DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR V. M/S RAJASTHAN SMALL INDUSTRIES CORPORATION LTD., JAIPUR

ITA 333/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6163 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 333/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2003-04. DY. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S. RAJASTHAN SMALL INDUSTRIES CORPORATION LTD., UDHYOG BHAWAN, C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACR 6761 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01.05.2018 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 02/05/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27.10.2017 OF LD. CIT (A), BIKANER FOR THE ASSESSMENT YEAR 2003-0 4. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE RESPONDENT WHEN THIS APPEAL WAS CAL LED FOR HEARING, DESPITE THE NOTICE ISSUED TO THE ASSESSEE THROUGH AO. ACCORDIN GLY, WE PROPOSE TO HEAR AND DISPOSE OFF THIS APPEAL OF THE REVENUE EX PARTE. TH E REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) WAS JUSTIFIED IN DELETING TH E ADDITION OF RS. 1,17,16,500/- MADE BY THE A.O. ON ACCOUNT OF ACCRUA L OF WHARFAGE CHARGES. 2 ITA NO. 333/JO/2018 M/S. RAJASTHAN SMALL INDUSTRIES CORPORATION LTD. (II) WHETHER ON PROPER APPRECIATION OF THE PROVISIO NS OF CUSTOMS ACT, IMPORT PROCEDURE ETC, IT COULD BE SAID THAT TH E DEMURRAGE/WHARFAGE CHARGES HAD NOT ACCRUED TO THE A SSESSEE PARTICULARLY WHEN THE ASSESSEE FOLLOWED MERCANTILE SYSTEMS OF ACCOUNTING AND THERE WAS EXISTING RIGHT IN FAVOUR O F ASSESSEE TO RECEIVE THE CHARGES. (III) THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. WE HAVE HEARD THE LD. D/R AS WELL AS CONSIDERED THE IMPUGNED ORDERS OF THE AO AS WELL AS OF THE LD. CIT (APPEALS). THE AO HAS MADE AN ADDITION OF RS. 1,17,16,500/- ON THE ASSUMPTION THAT THE SAID INCOM E HAD ACCRUED TO THE ASSESSEE ON ACCOUNT OF WHARFAGE CHARGES AS AN IDENTICAL ADDI TION WAS MADE FOR THE ASSESSMENT YEAR 1997-98. THE LD. D/R HAS STRONGLY SUPPORTED THE ORDER OF THE AO. WE FIND THAT THE LD. CIT (A) HAS DEALT WITH THE ISS UE AS UNDER :- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE S UBMISSION MADE. ON VERIFICATION OF THE PAPERS SUBMITTED BY THE A/R FOR THE APPELLANT, IT IS OBSERVED THAT THE WHARFAGE CHARGES ALREADY STAND AC COUNTED FOR IN THE INCOME SHOWN BY THE APPELLANT AS EXPLAINED BY HIM. THEREFORE, THERE WAS NO QUESTION OF DISALLOWANCE ON THIS ACCOUNT. EV EN IF THE ASSESSEE HAD CLAIMED THIS AMOUNT THEN ALSO, IT WOULD HAVE BE EN ALLOWABLE AS PER THE HONBLE ITAT DECISION IN THE EARLIER YEARS. WHILE ADJUDICATING ON THE ISSUE FOR ASSESSMENT YEAR 1993-94, THE HONB LE ITAT HELD AS UNDER :- WE HAVE HEARD THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL PLACED ON RECORD. UNDISPUTEDLY, THE DEMURRAGE/WHARF AGE CHARGES BILLED ON BY THE ASSESSEE ARE DISPUTED BEFO RE THE HIGH COURT AND THE HONBLE SUPREME COURT. THIS IS, THERE FORE, NATIONAL INCOME AND NOT A REAL INCOME, AS AGREED BY THE LD. D.R. THESE CHARGES ARE NOT ADMITTED BY THE RIVAL PARTIES , WHO HAVE TAKEN THE MATTER TO THE COURTS AND, THEREFORE, WE A RE OF THE 3 ITA NO. 333/JO/2018 M/S. RAJASTHAN SMALL INDUSTRIES CORPORATION LTD. OPINION THAT THE INCOME IN QUESTION HAS NOT ACCRUED . IN THE CASE OF CIT V. GOVIND PRASAD PRABHU NARAIN, THE ALLAHABA D HIGH COURT HAVE DISTINGUISHED THE WORDS INCOME RECEIVED , ACCRUES OR ARISES. IN THE INSTANT CASE ASSESSEE FIRM WAS T RADING IN FERTILIZER. IN MAINTAINED ITS ACCOUNT OF MERCANTILE SYSTEM. THE GOVERNMENT OF U.P. REVISED THE RATES OF FERTILIZER FROM JUNE 1, 1974. LATER ON, THE UP GOVT. ISSUED AN ORDINANCE SA YING THAT STOCK OF FERTILIZER AS MAY, 1971 WILL BE SOLD AT OL D RATES. THIS WAS CHALLENGED BY THE FERTILIZER DEALERS. THE SUPREME C OURT PASSED AN INTERIM ORDER TO DEPOSIT THE EXCESS PRICE WITH T HE DISTRICT MAGISTRATE CONCERNED IN A SEPARATE ACCOUNT. THE CLA IM OF THE ASSESSEE WAS THAT THIS AMOUNT DID NOT REPRESENT ITS INCOME. THE HONBLE SUPREME COURT HELD THAT, IT COULD NOT BE SAID THAT THERE WAS IN EXISTENCE A RIGHT IN FAVOUR OF THE ASS ESSEE TO RECEIVE THE AMOUNT IN QUESTION. THE AMOUNT HAD NOT ACCRUED OR ARISEN TO THE ASSESSEE, NOR WAS RECEIVED BY IT. IT WAS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE. THE FACTS OF THE ASSESSEE ARE WORST THAN THE ABOVE CITED CASE, INASMUCH AS, THE ASSESSEE HAS NOT RECEIVED ANY AMOU NT. EVEN THE LEVY OF THE DEMURRAGE/WHARFAGE CHARGES WERE DIS PUTED. IN ANOTHER CASE, THE ALLAHABAD HIGH COURT CITED AS 194 IRT 282 HELD THAT THE TRIBUNAL WAS RIGHT IN HOLDING THAT D URING THE RELEVANT PREVIOUS YEAR INTEREST DID NOT ACCRUE BE CAUSE DURING THE WHOLE OF THIS PERIOD, SUITS FILED FOR RECOVERY OF THE SAID LOANS WERE PENDING AND THE AWARDING OF INTEREST FOR THIS PERIOD WAS WITHIN THE DISCRETION OF THE COURT WHICH WAS YET TO PRONOUNCE JUDGEMENT. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCU MSTANCES OF THE CASE AND ALSO THE DECISION OF THE APEX COURT IN THE CASE OF HINDUSTAN HOUSING & LAND DEVELOPMENT TRUST AND THE DECISION IN THE CASE OF P. MARIAPPA GOUNDER CITED SUPRA, WE HAVE NO HESITATION IN HOLDING THAT THE AMOUNT IN QUESTION C ANNOT BE TAXED IN THE HANDS OF THE ASSESSEE DURING THE YEAR IN QUESTION. IN VIEW OF THE ABOVE FACTS AND RESPECTFULLY FOLLOWI NG THE DECISION OF THE HONBLE ITAT IN THE APPELLANTS OWN CASE IN EARLIER YEARS THE ADDITION MADE BY THE AO OF RS. 1,17,16,500/- IS HELD TO BE U NJUSTIFIED AND THE SAME IS DELETED. THE APPELLANT SUCCEEDS ON THIS GRO UND. 4 ITA NO. 333/JO/2018 M/S. RAJASTHAN SMALL INDUSTRIES CORPORATION LTD. THUS IT IS CLEAR THAT AN IDENTICAL ISSUE WAS CONSID ERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1993-94 IN FAVOUR OF THE ASSESSEE. THE AO IN THE ASSESSMENT ORDER HAS MADE THIS ADDITION ONLY ON THE BASIS OF THE EARLIER ADDITION MADE ON THIS ACCOUNT FOR AN IDENTICAL AMOUNT. THERE FORE, WHEN THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF LD. CIT (A). FOLLOWING THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE, THE APPEAL OF THE REVENUE IS DISMISSED. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 02/05/20 18. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/05/2018. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT CIRCLE-6, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-M/S. RAJASTHAN SMALL INDUSTRIES CORP N. LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 333/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR