DCIT, Circle -2, Kolkata, Kolkata V. M/s. Webel Consumer Electronics Ltd., Kolkata

ITA 392/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8183 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A P ROY
• Assessee Lawyers: N O N E
• Section: 143(3)

Judgement Text

I.T.A. NO. 392/ KOL. / 2012 AS SESSMENT YEAR : 2003-04 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO.: 392/ KOL. / 2012 ASSESSMENT YEAR : 2003-04 DEPUTY COMMISSIONER OF INCOME TAX,.....APPEL LANT CIRCLE-2, KOLKATA, AAYAKAR BHAWAN,7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. WEBEL CONSUMER ELECTRONICS LTD.,....RES PONDENT, BLOCK BN, SECTOR-V, SALT LAKE, KOLKATA-700 091 [PAN :AAACW 3169P] APPEARANCES BY: A.P. ROY, SR. D.R., FOR THE APPELLANT N O N E, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 19, 2012 DATE OF PRONOUNCING THE ORDER : DECEMBER 28, 2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF LEARNED COMMISSIONER OF INCOME TAX ( APPEALS)S ORDER DATED 15 TH DECEMBER, 2011, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSM ENT YEAR 2003-04 ON THE FOLLOWING GROUNDS :- I.T.A. NO. 392/ KOL. / 2012 AS SESSMENT YEAR : 2003-04 PAGE 2 OF 4 (1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED BOTH ON THE FACTS AND IN LAW IN DELETI NG THE DISALLOWANCE OF RS.26,72,243/- ON ACCOUNT OF INTERE ST PAYABLE DUE TO NON PAYMENT OF W.B. SALES TAX WITHIN SPECIFIED TIME. (2) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) ERRED BOTH ON THE FACTS AND IN LAW IN DELETI NG THE DISALLOWANCE OF RS.3,660/- ON ACCOUNT OF INTEREST P AID ON CENTRAL SALES TAX. 2. NONE APPEARED FOR THE ASSESSEE. BUT LD. COUNSEL FOR THE ASSESSEE SHRI SAUNAK RAY HAS FILED A WRITTEN SUBMISSION, WHI CH HAS BEEN DULY TAKEN ON RECORD AND TAKEN INTO CONSIDERATION. LD. D .R. FAIRLY ACCEPTS, AS HAS BEEN POINTED OUT BY THE LD. COUNSEL FOR THE ASS ESSEE IN HIS WRITTEN SUBMISSION, THAT THE ISSUES IN APPEAL ARE SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-03. HE, HOWEVER, SUBM ITS THAT EVEN THOUGH THE MATTER IS COVERED IN FAVOUR OF THE ASSES SEE, HE WOULD NEVERTHELESS RELY UPON THE STAND OF THE ASSESSING O FFICER. 3. WE FIND THAT VIDE ORDER DATED 9 TH JUNE, 2006 IN ASSESSEES OWN CASE IN ITA NO. 2160/KOL./2005 FOR THE ASSESSMENT Y EAR 2002-03, COORDINATE BENCH HAS, INTER ALIA, OBSERVED AS FOLLO WS :- 3. THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTUR ING AND TRADING OF TELEVISION SETS. DURING THE ASSESSME NT PROCEEDINGS THE AO FOUND THAT A SUM OF RS.69,54,709 /- WAS DEBITED AS INTEREST PAYABLE ON SALES TAX. THE ASSES SEES EXPLANATION WAS THAT THIS SUM WAS PAID AS PENAL INT EREST DUE TO CONCEALMENT OF SALES TAX WITHIN SPECIFIED DA TE. THE AO WAS OF THE VIEW THAT THIS EXPENDITURE WAS PENAL IN NATURE AND, THEREFORE, HE DISALLOWED AN AMOUNT OF RS.69,54,709/-. I.T.A. NO. 392/ KOL. / 2012 AS SESSMENT YEAR : 2003-04 PAGE 3 OF 4 4. IN APPEAL, THE ASSESSEES PLEA WAS THAT THIS WAS NOT A PENAL INTEREST, THIS WAS INTEREST ON SALES TAX RATH ER IT WAS A COMPENSATORY IN NATURE. THEREFORE, THE SAME IS ALLO WABLE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF MAHALAXMI SUGAR MILLS CO. VS.- CIT (1980) REPORTED IN 123 ITR 429 (SC). THE LD. CIT(A) AGREED WITH THE CONTENTION OF THE ASSESSEE AND DELETED THIS DIS ALLOWANCE MADE BY THE AO BY RELYING ON THE SAID DECISION OF T HE HONBLE SUPREME COURT. 5. HEARD BOTH THE PARTIES PERUSED THE RECORD AND TH E ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE L D. CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE MADE BY THE AO AS THE INTEREST ON SALES TAX WAS A COMPENSATORY IN NATURE AND NOT A PENAL IN NATURE. WE FURTHER FIND THAT THE RATIO O F DECISION AS RELIED BY THE LD. CIT(A) IN DELETING THE DISALLO WANCE MADE BY THE AO IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. THEREFORE, THE SAME IS UPHELD. THE GR OUND TAKEN BY THE DEPARTMENT IS HEREBY DISMISSED. 4. WE FURTHER FIND THAT IN THE IMPUGNED ORDER PASSE D BY THE LD. COMMISSIONER, COMMISSIONER HAS MERELY FOLLOWED THE ABOVE OBSERVATIONS AND DECISION TAKEN BY THE COORDINATE B ENCH. IN THIS VIEW OF THE MATTER, AND RESPECTFULLY FOLLOWING THE DECIS ION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2002-03, WE SEE NO REASON TO INTERFERE IN THE IMPUG NED ORDER. WE ACCORDINGLY CONFIRM AND UPHOLD THE SAME. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF DECEMBER, 2012. SD/- SD/- GEORGE MATHAN PRAMOD KUMAR (JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 28 TH DAY OF DECEMBER, 2012 I.T.A. NO. 392/ KOL. / 2012 AS SESSMENT YEAR : 2003-04 PAGE 4 OF 4 COPIES TO : (1) THE ASSESSEE (2) THE DEPARTMENT (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.