Punit Proteins Pvt. Ltd., Baroda V. The ACIT, Circle-4, Baroda

ITA 3045/AHD/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5294 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 18-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3045/AHD/2014 (ASSESSMENT YEAR: 2011-12) PUNIT PROTEINS PVT. LTD. SANGMA ROAD, PADRA, DIST: VADODARA-391440 V/S ACIT, CIRCLE-4, BARODA (APPELLANT) (RESPONDENT) PAN: AABCP8996Q APPELLANT BY : SHRI M. J. SHAH, AR RESPONDENT BY : SHRI S. K. DEV, SR. D.R. ( )/ ORDER DATE OF HEARING : 06 -12-201 8 DATE OF PRONOUNCEMENT : 25 -01-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-III, BARODA DATED 20.08.2014 PERTAINING TO A.Y. 2011-12 AND HAS TAKEN A SINGLE ITA NO. 3045 /AHD/2014 . A.Y. 2011-1 2 2 GROUND THAT LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 5,00,000/- MADE ON ACCOUNT OF SALES PROMOTION EXPENSES. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A PPELLANT COMPANY IS CARRYING ON THE BUSINESS OF MANUFACTURING AND TRADING OF PULSES /CEREALS AT PADRA, VADODARA, GUJARAT SINCE LONG BACK. 3. IN ORDER TO BOOST, THE SALE OF TUVER DAL. THE APPEL LANT COMPANY HAS KEPT PLASTIC CARD RANDOMLY INSIDE 25 KG PACKET OF TUVER DAL AND ANNOUNCED THE SCHEME TO ITS PROBABLE CUSTOMERS THAT IF ANY PURCHA SER OF ABOVE SAID ITEM FOUND PLASTIC CARD IN THE 25 KG TUVER DAL PACKET, T HE SAME PLASTIC CARD TO BE REPLACED BY A SILVER COIN. AND FOR THAT PURPOSE, AS SESSEE PURCHASED SILVER COIN OF RS. 5,00,000/- FOR ADVERTISEMENT AND SALE PROMOT ION AND SAME WAS CLAIMED AS EXPENSES. BUT LD. A.O. DISALLOWED THE SAME FOR T HE REASON THAT ANY EXPENDITURE WHICH IS SAID TO HAVE ACCRUED ONLY WHEN A DEMAND IS MADE AND THE SAME IS ACCEPTED BY THE PARTY. IN THE SAME FINANCIA L YEAR, SUCH EXPENSES TO BE ALLOWED BUT IN ASSESSEES CASE DEMAND FOR THE SILVE R COINS HAVE BEEN MADE IN THE NEXT YEAR. THEREFORE, CLAIM IS NOT ADMISSIBLE AND MADE THE DISALLOWANCE OF RS. 5,00,000/-. 4. IN APPEAL BEFORE THE LD. CIT(A), HE CONFIRMED THE A CTION OF THE A.O. 5. NOW APPELLANT HAS COME BEFORE US. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. WE CAN SEE, THIS SCHEME WAS MADE AVAILABLE FROM 15.01.2011 TO 3 1.03.2011 FOR KRISHNA AND PUNIT BRAND OF TUVER DAL. AND APPELLANT COMPANY HA S KEPT PLASTIC CARD ITA NO. 3045 /AHD/2014 . A.Y. 2011-1 2 3 RANDOMLY INSIDE 25KG OF TUVER DAL BAG. ON RECEIVING THESE PLASTIC CARDS FROM EACH DEALER IN THE SUBSEQUENT YEAR, APPELLANT PURCH ASED SILVER COIN AS MENTIONED IN THE SCHEME AND HANDED OVER TO THE CONC ERNED DEALER. ASSESSEE PURCHASED THESE SILVER COINS ON 31.03.2011 AND MADE THE PAYMENT ON 02.04.2011. 7. AS WE CAN SEE, ALTHOUGH THE PAYMENT OF THE SILVER C OIN HAS BEEN PURCHASED IN THE NEXT YEAR BUT HOWEVER, SCHEME WAS COMMENCED IN THE LAST ASSESSMENT YEAR AND THUS THE LIABILITY WAS INCURRED IN THE LAST YEA R ITSELF. IN SUCH CASE, THE EXPENSES SO INCUR CANNOT BE DENIED. 8. IN SUPPORT OF ITS CONTENTION, LD. A.R. HAS CITED AN ORDER OF SUPREME COURT IN THE CASE OF BHARAT EARTH MOVERS VS. CIT 254 ITR 428 WHEREIN IT HAS BEEN HELD: IF A BUSINESS LIABILITY HAS DEFINITELY ARISEN IN T HE ACCOUNTING YEAR, THE DEDUCTION SHOULD BE ALLOWED ALTHOUGH THE LIABILITY MAY HAVE T O BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. WHAT SHOULD BE CERTAIN IS THE INCURRING OF THE LIABILITY. IT SHOULD ALSO BE CAPABLE OF BEING ESTIM ATED -WITH REASONABLE CERTAINTY THOUGH THE ACTUAL QUANTIFICATION MAY NOT BE POSSIBL E. IF THESE REQUIREMENTS ARE SATISFIED THE LIABILITY IS NOT A CONTINGENT ONE. TH E LIABILITY IS IN PRESENT THOUGH IT WILL BE DISCHARGED AT A FUTURE DATE. IT DOES NOT MA KE ANY DIFFERENCE IF THE FUTURE DATE ON WHICH THE LIABILITY SHALL HAVE TO BE DISCHA RGED IS NOT CERTAIN. 9. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT, WE A LLOW THE APPEAL OF THE ASSESSEE. ITA NO. 3045 /AHD/2014 . A.Y. 2011-1 2 4 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 25- 01- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 25/01/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD