The Dy. Commissioner of Income Tax, Circle-1(1)(2), Surat V. M/s. J.K. Paper Ltd., Surat

ITA 28/SRT/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5167 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REETESH MISHRA
• Keywords: Depreciation; Rule of consistency
• Section: 143(3); 10(33); 10(33); 147

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI ARJUN LAL SAINI, ACCOUNTANT MEMBER . . ./I.T.A NO.28/AHD/2017, /ASSESSMENT YEAR: 2009-10 (HEARING IN VIRTUAL COURT) DY. COMMISSIONER OF INCOME TAX CIRCLE-1(1)(2), AAYAKAR BHAWAN, MAJURA GATE, SURAT -395001 VS. J.K. PAPER LTD, P.O. CENTRAL PULP MILLS FORT SONGADH, SURAT-394660 [PAN: AAACT6305N] / APPELLANT /RESPONDENT /ASSESSEE BY SHRI SAURABH SUPARKAR SR. ADVOCATE A/WITH MISS URVASHI SODHAN ADVOCATE /REVENUE BY SH. REETESH MISHRA CIT-DR / DATE OF HEARING: 15.04.2021 /PRONOUNCEMENT ON: 15.04.2021 /O R D E R PER PAWAN SINGH, JUDICAL MEMEBR: 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-1, HEREINAFTER REFERRED AS LD.CIT-(A)), SURAT, DATED 22.05.2017 FOR ASSESSMENT YEAR (AY) 2009-10. THE REVENUE HAS RAISED SOLITARY GROUND OF APPEAL WHICH RELATES TO DELETING THE DISALLOWANCE OF RS. 6.78 CRORE MADE ON ACCOUNT OF ADJUSTMENT OF MINIMUM ALTERNATE TAX (MAT) CREDIT ENTITLEMENT WHILE COMPUTING THE BOOK PROFIT. 2. AT THE OUTSET OF HEARING THE SH. SAURABH SOPARKAR LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITS THAT THE GROUND OF APPEAL RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF TRIBUNAL IN ITA NO. 28/SRT/2017 J.K. PAPER LTD (AY 2008-09) 2 ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO. 2156/AHD/2013 DATED 18.10.2016. THE LD SENIOR COUNSEL FOR THE ASSESSEE FURTHER EXPLAINED THAT SIMILAR ADDITIONS WAS MADE BY ASSESSING OFFICER IN EARLIER YEAR, HOWEVER, ON APPEAL BEFORE LD. COMMISSIONER (APPEALS), THE ADDITIONS WERE DELETED. THE REVENUE FILE APPEAL BEFORE TRIBUNAL, WHEREIN THE ORDER OF LD. COMMISSIONER (APPEALS) WAS UPHELD, COPY OF THE ORDER OF TRIBUNAL IN AY 2008-09 IN ITA NO. 2156/AHD/2013 DATED 18.10.2016 IS FILED ON RECORD. THE LD SR COUNSEL SUBMITS THAT THERE IS NO VARIATIONS IN THE FACTS FOR THE YEAR UNDER CONSIDERATION. 3. ON THE CONTRARY SH. REETESH MISHRA LEARNED COMMISSIONER OF INCOME-TAX / DEPARTMENTAL REPRESENTATIVE (CIT-DR) APPEARING FOR THE REVENUE, AFTER GOING THROUGH THE GROUNDS OF APPEAL RAISED BY REVENUE IN THE PRESENT APPEAL AND THE ORDER OF TRIBUNAL FOR AY 2008-09 (SUPRA) SUBMITS THAT HE RELY ON THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND HAVE SEEN THE ORDERS OF THE LOWER AUTHORITIES. THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER DATED 30.11.2016 UNDER SECTION 143(3) READ WITH SECTION 147 MADE DISALLOWANCE OF RS. 6.78 CRORE MADE ON ACCOUNT OF ADJUSTMENT OF MAT CREDIT. THE LD. CIT(A) DELETED THE DISALLOWANCE BY FOLLOWING THE ORDER OF TRIBUNAL FOR AY 2008-09 BY TAKING VIEW THAT IT IS A BINDING ITA NO. 28/SRT/2017 J.K. PAPER LTD (AY 2008-09) 3 PRECEDENT. WE HAVE SEEN THAT SIMILAR DISALLOWANCE WAS MADE BY ASSESSING OFFICE IN AY 2008-09, WHICH WAS DELETED BY LD. CIT(A) AND ON FURTHER APPEAL BY REVENUE BEFORE THE TRIBUNAL, THE ORDER OF LD. CIT(A) WAS UPHELD IN ITA NO. 2156/AHD/2013 DATED 18.10.2016. RELEVANT PART OF THE ORDER IS EXTRACTED BELOW; 21.WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. LET US FIRST EXAMINE HOW THE ASSESSEE HAS SHOWN PROFIT BEFORE TAX IN ITS PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2008, THE SAME READS AS UNDER:- PROFIT BEFORE DEPRECIATION & TAX 10,578.03 12,250.44 DEPRECIATION 18 5,883.56 4,961.29 PROFIT BEFORE TAX 4,694.47 7,289.15 PROVISION FOR CURRENT TAX 741.02 550.80 PROVISION FOR FRINGE BENEFIT TAX 135.55 105.00 MAT CREDIT ENTITLEMENT (613.85) (550.80) PROFIT BEFORE DEFERRED TAX 4,431.75 7,184.15 PROVISION FOR DEFERRED TAX 254.71 2,378.38 PROFIT AFTER TAX 4,177.04 4,805.77 DEBENTURE REDEMPTION RESERVE WRITTEN BACK 209.54 484.58 SURPLUS BROUGHT FORWARD 9,358.02 5,165.79 13,744.60 10,456.14 22. THE BOOK PROFIT FOR MAT/TAX LIABILITY HAS BEEN COMPUTED AS UNDER:- PARTICULARS ASSESSMENT YEAR 2007-08 2008-09 RETURN FILED ON 30.03.10 A. NET PROFIT AS PER P & L A/C 480574564 417709631 B. ADD: STATUTORY ADDITIONS PROVISION FOR CURRENT TAX 55079728 74101907 PROVISION FOR DEFERRED TAX 237838836 25470312 10500000 13554724 PROVISION FOR FBT -- 45200000 ITA NO. 28/SRT/2017 J.K. PAPER LTD (AY 2008-09) 4 DIMUNITION IN VALUE OF INVESTMENT TOTAL (B) 303418564 158326943 C. TOTAL (A+B) 783993128 5760365574 D. LESS: PERMISSIBLE DEDUCTIONS TRANSFER FROM GENERAL RESERVE -- 69250000 MAT CREDIT ENTITLEMENT 55079728 61384689 10500000 13554724 PROVISION FOR FBT DIVIDEND INCOME EXEMPT U/S. -- 216000 10(33) TOTAL (D) 65579728 144405413 E. BOOK PROFIT (C-D) 718413400 431631161 F. MAT LIABILITY @ 11.33% ON 'E' 80605983 S 48903811 23.IT CAN BE SEEN THAT PROVISION FOR CURRENT TAX IS SHOWN AT RS. 7,41,01,907/- AND MAT CREDIT ENTITLEMENT HAS BEEN SEPARATELY SHOWN AT RS. 6,13,84,689/- IT CAN BE FURTHER SEEN THAT THE PROVISION FOR CURRENT TAX IS SHOWN AT GROSS AMOUNT. THE NET AMOUNT COMES TO RS. 1,27,17,218/-, IF THE MAT CREDIT ENTITLEMENT IS REDUCED FROM PROVISION FOR CURRENT TAX. IF THE ASSESSEE HAD SHOWN THE NET AMOUNT OF RS. 1,27,17,218/- AND ADDED BACK THE SAME FOR THE COMPUTATION OF BOOK PROFIT, THE REVENUE WOULD HAVE ACCEPTED THIS COMPUTATION. BUT FOR THE ACCOUNTING PRINCIPLES AND SET GUIDELINES BOTH THE AMOUNTS WERE SHOWN SEPARATELY. CONSIDERING THESE FACTS IN TOTALITY, WE DO NOT FIND ANY LOGIC IN MAKING THE ADDITION OF RS. 6,13,84,689/- FOR COMPUTING THE BOOK PROFIT; THE SAME HAS TO BE DELETED. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 5. CONSIDERING THE ORDER OF COORDINATE BENCH OF TRIBUNAL ON IDENTICAL ISSUE IN AY 2008-09, WHEREIN NO VARIATION IN FACTS IS BROUGHT TO OUR NOTICE, HENCE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, WE AFFIRM THE ORDER OF LD. CIT(A). RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 28/SRT/2017 J.K. PAPER LTD (AY 2008-09) 5 ORDER WAS PRONOUNCED AT THE TIME OF HEARING ON 15 TH APRIL 2021, WHILE HEARING THE APPEAL IN VIRTUAL MODE. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH ) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER ) / SURAT, DATED : 15 TH APRIL 2021 SELF BY AUTHOR COPY OF ORDER SENT TO:- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT