M/s. Odisha State Beverages Corporation Limited, Bhubaneswar, Bhubaneswar V. ACIT,Corp, Circle-1(2), Bhubaneswar

ITA 3/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3021 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 15-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF LICENSE FEE OF
• Keywords: Avoidance of tax
• Section: 201; 13; 22; 20

Judgement Text

P A G E 1 | 17 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 03 /CTK/201 9 ASSESSMENT YEAR : 2015 - 2016 ODISHA STATE BEVERAGE CORPN LTD., 2 ND FLOOR, FORTUNE TOWERS, CHANDRASEKHARPUR , BHUBANESWAR VS. ACIT, CORPORATE CIRCLE - 1(2), BHUBANESWAR. PAN/GIR NO. AAACO 6507 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI VED JAIN , AR REVENUE BY : SHRI M.K.GAUTAM CIT , DR DATE OF HEARING : 9 / 10 / 20 20 DATE OF PRONOUNCEMENT : 23 / 1 1 / 20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A),1, BHUBANESWAR DATED 19.12.2018 FOR THE ASSESSMENT YEAR 201 5 - 1 6 . 2. GROUNDS OF APPEAL RAISED ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD, BOTH IN THE EYE OF LAW AND ON THE FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING DISALLOWANCE OF RS. 151,90,00,000 / - MADE BY THE AO UNDER SECTION 40(A)(IIB)OF THE ACT ON ACCOUNT OF LICENSE FEES PAID TO THE GOVT, OF ODI SHA 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE CONTENTION OF THE ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 2 | 17 ASSESSEE THAT SINCE LICENSE FEES IS EXCLUSIVELY NOT LEVIED ON THE ASSESSEE, PROVISIONS OF CLAUSE (IIB) OF SECTI ON 40(A) ARE NOT APPLICABLE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN IGNORING THE CONTENTION OF THE ASSESSEE THAT THE LICENSE FEES PAID BY THE ASSESSEE TO CARRY ON THE LIQUOR TRADING UNDER SECTION 22 OF THE BIHAR & ORISSA EXCISE ACT, 1915, IS AN ALLOWABLE EXPENDITURE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF AO BY MISINTERPRETING THE PR OVISIONS OF CLAUSE (IIB) OF SECTION 40(A) OF THE ACT. 6 . THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. GROUND NOS.1 & 6 ARE GENERAL IN NATURE. 4. APROPOS GROUND NOS.2 TO 5 OF APPEAL , FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS A STATE GOVERNMENT UNDERTAKING UNDER THE MINISTRY OF EXCISE, GOVERNMENT OF ODISHA. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SUPPLY OF WHOLESALE FOREIGN LIQUOR, INDIAN MADE FO REIGN LIQUOR AND COUNTRY LIQUOR MANUFACTURED FROM MOLASES FOR THE WHOLE OF THE STATE OF ODISHA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN LICENSE FEE PAYMENT OF RS. 151,90,00,000 / - IN ITS PROFIT AND LOSS ACCOUNT AND REQUIRED THE ASSESSEE TO FURNISH DETAILS REGARDING PAYMENT OF LICENSE FEES AND THE ALLOWABILITY OF CLAIM IN THE LIGHT OF PROVISIONS OF SECTION 40(A)(IIIB) OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER REFERRED TO SECTION 40(A)(IIB) , WHICH LAYS DOWN THAT ANY AMOUNT PAID BY WAY OF ROYALTY, LICENSE FEE, SERVICE FEE, PRIVILEGE FEE, SERVICE CHARGE OR ANY OTHER ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 3 | 17 FEE OR CHARGE BY WHATEVER NAME CALLED WHICH IS LEVIED EXCLUSIVELY ON OR WHICH IS APPROPRIATED DIRECTLY OR INDIRECTLY, FROM A STATE GOVERNMENT UNDERTAKING BY A STATE GOVERNMENT SHALL NOT BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS OR PROFESSION'. BEFORE THE AO, THE ASSESSEE HAS FILED ELABORATE SUBMISSIONS CONT ENDING THAT THE LICENSE FEE PAID TO THE STATE GOVERNMENT BY THE ASSESSEE CANNOT BE TAXED . HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND MADE DISALLOWANCE INVOKING THE PROVISIONS OF SECTION 40(A)(IIIB) OF THE ACT. 5. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. HENCE, THIS APPEAL BY THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, INTER ALIA, IMPUGNED ASSESSMENT ORDER, FIRST APPELLATE ORDER, PAPER BOOK OF THE ASSESSEE SPREAD OVER 123 PAGES, W RITTEN SYNOPSIS AND ENTIRE MATERIAL PLACED ON RECORD OF THE TRIBUNAL. 7. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE (AR) SUBMITTED THAT THE CIT(A) HAS GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING DISALLOWANCE OF RS. 151,90,00,000 / - MADE BY THE AO UNDER SECTION 40(A)(IIB)OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON ACCOUNT OF LICENSE FEES PAID TO THE GOVT, OF ODISHA. LD AR SUBMITTED THAT THE CIT(A) WAS NOT CORRECT AND JUSTIFIED IN REJECTING THE CONTENTION OF THE ASSESSEE THAT ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 4 | 17 SINCE LICEN SE FEE IS EXCLUSIVELY NOT LEVIED ON THE ASSESSEE, THUS, PROVISIONS OF CLAUSE (IIB) OF SECTION 40(A) OF THE ACT ARE NOT APPLICABLE TO THE IMPUGNED PAYMENT. LD AR VEHEMENTLY POINTED OUT THAT THE AUTHORITIES BELOW WERE NOT CORRECT AND JUSTIFIED IN MAKING AND CONFIRMING THE ADDITION BY MIS - INTERPRETING THE PROVISIONS OF CLAUSE (IIB) OF SECTION 40(A) OF THE ACT . 8. LD A.R. FURTHER SUBMITTED ALTHOUGH THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE IN ITA NO.130/CTK/20 18 FOR A. Y . 2014 - 15, BUT IN THAT ORDER SOME OF THE ARGUMENTS BY THE ASSESSEE WERE NOT DEALT IN WHILE PASSING THE ORDER, THEREFORE, SAME SHOULD NOT BE CONSIDERED AS THE BASIS FOR DETERMINATION OF THE CASE NOW UNDER CONSIDERATION. 9. LD A.R. SUBMITTED THAT THE PROVISIONS OF SECTION 40(A)(IIB) ARE ATTRACTED ONLY WHEN ANY AMOUNT PAID BY WAY OF LICENSE FEE, ETC IS LEVIED EXCLUSIVELY ON THE STATE GOVERNMENT UNDERTAKING BY A STATE GOVERNMENT. HE SUBMITTED THAT THERE LIES A DISTINCTION BETWEE N LICENSE FEES BEING LEVIED EXCLUSIVELY ON A STATE GOVERNMENT UNDERTAKING AS ENVISAGED UNDER SECTION 40(A)(IIB) OF THE ACT AND LICENSE FEES BEING PAID BY STATE GOVERNMENT UNDERTAKING/ANY OTHER PERSON TO STATE GOVERNMENT TO OBTAIN A LICENSE/PRIVILEGE OF CAR RYING ON A PARTICULAR LINE OF BUSINESS. LD A.R. ALSO IN ITS WRITTEN SUBMISSIONS, SUBMITTED AS UNDER: 1 . IN VIEW OF ARTICLE 246(3) READ WITH ITEM NO. 8, 66 AND 51 OF LIST II OF SCHEDULE VII OF CONSTITUTION OF INDIA, THE STATE GOVERNMENT HAS THE EXCLUSIVE RIGHT TO GRANT PRIVILEGE FOR MANUFACTURE, POSSESSION, SALE OF INTOXICATING LIQUOR. IT HAS THE EXCLUS IVE RIGHT TO MAKE LAWS TO ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 5 | 17 REGULATE THE BUSINESS OF INTOXICATING LIQUORS INCLUDING ITS MANUFACTURE, POSSESSION, TRANSPORT, PURCHASE, SALE AND CHARGE FEES FOR SUCH PURPOSE AS IT DEEMS FIT. 2 . THE ODISHA EXCISE ACT, 2005 (EARLIER THE BIHAR AND ORISSA EXCI SE ACT, 1915) PROVIDES FOR PROVISIONS THAT REGULATE THE MATTERS IN RELATION TO THE BUSINESS/CONSUMPTION, ETC. OF INTOXICATING LIQUOR IN THE STATE OF ODISHA. AS PER THE PROVISIONS OF SUCH ACT (SECTION 19, 20, SECTION 35 AND SECTION 90) [PB PAGE NO 81 - 115], ANY PERSON WHO INTENDS TO ENGAGE IN ANY BUSINESS (TRADE, MANUFACTURE, RETAILER, ETC.) IN RELATION TO LIGUOR IS REQUIRED TO ACQUIRE A LICENSE TO CARRY SUCH BUSINESS AND PAY SUCH LICENSEE FEES AS PRESCRIBED IN THIS REGARD BY THE EXCISE DEPARTMENT. 3 . LI CENSE FEE IS BEING NOTIFIED IN RESPECT OF THE ENTIRE LIQUOR BUSINESS. THIS DOES NOT MEAN THAT LICENSE FEE IS EXCLUSIVELY LEVIED ON A STATE GOVERNMENT UNDERTAKING. THE LEVY IS IN FACT IN RESPECT OF A BUSINESS, WHICH IS THE EXCLUSIVE RIGHT OF THE STATE GOVER NMENT TO UNDERTAKE UNDER THE CONSTITUTION OF INDIA, WHICH IT IS WILLING TO PART WITH IN LIEU OF SUCH CHARGES. THE ASSESSEE HAS ACQUIRED RIGHT TO CARRY ON THE WHOLESALE LIQUOR TRADE AND IT IS FOR ACQUISITION OF SUCH RIGHT THAT IT IS REQUIRED TO PAY THE LICE NSE FEES AS PER THE ODISHA EXCISE ACT, 2005 READ WITH THE EXCISE NOTIFICATION DATED 23.03.2013 ISSUED TO PRESCRIBE THE LICENSE FEE FOR THE YEAR UNDER CONSIDERATION. 4 . IT IS PERTINENT TO NOTE HERE THAT WHOSOEVER IS ENGAGED IN ANY BUSINESS (TRADE, MANUFACTURE, RETAILERS, ETC.) IN RELATION TO INTOXICATING LIGUOR IS REQUIRED TO PAY THE PRESCRIBED LICENSE FEES TO THE STATE GOVERNMENT IN ORDER TO ACQUIRE THE LICENSE AND TO BE ABLE TO CARRY SUCH BUSINESS. THE SAME IS EVIDENT FROM PERUSAL OF THE EXCISE NOTIFICATION [PB PAGE NO 66 - 80]. SUCH NOTIFICATION PRESCRIBES THE LICENSE FEES FOR ANY AND EVERY KIND OF BUSINESS IN RELATION TO LIQUOR AND IS MANDATORILY TO BE PAID. THERE IS A L ICENSE FEE RECOVERED FROM BAR HOTELS, LICENSE FROM SEA MEN'S AND MARINE OFFICERS' CLUB, LICENSE FROM CLUBS, LICENSE FOR SALE OF MEDICATED WINES/MEDICINES, LICENSE FOR BAR, WINE PARLOUR, LICENSE FOR BEER SHOP, LICENSE FOR BEER PARLOUR, LICENSE FOR WAREHOUSI NG AND LICENSE FOR RETAIL SHOP. 5 . THUS, LICENSE FEE FOR DIFFERENT LICENSES ARE RECOVERED FROM DEALERS WHO ARE SELLING LIQUOR WITH THE LICENSE FEE VARYING FOR EACH OF THE LICENSES PRESCRIBED. LICENSE FEE IS NOT AN EXCLUSIVE LEVY FROM THE ASSESSEE BUT IS A LEVY RECOVERED FROM ALL DEALERS DEALING WITH LIQUOR ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 6 | 17 AND COVERED UNDER THE ACT AND THE RULES MADE THERE UNDER. THE ASSESSEE, LIKE ANY OTHER PERSON ENGAGED IN BUSINESS RELATING TO LIQUOR, IS ALSO REQUIRED TO PAY THE PRESCRIBED LICENSE FEES FOR RENEWAL OF ITS LICENSE AND TO BE ABLE TO CARRY ON ITS BUSINESS. IN FACT, IT IS MANDATORY FOR THE ASSESSEE TO PAY SUCH LICENSE FEES IN ORDER TO CARRY ON THE BUSINESS. THE PAYMENT OF SUCH LICENSE FEES IS MUST FOR THE ASSESSEE /ANY PERSON ENGAGED IN SUCH BUSINESS TO CAR RY ON ITS BUSINESS I.E. WITHOUT MAKING SUCH PAYMENT, THE BUSINESS WILL NOT EXIST. FURTHER, EVEN IF ANY OTHER PERSON WOULD HAVE CARRIED ON SUCH BUSINESS, HE WOULD HAVE REQUIRED TO PAY SUCH FEES. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HON'BLE ITAT. 6 . THUS, WHEN LICENSE FEE IS ALLOWED AS A CHARGE (DEDUCTION) AGAINST PROFITS IN ALL OTHER CASES OF SELLERS DEALING IN FOREIGN LIQUOR, THE SAME CANNOT BE CONSIDERED AS AN EXCLUSIVE LEVY IN THE CASE OF STATE GOVERNMENT UNDERTAKINGS. CHARACTER OF LEVY, WHICH IS APPLICABLE TO ALL SELLERS AS A DEDUCTION AGAINST PROFITS, DOES NOT CHANGE TO ONE SELLER ALONE AND BECOME AN EXCLUSIVE LEVY . 7 . FURTHER, IT MAY BE THAT ASSESSEE IS THE ONLY LICENSE HOLDER BUT THAT WOULD NOT MEAN THAT THE LEVY IS EXCLUSIVELY ON THE AS SESSEE. THE LEVY IS IN RESPECT OF LIQUOR BUSINESS AND IS TO BE RECOVERED FROM ALL DEALERS DEALING WITH LIQUOR AND COVERED UNDER THE ACT AND THE RULES MADE THEREUNDER. THERE IS NO EXCLUSIVITY IN SUCH LEVY AS THE RIGHTS IN RESPECT OF WHOLESALE BUSINESS ASSIG NED TO THE ASSESSEE CAN BE ASSIGNED BY THE GOVERNMENT TO ANY OTHER PERSON AS WELL WHICH IS EVIDENT FROM PERUSAL OF SECTION 19 AND SECTION 20 OF THE ODISHA EXCISE ACT, 2005. AS POINTED OUT EARLIER, ANYONE AND EVERYONE WHO INTENDS TO ENGAGE IN LIQUOR BUSINES S IS REQUIRED TO PAY SUCH CHARGES AND THERE IS NO EXCLUSIVITY WHATSOEVER. PAYMENT OF SUCH LICENSE FEES IS A MUST FOR THE ASSESSEE/ANY PERSON TO CARRY ON ITS BUSINESS. EVEN IF ANY OTHER PERSON WOULD HAVE CARRIED ON SUCH BUSINESS, HE WOULD BE REQUIRED TO PAY SUCH FEES. THE TEST OF EXCLUSIVITY THUS FAILS. THE SAID ASPECT HAS NOT BEEN DEALT BY THE HON'BLE ITAT. 8. FURTHER, THE HON'BLE ITAT ALSO DID NOT CONSIDER THAT THE INTENTION BEHIND INSERTING SECTION 40(A)(IIB), AS EXPLICITLY REVEALED FROM MEMORANDUM AND E XPLANATORY NOTES TO FINANCE ACT, 2013, IS TO CURB TAX AVOIDANCE PRACTICES IN THE FORM OF APPROPRIATION OF SURPLUS BY STATE GOVERNMENT UNDERTAKING TO THE STATE GOVERNMENT. THE RELEVANT EXTRACT OF THE MEMORANDUM IN THIS REGARD IS PRODUCED BELOW FOR SAKE OF R EADY REFERENCE: ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 7 | 17 'DISALLOWANCE OF CERTAIN FEE, CHARGE, ETC. IN THE CASE OF STATE GOVERNMENT UNDERTAKINGS . THE EXISTING PROVISIONS OF SECTION 40 SPECIFIES THE AMOUNTS WHICH SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION', THE NON - DEDUCTIBLE EXPENSE UNDER THE SAID SECTION ALSO INCLUDES STATUTORY DUES LIKE FRINGE BENEFIT TAX, INCOME - TAX, WEALTH - TAX, ETC. DISPUTES HAVE ARISEN IN RESPECT OF INCOME - TAX ASSESSMENT OF SOME STATE GOVE RNMENT UNDERTAKINGS AS TO WHETHER ANY SUM PAID BY WAY OF PRIVILEGE FEE, LICENSE FEE, ROYALTY, ETC. LEVIED OR CHARGED BY THE STATE GOVERNMENT EXCLUSIVELY ON ITS UNDERTAKINGS ARE DEDUCTIBLE OR NOT FOR THE PURPOSES OF COMPUTATION OF INCOME OF SUCH UNDERTAKING S. IN SOME CASES, ORDERS HAVE BEEN ISSUED TO THE EFFECT THAT SURPLUS ARISING TO SUCH UNDERTAKINGS SHALL VEST WITH THE STATE GOVERNMENT. AS A RESULT IT HAS BEEN CLAIMED THAT SUCH INCOME BY WAY OF SURPLUS IS NOT SUBJECT TO TAX. IT IS A SETTLED LAW THAT STATE GOVERNMENT UNDERTAKINGS ARE SEPARATE LEGAL ENTITIES THAN THE STATE AND ARE LIABLE TO INCOME - TAX. IN ORDER TO PROTECT THE TAX BASE OF STATE GOVERNMENT UNDERTAKINGS VIS - A - VIS EXCLUSIVE LEVY OF FEE, CHARGE, ETC. OR APPROPRIATION OF AMOUNT BY THE STATE GOVER NMENTS FROM ITS UNDERTAKINGS, IT IS PROPOSED TO AMEND SECTION 40 OF THE INCOME - TAX ACT TO PROVIDE THAT ANY AMOUNT PAID BY WAY OF FEE, CHARGE, ETC., WHICH IS LEVIED EXCLUSIVELY ON, OR ANY AMOUNT APPROPRIATED, DIRECTLY OR INDIRECTLY, FROM A STATE GOVERNMENT UNDERTAKING, BY THE STATE GOVERNMENT, SHALL NOT BE ALLOWED AS DEDUCTION FOR THE PURPOSES OF COMPUTATION OF INCOME OF SUCH UNDERTAKINGS UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. IT IS ALSO PROPOSED TO DEFINE THE EXPRESSION 'STATE GOVERNM ENT UNDERTAKING' FOR THIS PURPOSE. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 2014 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENT ASSESSMENT YEARS.' 9 . THUS, THE INTENTION IS TO CURB TAX AVOIDANCE PRACTICE. THE INTENTION IS NOT TO DISALLOW THE LICENSEE FEES, WHICH IS PAYABLE TO BE ABLE TO CARRY ON THE BUSINESS OF LIQUOR TRADE, WHICH THE STATE GOVERNMENT HAS THE POWER TO LEVY UNDER ENTRY NO. 8, 51 AND 66 OF LIST II OF SCHEDULE VII OF THE CONSTITUTION OF INDIA. ACCORDINGLY, UNLESS THE INTENTION BEHIND MAKING PAYMENT OF LICENSE FEE IS PROVED TO BE A DIVERSION OF SURPLUS FOR AVOIDANCE OF TAX BASE OF THE ASSESSEE, THE DISALLOWANCE U/S. 40(A)(IIB) SHOULD NOT BE ATTRACTED. ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 8 | 17 1 0 . THE ABOVE IS ALSO IN CONFOR MITY WITH THE SETTLED LEGAL PRINCIPLE OF NOSCITURA SOCIIS AND EJUSDEM GENERIS WHEREBY CLAUSE (A) OF THE SAID SECTION, DEALING WITH EXCLUSIVE LEVY SHOULD BE READ IN THE CONTEXT OF CLAUSE (B) WHICH DEALS WITH APPROPRIATION OF PROFITS. ACCORDINGLY, ONLY SUCH LEVIES WHICH INTEND TO DIVERT THE PROFITS SHOULD BE CONSIDERED FOR DISALLOWANCE UNDER SECTION 40(A)(IIB) OF THE ACT. 11 . SINCE IN THE INSTANT CASE, LICENSE FEE IS PAID AS A COMPULSORY PAYMENT FOR CONDUCTING BUSINESS AND THERE HAS BEEN NO ALLEGATION OF THE SAME BEING PAID AS A MEANS TO DIVERT SURPLUS OF THE ASSESSEE, THE PROVISIONS OF SECTION 40(A)(IIB) ARE NOT WARRANTED. NO FINDING WAS GIVEN ON THE SAID ASPECT BY THE HON'BLE ITAT IN THE ORDER. 1 2 . FURTHER, IMPORTANTLY, LICENSE FEES ARE BEING CHARGED BY THE STATE GOVERNMENT AT THE BEGINNING OF THE FINANCIAL YEAR AND IS CHARGED TO THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. THE SAME IS ALSO CONSIDERED WHILE PRICING THE PRODUCT. THUS, THE INCOME AND MARGIN EARNED BY THE ASSESSEE IS AFTER TAKING INTO AC COUNT SUCH LICENSE FEES, WHICH IS ALSO EVIDENT FROM THE FACT THAT DESPITE PAYMENT OF SUCH LICENSE FEES, THE ASSESSEE COMPANY HAS REPORTED HUGE TAXABLE INCOME OF RS. 83.22 CRORES IN AY 2014 - 15 AND RS. 72.66 CRORES (GTI) IN AY 2015 - 16. SUCH ARGUMENT HAS ALSO NOT BEEN CONSIDERED IN THE PRECEDING YEAR'S ORDER. THE SAID FACT CORROBORATES THAT THERE IS NO SHIFTING OF TAX BASE . 13 . IN LIGHT OF THE ABOVE, IT IS SUBMITTED THAT THE CASE OF THE ASSESSEE IS NOT THAT OF EXCLUSIVE LEVY IMPOSED BY GOVERNMENT ON SU CH UNDERTAKING IN THE NAME OF LICENSE FEE SO AS TO APPROPRIATE/DIVERT ANY TAXABLE PROFIT. IN FACT, THE ASSESSEE HAS PAID GENUINE FEE FOR OBTAINING LICENSE OF BUSINESS, WHICH WOULD HAVE BEEN EQUALLY COLLECTED FROM ANY OTHER DEALER AS WELL, HAD IT BEEN GIVEN THE LICENSE TO CONDUCT SUCH BUSINESS. THERE IS A DISTINCTION BETWEEN EXCLUSIVE LEVY ON A STATE GOVERNMENT UNDERTAKING AS PROVIDED UNDER SECTION 40(A)(IIB) AND PRIVILEGE FEES CHARGED BY THE STATE GOVERNMENT TO ASSIGN RIGHT TO CARRY ON A BUSINESS WHICH FALL S UNDER THE EXCLUSIVE DOMAIN OF THE STATE. 14 . AS A MATTER OF FACT, AT THE COST OF REPETITION, IT IS SUBMITTED THAT THE EXCISE NOTIFICATION PRESCRIBES THE LICENSE FEES FOR ANY AND EVERY KIND OF BUSINESS IN RELATION TO LIQUOR AND IS MANDATORILY TO BE PAI D AND SIMILAR FEE IS ALSO RECOVERED FROM BAR HOTELS, LICENSE FROM SEA MEN'S AND MARINE OFFICERS' CLUB, LICENSE FROM CLUBS, LICENSE FOR SALE OF MEDICATED WINES/MEDICINES, LICENSE FOR BAR, WINE PARLOUR, LICENSE ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 9 | 17 FOR BEER SHOP, LICENSE FOR BEER PARLOUR, LICENS E FOR WAREHOUSING AND LICENSE FOR RETAIL SHOP. THUS, THERE IS NO EXCLUSIVITY WHATSOEVER. 15 . IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THOUGH THE FACTS FOR ASSESSEE'S CASE IN PRECEDING YEAR ARE SAME AS THAT OF THE YEAR UNDER CONSIDERATION, HOWEVER, TH E DECISION RENDERED BY THE HON'BLE ITAT HAS NOT TAKEN INTO THE ABOVE SAID CONTENTIONS OF ASSESSEE. KEEPING IN VIEW THE ABOVE, IT IS PRAYED THAT THE ADDITION MADE BY THE LD. AO, AS SUSTAINED BY THE ID. CIT(A) FOR THE YEAR UNDER CONSIDERATION, BE DELETED. 1 6 . WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT THE ENTIRE AMOUNT PAID AS LICENSE FEE CANNOT BE DISALLOWED UNDER SECTION 40(A)(IIB) BY ANY STRETCH OF IMAGINATION. 17. THIS REGARD, IT MAY BE RELEVANT TO POINT OUT THAT THERE IS NO ALLEGATION MADE BY ID. AO THAT THE LICENSE FEE CHARGED FROM THE ASSESSEE IS UNREASONABLE WHEN COMPARED TO THE LICENSE FEES PAID BY THE OTHER PERSONS FOR ACQUIRING THE LICENSE IN RELATION TO LIQUOR BUSINESS. THERE IS ALSO NO ALLEGATION THAT THE LICENSE FEE PAID IS NOT GENU INE. LD. AO HAS NOT CARRIED OUT ANY EXERCISE WHATSOEVER OR LEVELLED ANY ALLEGATION WITH REGARD TO THE QUANTUM OF THE AMOUNT PAID AS LICENSE FEE. BY NO STRETCH OF IMAGINATION CAN THE ENTIRE AMOUNT PAID AS LICENSE FEE BE CONSIDERED TO BE DISALLOWED UNDER SEC TION 40(A)(IIB). 18. IT IS SUBMITTED THAT THE STATE GOVERNMENT CANNOT BE EXPECTED TO PART WITH ITS EXCLUSIVE RIGHT TO GRANT PRIVILEGE FOR MANUFACTURE, POSSESSION, SALE OF INTOXICATING LIQUOR GRANTED UNDER THE CONSTITUTION OF INDIA FOR FREE TO STATE GOVERN MENT UNDERTAKINGS WHEN IT SO CHARGES AN AMOUNT TO PART WITH ITS RIGHTS FROM NON - STATE GOVERNMENT UNDERTAKINGS AS WELL. THE LEVY HAS TO BE EXCLUSIVE TO ATTRACT THE PROVISION OF SECTION 40(A)(IIB). 19. IT IS SUBMITTED THAT MERELY BECAUSE AN AMOUNT IS PAID BY A STATE GOVERNMENT UNDERTAKING TO STATE GOVERNMENT, THE SAID AMOUNT DOES NOT BECOME AN EXCLUSIVE LEVY. THE INTENTION OF THE LEGISLATION IS TO DISALLOW AMOUNT PAID AS EXCLUSIVE LEVY OR TO APPROPRIATE PROFITS AND NOT TO DISALLOW ANY AMOUNT PAID BY ST ATE GOVERNMENT UNDERTAKINGS TO STATE GOVERNMENTS MERELY BECAUSE STATE GOVERNMENT ARE STAKEHOLDERS IN STATE GOVERNMENT UNDERTAKINGS. 20. IT IS A WELL SETTLED PRINCIPLE IN THE LAW THAT THE COMPANY IS A JURISTIC PERSON WITH DISTINCT AND SEPARATE LEGAL ENTITY FROM THE SHAREHOLDERS. THE ENTITY OF A COMPANY IS ENTIRELY SEPARATE FROM THAT ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 10 | 17 OF ITS SHAREHOLDERS; IT BEARS ITS OWN NAME AND HAS A SEAL OF ITS OWN; ITS ASSETS ARE SEPARATE AND DISTINCT FROM THOSE OF ITS MEMBERS; IT CAN SUE AND BE SUED EXCLUSIVELY FOR ITS O WN PURPOSE; ITS CREDITORS CANNOT OBTAIN SATISFACTION FROM THE ASSETS OF ITS MEMBERS; THE LIABILITY OF THE MEMBERS OR SHAREHOLDERS IS LIMITED TO THE CAPITAL INVESTED BY THEM; SIMILARLY, THE CREDITORS OF THE MEMBERS HAVE NO RIGHT TO THE ASSETS OF THE CORPORA TION. THIS POSITION HAS BEEN WELL - ESTABLISHED EVER SINCE THE DECISION IN THE CASE OF SALOMON V. SALOMON & CO, 1897 AC 22 WAS PRONOUNCED IN 1897; AND INDEED, IT HAS ALWAYS BEEN THE WELL - RECOGNIZED PRINCIPLE OF COMMON LAW. 21. . FURTHER, MERE OWNERSHIP, PARENTAL CONTROL, MANAGEMENT ETC. OF A SUBSIDIARY IS NOT SUFFICIENT TO PIERCE THE STATUS OF THEIR RELATIONSHIP. RELIANCE IN THIS REGARD IS PLACED ON THE JUDGMENT OF VODAFONE INTERNATIONAL HOLDINGS B.V. V. UNION OF INDIA [2012] 314 ITR 1 (SC) 22 . CORPORATE VEIL IN CASE OF A COMPANY'S HAVING HOLDING - SUBSIDIARY RELATIONSHIP MAY BE LIFTED ONLY IF IT CAN BE ESTABLISHED, AS A MATTER OF FACT, THAT THE SUBSIDIARY HAS ACTED IN A PARTICULAR TRANSACTION AS AN AGENT OF THE HOLDING COMPA NY OR THAT THERE HAS BEEN AN ABUSE OF THE CORPORATE FORM FOR WRONGFUL PURPOSE OR WHERE TAX IS SOUGHT TO BE EVADED OR THERE IS AN ATTEMPT TO CIRCUMVENT TAX OBLIGATION OR TO PERPETRATE FRAUD. 23 .IN ABSENCE OF ANY ALLEGATION THAT THE AMOUNT PAID IS UNREASONAB LE OR THERE IS AN ATTEMPT TO EVADE TAX, THE DISALLOWANCE UNDER THE PROVISION OF SECTION 40(A)(IIB) CANNOT BE MADE. 2 4 . IN VIEW OF THE ABOVE SUBMISSIONS, IT IS PRAYED THAT THE ADDITION MADE U/S 40(A)(IIB) BE DELETED. 10 . LD AR FURTHER DREW OUR ATTENTION TOWARDS COPY OF THE AUDITED FINANCIAL STATEMENT OF THE ASSESSEE FOR THE FINANCIAL YEAR 201 4 - 15 RELEVANT TO ASSESSMENT YEAR 201 5 - 16 AND SUBMITTED THAT THE ASSESSEE CORPORATION HAS BEEN CREATED AND INCORPORATED UNDER THE COMPAN IES ACT, 1956 AND THE PAYMENT OF LICENSE FEE IS NOT UNDER EXCLUSIVE LEVY OR APPROPRIATE OF PROFITS. THEREFORE, PROVISIONS OF SECTION 40(A)(IIB) OF THE ACT DOES NOT ATTRACT TO THE SAID PAYMENT. ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 11 | 17 11. REPLYING TO ABOVE, LD CIT(DR) SUBMITTED THAT THE ISSUE HAS ALREADY BEEN SETTLED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2014 - 15. 12. LD CIT DR FURTHER SUBMITTED THAT IN VIEW OF THE AMENDED PROVISIONS OF SECTION 40(A)(IIB) OF THE ACT, THE LICENSE FEES PAID TO STATE GOVERNMENT IS TAXABLE IN THE HANDS OF THE ASSESSEE. 14. LD D.R. CONTENDED THAT CLAUSE (18) OF GUIDELINES ISSUED BY EXCISE DEPARTMENT OF GOVERNMENT OF ODISHA CLEARLY REVEALS THAT THE WHOLESALE DISTRIBUTION IF FOREIGN LIQUOR, IMFL AND COUNTRY LIQUOR HA S BEEN EXCLUSIVELY ASSIGNED TO ORISSA STATE BEVERAGE CORPORATION I.E. THE ASSESSEE. THUS, THE RIGOUR OF PROVISIONS OF SUB - CLAUSE(IIB) OF CLAUSE (A) OF SECTION 40 OF THE ACT IS TO BE TRIGGERED AGAINST THE ASSESSEE AS THE ASSESSEE BY WAY OF LICENSE FEE OF W HOLESALE DISTRIBUTION OF LIQUOR HAS PAID THE IMPUGNED AMOUNT AND THE SAME HAS BEEN LEVIED ON THE ASSESSEE EXCLUSIVELY AS THERE IS NO OTHER WHOLESALER OF LIQUOR IN THE STATE OF ODISHA. LD D.R. SUPPORTING THE ASSESSMENT ORDER SUBMITTED THAT ON GOING THROUGH THE GUIDELINES ISSUED BY THE EXCISE DEPARTMENT OF GOVERNMENT OF ODISHA ALONGWITH THE PROVISIONS OF SECTION 40(A)(IIB) OF THE ACT, IT CAN BE EASILY GATHERED THAT THIS PROVISION IS APPLICABLE FOR ANY AMOUNT WHICH IS PAID BY WAY OF LICENSE FEES OR CHARGE WHI CH IS LEVIED EXCLUSIVELY ON THE STATE GOVERNMENT UNDERTAKING BY STATE GOVERNMENT OR WHICH IS APPROPRIATED DIRECTLY OR INDIRECTLY FROM THE STATE GOVERNMENT ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 12 | 17 UNDERTAKING BY THE STATE GOVERNMENT. THEREFORE, THE CIT(A) WAS RIGHT IN CONFIRMING THE DISALLOWANCE BY HOLDING THAT THE IMPUGNED LICENSE FEE PAID BY THE ASSESSEE TO THE STATE GOVERNMENT WHICH CLEARLY IN THE NATURE OF PAYMENTS SPECIFIED U/S.40(A)(IIB) OF THE ACT W.E.F. 1.4.2014. LD CIT DR FINALLY PRAYED THAT THE ASSESSMENT AS WELL AS THE FIRST APPELLATE ORDER MAY KINDLY BE UPHELD ON THIS ISSUE BY DISMISSING THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. WE HAVE ALSO GONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL AS THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2014 - 15 (SUPRA). WE FIN D THAT THERE IS NO CHANGE IN THE FACTS AND ISSUE INVOLVED IN THIS CASE. IN THE PRESENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN LICENSE FEE PAYMENT OF RS.151,90,00,000/ - IN ITS PROFITS AND LOSS ACCOUNT PAID TO THE STATE GOVERNMENT OF ODISHA AND V IEW OF THE AMENDED PROVISIONS OF SECTION 40(A)(IIB) OF THE ACT, THE LICENSE FEES PAID TO STATE GOVERNMENT IS TAXABLE IN THE HANDS OF THE ASSESSEE. WHILE CONSIDERING THE SAID ISSUE, THIS TRIBUNAL HAS OBSERVED AS UNDER: 1 5 . ON A CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE IS A STATE GOVERNMENT UNDERTAKING DEALING IN SUPPLY OF WHOLESALE FOREIGN LIQUOR, INDIAN MADE FOREIGN LIQUOR AND COUNTRY LIQUOR MANUFACTURED FROM MOLASES FOR THE WHOLE OF THE ST ATE OF ODISHA. THE ASSESSEE HAS SHOWN PAYMENT OF RS.100,80,00,000/ - AS LICENSE FEES IN ITS PROFIT AND LOSS ACCOUNT. WE FIND THAT CLAUSE (IIB) WAS INSERTED BY THE FINANCE ACT, 2013 WITH EFFECT FROM 1.4.2014 AND THE SAID SECTION SPECIFICALLY DISALLOWS ANY AMOUNT PAID BY WAY OF ROYALTY, LICENSE FEE, SERVICE FEE, PRIVILEGE FEE, SERVICE CHARGE OR ANY OTHER FEE OR CHARGE BY WHATEVER NAME CALLED WHICH IS LEVIED ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 13 | 17 EXCLUSIVELY ON OR WHICH IS APPROPRIATED DIRECTLY OR INDIRECTLY, FROM A STATE GOVERNMENT UNDERTAKING B Y A STATE GOVERNMENT SHALL NOT BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS OR PROFESSION'. CONSEQUENTLY, IN VIEW OF THE SAID PROVISION, DISALLOWANCE CAN BE MADE FROM THE ASSESSMENT YEAR 2014 - 15 AND SUBSEQUENT YEARS AND IT IS APPLICABLE PROSPECTIVELY. THIS IS SUPPORTED BY THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE BILL CIRCULAR NO.3/2014 DATED 24.1.2014 AND NOTE ON CLAUSES. THE ASSESSMENT YEAR UNDER CONSIDERATION BEING 2014 - 15,HE NCE, THE PROVISION OF SECTION 40(A)(IIB) OF THE ACT IS APPLICABLE AND DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS IN ORDER. 16. WE FURTHER OBSERVE THAT THE COPY OF GUIDELINES ISSUED BY THE EXCISE DEPARTMENT FOR SETTLEMENT OF E XCISE SHOPS AND ESTABLISHMENT FOR FINANCIAL YEAR 2013 - 14 PERTAINING TO ASSESSMENT YEAR 2014 - 15 (ASSESSEES PAPER BOOK 77 - 92) CLAUSE (18) CLEARLY REVEALS THAT THE WHOLESALE DISTRIBUTION OF FOREIGN LIQUOR, IMFL AND COUNTRY LIQUOR HAS BEEN EXCLUSIVELY ASSIGNE D TO THE ASSESSEE ON PAYMENT OF LICENSE FEE OF RS.100 CRORES PER ANNUM. 17. LD A.R. DID NOT CONTROVERT THE FACT THAT THERE IS NO OTHER WHOLESALER OF FOREIGN LIQUOR, IMFL AND COUNTRY LIQUOR IN THE STATE OF ODISHA AND THE ASSESSEE HAS EXCLUSIVE RIGHT TO UN DERTAKE WHOLESALE LIQUOR BUSINESS IN THE STATE OF ODISHA WITHOUT ANY COMPETITOR. 18. AT THE COST OF REPETITION, WE MAY POINT OUT THAT IN CLAUSE (18) OF GUIDELINES OF EXCISE DEPARTMENT OF GOVERNMENT OF ODISHA MAKES IT CLEAR THAT THE ASSESSEE IS THE EXCL USIVE WHOLESALER OF ALL KIND OF LIQUOR IN THE STATE OF ODISHA. THEREFORE, THE OTHER CONTENTIONS OF LD A.R. ARE NOT TENABLE THAT PROVISIONS OF SUB - CLAUSE (IIB) OF CLAUSE (A) OF SECTION 40 OF THE ACT IS NOT APPLICABLE TO THE ASSESSEE FOR MAKING DISALLOWANCE THE IMPUGNED PAYMENT OF LICENSE FEE. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, AS NOTED ABOVE, WE ARE SATISFIED THAT THE ASSESSING OFFICER WAS RIGHT IN MAKING THE DISALLOWANCE OF IMPUGNED LICENSE FEE AND THE CIT(A) WAS ALSO CORRECT AND JUST IFIED IN UNDERSTANDING THE PROVISIONS OF SECTION 40(A)(IIB) OF THE ACT. ACCORDINGLY, GROUND NOS.1 TO 5 OF ASSESSEE DEVOID OF ANY MERITS, IS DISMISSED. 16. AT THE OUTSET, WE MAY POINT OUT THAT IN THE BEGINNING OF THE ARGUMENTS, LD COUNSEL FOR THE ASSESSEE, IN ALL FAIRNESS, ADMITTED THAT THE ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 14 | 17 APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2014 - 15 IN ITA NO.140/CTK/2018 UNDER SIMILAR FACTS AND CIRCUMSTANCES AND ON T HE SAME ISSUE, HAS BEEN DISMISSED BY THIS BENCH AND THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. LD CIT DR SUBMITTED THAT THE FACTS AND CIRCUMSTANCES, THE APPEAL FOR THE ASSESSEE FOR A.Y. 2015 - 16 ARE QUITE IDENTICAL AND SIMILAR, THEREFORE, THE ISSUE IS CLEARLY COVERED IN FAVOUR OF THE REVENUE BY THE ORDER OF THE TRIBUNAL DATED 4.10.2019 (SUPRA). 17. HOWEVER, DURING ARGUMENTS BEFORE US IN THIS APPEAL, LD COUNSEL HAS SUBMITTED WRITTEN SUBMISSIONS, WHICH HAS BEEN REPRODUCED IN PARA 9 OF THIS ORDER. IN THESE SUBMISSIONS, IN PARAS 1 TO 15, THE ASSESSEE HAS REITERATED THE SIMILAR CONTENTIONS WHICH WERE RAISED IN THE APPEAL FOR ASSESSMENT YEAR 2014 - 15 AND WE HAVE ADJUDICATED AND DECIDED THE SAME AGAINST THE ASSESSEE BY WAY OF P ASSING ORDER DATED 4.10.2019(SUPRA), DISMISSING THE APPEAL OF THE ASSESSEE. IN PARAS 16 TO 24 OF THE WRITTEN SUBMISSIONS, THE CONTENTION OF THE ASSESSEE IS THAT THE ENTIRE AMOUNT AS PAID LICENSE FEES, CANNOT BE DISALLOWED U/S.40(A)(IIB) OF THE ACT BY ANY STRETCH OF IMAGINATION. LD COUNSEL HAS SUBMITTED THAT MERE OWNERSHIP, PARENTAL CONTROL, MANAGEMENT ETC OF A SUBSIDIARY IS NOT SUFFICIENT TO PIERCE THE STATUS OF THEIR RELATIONSHIP. LD COUNSEL ALSO SUBMITTED THAT IN ABSENCE OF ANY ALLEGATION THAT THE AMOU NT PAID IS UNREASONABLE OR THERE IS AN ATTEMPT TO EVADE TAX, THE DISALLOWANCE UNDER THE PROVISION OF SECTION 40(A)(IIB) CANNOT BE MADE. LD COUNSEL ALSO SUBMITTED THAT THERE IS NO ALLEGATION BY THE AO THAT THE ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 15 | 17 LICENSE FEE CHARGED FROM THE ASSESSEE US UNREA SONABLE WHEN COMPAR ED TO LICENSE FEE PAID BY OTHER PERSONS FOR ACQUIRING THE LICENSE IN RELATION TO LIQUOR BUSINESS. IT HAS ALSO BEEN SUBMITTED THAT THERE IS NO ALLEGATION THAT LICENSE FEE PAID IS NOT GENUINE AND THE AO HAS NOT CARRIED OUT ANY EXERCISE W HATSOEVER OR LEVELLED ANY ALLEGATION WITH REGARD TO THE QUANTUM OF THE AMOUNT PAID AS LICENSE FEE AND, THEREFORE, BY NO STRETCH OF IMAGINATION CAN THE ENTIRE AMOUNT PAID AS LICENSE FEE BE CONSIDERED TO BE DISALLOWED UNDER SECTION 40(A)(IIB) OF THE ACT. 18. LD COUNSEL DURING THE ARGUMENTS, PRESSING INTO SERVICE WITH REFERENCE TO THESE CONTENTIONS, SUBMITTED THAT THE CASE MAY KINDLY BE REMITTED TO THE FILE OF THE AO FOR DETERMINATION OF LICENSE FEE COMPARING WITH THE LICENSE FEE PAID BY OTHER LICENSEES AND TH E ASSESSEE SHOULD BE ALLOWED TO CLAIM SUCH AMOUNT OF LICENSE FEES, WHICH IS REASONABLE AND APPLICABLE IN VIEW OF THE LICENSE FEE PAID BY OTHER SIMILAR LIQUOR WHOLESALERS. 19. ON THESE CONTENTIONS, LD CIT DR VEHEMENTLY POINTED OUT THAT THE ASSESSEE IS THE O NLY WHOLESALE DISTRIBUTOR OF LIQUOR AUTHORIZED BY GOVERNMENT OF ODISHA AND THERE IS NO OTHER LICENSEES IN THE SIMILAR LINE OF BUSINESS. THEREFORE, NO COMPARABLE CASE IS APPLICABLE. HE ALSO POINTED OUT THAT THE CONTENTIONS OF THE ASSESSEE AT PARAS 16 TO 24 HAVE NOT BEEN RAISED BY THE ASSESSEE DURING EARLIER APPEAL OR BEFORE THE AUTHORITIES BELOW DURING ASSESSMENT AND FIRST APPELLATE PROCEEDINGS FOR ASSESSMENT YEAR 2014 - 15 AND ALSO 2015 - 16, HENCE, THE ASSESSEE COULD NOT BE ALLOWED TO ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 16 | 17 MAKE A NEW CASE BEFORE THE TRIBUNAL AND, THEREFORE, MATTER CANNOT BE RESTORED TO THE FILE OF THE AO FOR DETERMINATION OF APPROPRIATE LICENSE FEES IN COMPARISON WITH THE OTHER LIQUOR BUSINESS. 20. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS , FIRST OF ALL, WE MAY POINT OUT THAT ADMITTEDLY, THE ASSESSEE IS THE ONLY WHOLESALE LIQUOR DISTRIBUTOR IN THE STATE AS AUTHORIZED BY GOVERNMENT OF ODISHA BY CHARGING IMPUGNED LICENSE FEE. THEREFORE, THERE IS NO PERSON IN SIMILAR LINE OF BUSINESS WITH WHOM LICENSE FEES CHARGED BY GOVT. OF OD ISHA AND PAID BY THE ASSESSEE CANNOT BE COMPARED FOR DETERMINATION OF REASONABLE LICENSE FEE. ON CAREFUL PERUSAL OF THE ORDER OF THE TRIBUNAL IN PARA 14 - 15 (SUPRA) THE ASSESSMENT ORDERS AND FIRST APPELLATE ORDERS FOR ASSESSMENT YEARS 2014 - 15 AND 2015 - 16 , WE HAVE NO HESITATION TO HOLD THAT ABOVE CONTENTIONS HAVE NOT BEEN RAISED BY THE ASSESSEE NEITHER DURING ASSESSMENT PROCEEDINGS AND FIRST APPELLATE PROCEEDINGS FOR BOTH THE ASSESSMENT YEARS AND NOR BEFORE THE TRIBUNAL DURING ARGUMENTS OF ASSESSMENT YEAR 2014 - 15. IN VIEW OF ABOVE, THE ASSESSEE CANNOT BE ALLOWED TO MAKE A NEW CASE AND TO ARGUE THE CONTENTIONS WHICH WERE NOT PRESSED INTO SERVICE BEFORE THE AUTHORITIES BELOW AND BEFORE THE TRIBUNAL DURING THE HEARING OF THE CASE OF A.Y. 2014 - 15(SUPRA) AT THI S BELATED STAGE. THEREFORE, THESE CONTENTIONS OF THE ASSESSEE ARE DISMISSED. 21. SINCE UNDISPUTEDLY AND ADMITTEDLY, THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2014 - 15 ARE QUITE SIMILAR AND IDENTICAL WITH PRESENT ITA NO. 03 /CTK/201 9 ASSESSMENT YEAR : 201 5 - 2016 P A G E 17 | 17 ASSESSMENT YEAR I.E. 2015 - 16 AND T HE APPEAL OF THE ASSESSEE HAVING SIMILAR GROUNDS HAS BEEN DISMISSED BY THIS TRIBUNAL BY PASSING ORDER DATED 4.10.2019 (SUPRA), THUS, WE HAVE NO HESITATION TO HOLD THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER DATED 4.10.2019(SUPRA) OF THIS TRIBUNAL. THE REFORE, RESPECTFULLY FOLLOWING THE SAME THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2015 - 16 IS DISMISSED. 22. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED ON 23 / 1 1 /20 20 S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 23 / 1 1 /20 20 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : ODISHA STATE BEVERAGE CORPN LTD., 2 ND FLOOR, FORTUNE TOWERS, CHANDRASEKHARPUR 2. THE RESPONDENT. ACIT, CORPORATE CIRCLE - 1(2), CHANDRASEKHARPUR, BHUBANESWAR 3. THE CIT(A) - 1 , BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//