT IS ALSO A FACT THAT FOR ASSESSMENT YEAR 2008-09, THE LD.AO MADE ADDITIONS FOR THE SAID PROVISION UNDER T HE NORMAL PROVISIONS OF THE ACT. IT IS ALSO NOTED THAT MAT P ROVISIONS WERE NOT APPLICABLE TO ASSESSEE IN THE ASST. YEAR 2008-09. HOWEVER THE ARGUMENT OF ASSESSEE TO TREAT IT AS A DEEMED DISALL OWANCE UNDER MAT FOR ASST. YEAR 2008-09 CANT BE ACCEPTED. 3.2 WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE V IEW TAKEN BY THE LD.CIT(A) THAT ANY REVERSAL OF SUCH PROVISION IN A SUBSEQUENT ASSESSMENT YEAR WAS TO BE CONSIDERED AS USUAL TREAT MENT IN TAX, AND THE SAME DOES NOT FALL WITHIN THE AMBIT OF OVE RLOOKING OF STATUTORY PROVISIONS. THIS UNDER NO CIRCUMSTANCES COULD BE DEEMED AS FAILURE TO COMPLIANCE OF STATUTORY PROVIS IONS BY THE LD.AO WHICH COULD BE RECTIFIED U/S 154 OF THE ACT. ACCORDINGLY THE GROUNDS RAISED BY ASSESSEE STANDS D ISMISSED. IN THE RESULT APPEAL FILED BY THE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 15 TH JULY, 2021. SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 15 TH JULY, 2021. PAGE 4 OF 5 ITA NO.2730/BANG/2017 /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE