Neptune Overseas Ltd., Ahmedabad V. The Dy.CIT.,Range-5, Ahmedabad

ITA 2977/AHD/2010

• Counselvise Citation: 297720514 RSA 2010
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: PF JAIN
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI T.R. MEEN A, ACCOUNTANT MEMBER NEPTUNE OVERSEAS LTD 1, 4 TH FLOOR H.K. HOUSE ASHRAM RAOD AHMEDABAD PAN AAACN5163C (APPELLANT) VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE -5 AHMEDABAD (RESPONDENT) REVENUE BY : SRI Y.P. VERMA, SR. D.R. ASSESSEE BY : SRI P.F. JAIN, A.R. DATE OF HEARING : 13-12-2012 DATE OF PRONOUNCEMENT : 21-12-2012 / ORDER PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:- THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LD. CIT(A) XVI AHMEDABAD DATED 01-09-2010 AND THE GROU ND AS PER THE CONCISE GROUND IS AS UNDER:- ITA NO. 2977/AHD/2010 A.Y.:-2007-08 ITA NO.2977 /AHD/2010 A.Y. 2007-08 PAGE NO NEPTUNE OVERSEAS LTD. VS. DCIT 2 1. THE LEARNED HONBLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS. 7 LACS PAID DURING THE YEAR PURSUANT TO ORDER OF GUJRAT SALES TAX TRIB UNAL, AHMEDABAD. 2. THE LEARNED CIT(A) SOUGHT TO HAVE ACCEPTED THE C LAIM OF THE APPELLANT FOR ALLOWING DEDUCTION OF PAYMENT OF SALES TAX OF RS. 7 LACS AS PER PROVISION OF SECTION 43 B OF THE I.T. ACT. 2. FACTS IN BRIEF IN RESPECT OF THE ISSUE AS EMERGE D FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) DA TED 20 TH JULY, 2009 WERE THAT THE ASSESSEE-COMPANY HAS CLAIMED SALES TAX EXP ENDITURE OF RS. 7,00,000/-. IT WAS NOTED THAT THE CLAIM HAD BEEN M ADE ON PAYMENT BASIS. AS PER THE AO, THE AMOUNT PERTAINED TO THE ACCOUNTING PERIOD OF 1998-99 AND 1999-2000. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LD. CIT(A) HAD MADE AN OBSERVATION THAT THE SAID A MOUNT IN QUESTION PERTAINED TO THE FINANCIAL YEARS 1999-2000 AND FURT HER THE ASSESSEE HAD NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT TH E SAID LIABILITY CRYSTALLIZED DURING THE YEAR. THE LD. CIT(A) HAS ALSO OBSERVED THAT ON ACCOUNT OF AN ORDER OF THE SALES TAX TRIBUNAL WHICH WAS RECEIVED ON 30 TH APRIL, 2004 THE ITAT IN THE PAST HAS ALLOWED THE CLAIM ON THAT BASI S, BUT IT WAS CONCLUDED THAT IN THE ABSENCE OF ANY EVIDENCE ON RECORD THE C LAIM WAS NOT TO BE ALLOWED. 3. NOW, BEFORE US AN ORDER OF THE GUJRAT SALES TAX TRIBUNAL AHMEDABAD (SECOND APPEAL NOS. 239 TO 241 OF 2006) DATED 2 ND MAY, 2006 HAS BEEN PLACED ON RECORD ACCORDING TO WHICH THE ASSESSEE WA S DIRECTED TO MAKE A PAYMENT OF RS. 2,00,000 AND RS. 5,00,000 BY 12 TH OF JUNE,2006. THE ASSESSEE HAS ALSO FURNISHED PHOTOCOPY OF THE CHALAN S IN SUPPORT OF THE PAYMENT. IT IS ALSO PLACED ON RECORD THAT ON IDENT ICAL FACTS IN THE PAST ITAT ITA NO.2977 /AHD/2010 A.Y. 2007-08 PAGE NO NEPTUNE OVERSEAS LTD. VS. DCIT 3 B BENCH, AHMEDABAD IN ASSESSEES OWN CASE FOR A.Y . 05-06 ITA NO. 4391/AHD/2007 VIDE AN ORDER DATED 22 ND MAY, 2009 HAS HELD AS UNDER:- 3. WE HAVE HEARD THE DR AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE PAID SALES TAX OF RS.50 LAKHS UNDER P ROTEST DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2004-05 A ND SHOWED THE SAME IN THE BALANCE SHEET AS PAYMENTS MADE TO SALES TAX DEPARTMENT. HOWEVER, ON 30/4/2004 THE ASSESSEE RECEIVED ORDER O F THE SALES TAX TRIBUNAL QUANTIFYING AND CRYSTALLIZING THE LIABILIT Y OF THE ASSESSEE. THEREFORE, THE ASSESSEE CLAIMED THE AMOUNT OF RS.50 LAKHS PAID ON 30/3/2004 AS AN EXPENDITURE BY DEBITING THE SAID A MOUNT TO THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER DISALLOWED DE DUCTION TO THE ASSESSEE ON THE GROUND THAT IT WAS PAID IN THE PRE VIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2004-05 AND NOT IN ASSESSMEN T YEAR 2005-06. IN APPEAL THE LD. CIT(APPEALS) ALLOWED THE DEDUCTIO N TO THE ASSESSEE ON THE GROUND THAT THE LIABILITY FOR SALES TAX HAS CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. THE LD. DEPARTMENTAL REPRESENTATIVE ARGUED THAT SINCE THE PAYMENT OF SALES-TAX WAS MADE IN THE PREVIOUS RELEVANT ASSESSMENT YEAR 2004-05, THEREFORE ACCORDI NG TO THE PROVISIONS OF SECTION OF SECTION 43B THE SAME IS AL LOWABLE DEDUCTION IN THE ASSESSMENT YEAR 2004-05 AND NOT IN THE ASSES SMENT YEAR 2005- 06. ON THE OTHER HAND THE LD. AUTHORIZED REPRESENTA TIVE OF THE ASSESSEE FILED AN ADJOURNMENT APPLICATION WHICH WAS REJECTED BY THE BENCH AND APPEAL WAS HEARD EX-PARTE QUA THE RESPOND ENT ASSESSEE. WE FIND THAT THE LD. CIT(APPEALS) HAS GIVEN A FINDI NG THAT THE PAYMENT WAS MADE IN THE FINANCIAL YEAR 2003-04 UNDER PROTE ST TO THE SALES- TAX DEPARTMENT AS THE APPEAL FILED BEFORE THE SALES -TAX TRIBUNAL BY THE ASSESSEE WAS PENDING. THE LD. CIT(APPEALS) HAS ALSO GIVEN A FINDING THAT THE ASSESSEE HAS NOT CLAIMED THE AMOUNT OF RS. 50 LAKHS AS AN EXPENDITURE IN THE ASSESSMENT YEAR 2004-05. FURTHER THE LD. CIT(APPEALS) OBSERVED THAT THE ORDER OF THE SALES T AX TRIBUNAL WAS RECEIVED BY THE ASSESSEE ON 30/04/2004 AND, HENCE, THE LIABILITY FOR SALES TAX PAYABLE BY THE ASSESSEE CRYSTALLIZED IN T HE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2005-06. THEREFORE, T HE EXPENDITURE WAS ALLOWABLE AS DEDUCTION TO THE ASSESSEE IN THE PRESE NT YEAR UNDER CONSIDERATION. THE REVENUE COULD NOT BRING ANY MA TERIAL ON RECORD TO SHOW THAT THE EXPENDITURE OF RS.50 LACS ON ACCOU NT OF SALES TAX LIABILITY CLAIMED DURING THE YEAR WAS ALLOWED DEDUC TION TO THE ASSESSEE IN THE ASST.YEAR 2004-05 OR THAT THE LIABI LITY FOR SALES TAX DID ITA NO.2977 /AHD/2010 A.Y. 2007-08 PAGE NO NEPTUNE OVERSEAS LTD. VS. DCIT 4 NOT CRYSTALLIZE DURING THE YEAR UNDER CONSIDERATION . IN ABSENCE OF ANY SUCH EVIDENCE BROUGHT ON RECORD BY THE REVENUE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(APPEALS). HENCE, WE CONFIRM THE ORDER OF THE LD. CIT(APPEALS) AND DISMISS THE A PPEAL OF THE REVENUE. 4. RESPECTFULLY FOLLOWING THE VIEW EXPRESSED BY THE CO-ORDINATE BENCH, WE HEREBY HOLD THAT THE ASSESSEE HAD MADE THE PAYME NT ON THE BASIS OF THE ORDER OF THE SALES TAX TRIBUNAL AND SUPPORTIVE EVID ENCE ABOUT THE DATES OF PAYMENTS; WHICH WAS CLAIMED ON PAYMENT BASIS; HAVE DULY BEEN PLACED ON RECORD, THEREFORE, THE LIABILITY BEING CRYSTALLIZED BY THE ORDER OF THE SALES TAX TRIBUNAL, THEREFORE, LIABLE TO BE ALLOWED FOR T HE YEAR UNDER CONSIDERATION. WE HOLD ACCORDINGLY. GROUND IS ALL OWED. 5. APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD : DATED 21/12/2012 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#