NEVITAD DISTILLERS P.LTD, NASHIK V. ITO WD 1(3), KALYAN

ITA 353/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1236 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 21-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 22-01-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.353/M/2016 (AY 2006 - 2007) M/S. NEVITAD DISTILLERS PVT LTD., PLOT NO.57A, ADJACET TO OM CHAMBERS, NEAR K.J. MEHTA HIGH SCHOOL, NASHIK, PUNE - 422101. / VS. ITO WARD 1(3), MOHAN PLAZA, KHADAKPADA, KALYAN (W). ./ PAN : AAACN1695B ( / APPELLANT) .. ( / RESPONDENT ) ITA NO.5081/M/2015 (AY 2006 - 2007) ITO WARD 1(3), MOHAN PLAZA, KHADAKPADA, KALYAN (W). / VS. M/S. NEVITAD DISTILLERS PVT LTD., PLOT NO.57A, ADJACET TO OM CHAMBERS, NEAR K.J. MEHTA HIGH SCHOOL, NASHIK, PUNE - 422101. ./ PAN : AAACN1695B ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI SUNIL MAKHIJA / REVENUE BY : MS. BEENA SANTOSH, DR / DATE OF HEARING : 21 .03.2017 / DATE OF PRONOUNCEMENT : 12 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION AND THEY ARE CROSS APPEALS FOR THE ASSESSMENT YEAR 2006 - 07. BOTH THESE APPEALS ARE FILED AGAINST THE ORDER OF THE CIT (A) - 2, MUMBAI DATED 30.7.2015. SINCE, THE ISSUES RAISED IN THESE APPEALS ARE INTER - CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. 2. DURING THE PROCEEDINGS BEFORE US, LD REPRESENTATIVES OF BOTH THE PARTIES MENTIONED THAT THE GROUNDS RAISED IN THEIR RESPECTIVE APPEALS REVOLVES AROUND THE 2 COMMON ISSUE RELATING TO THE ALLOWABILTY OF CLAIM OF DEDUCTION OF LICENSE FEES FOR THE YEAR UNDER CON SIDERATION WHEN THE SAID AMOUNT CONSTITUTES PRE - PAID ONE FOR THE BUSINESS PURPOSES OF THE ASSESSEE. REST OF THE GROUNDS ARE EITHER NOT PRESSED OR GENERAL IN NATURE. ON THE CORE ISSUE, LD COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO PAGES 14 ONWARDS O F THE PAPER BOOK AND MENTIONED THAT THE ASSESSEE IS UNDER STATUTORY OBLIGATION TO MAKE THE LICENSE FEES PAYMENTS BEFORE 30 TH MARCH OF THE EARLIER PREVIOUS YEAR FOR THE AY UNDER CONSIDERATION. LD AR FURTHER MENTIONED THAT THE LICENSE FEES PAYMENT WERE MADE BEFORE MARCH, 2005 FOR THE AY 2005 - 06 SO THAT THE ASSESSEE IS ALLO WED TO CONDUCT BUSINESS VALIDLY F O R T H A T A Y . 3. ON PERUSAL OF THE PAPERS FILED BEFORE THE TRIBUNAL AND THE EXPLANATION OF THE ASSESSEE IN THIS REGARD, I FIND, THE ASSESSEE IS CONSISTENTLY FOLLOWING T HIS METHOD OF ACCOUNTING IE MAKING LICENSE FEES IN THE EARLIER PREVIOUS YEAR FOR OBTAINING PERMISSION TO CONDUCT THE BUSINESS IN THE YEAR UNDER CONSIDERATION. CONSIDERING THE CONSISTENCY IN THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE, I AM OF THE OP INION, THE CLAIM OF THE ASSESSEE IS PROPER AND THERE IS NO NEED FOR DISTURBING THE SAME WITHOUT HAVING ANY VALID REASONS I T I F T H E A S S E S S E E I S U N D E R A N Y O B L I G A T I O N T O M A K E S U C H A D V A N C E P A Y M E N T S . HOWEVER, IN THE REMAND PROCEEDINGS, ASSESSING OFFICER SHALL ALLOW THE CLAIM OF THE ASSESSEE SUBJECT TO THE FINDING OF THE FACT THAT T HE ASSESSEE IS UNDER STATUTORY OBLIGATION TO MAKE THE PAYMENT WELL IN ADVANCE IE BEFORE THE END OF THE PRECEDING FY AND ALSO SUBJECT TO THE CONDITION THAT THE ASSESSEE F O L L O W S THIS METHOD OF ACCOUNTING CONSISTENTLY OVER THE YEARS. ACCORDINGLY, GROUND S RAISED BY THE ASSESSEE ARE ALLOWED PROTANTO. 4. CONSIDERING MY DECISION ON THE CORE ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL, THE GROUNDS RAISED BY THE REVENUE ARE REQUIRED TO BE DISMISSED. ACCORDINGLY I ORDER. THUS, THE GROUNDS RAISED BY THE REVENU E ARE DISMISSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED PROTANTO AND THE REVENUES APPEAL IS DISMISSED. ORDER PRON OUNCED IN THE OPEN COURT ON 1 2 T H APRIL, 2017. S D / - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER 3 MUMBAI ; 12.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI