The Deputy Commissioner of Income Tax Circle-6(1)(1), Bangalore V. M/s Shriram Chits( Karnataka) Pvt Ltd , Bangalore

ITA 403/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4667 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 09-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJASHEKAR
• Assessee Lawyers: LALITHA KAMESHWARAN
• Keywords: Revenue expenditure
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 403 / BANG/201 8 ASSESSMENT YEAR : 20 1 4 - 1 5 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6 (1) (1), BANGALORE. VS. M/S. SHRIRAM CHITS (KARNATAKA) PVT. LTD., NO. 259/31, 1 ST FLOOR, 10 TH CROSS, WILSON GARDEN, BANGALORE 560 027. PAN: AACCS2078R APPELLANT RESPONDENT APPELLANT BY : SHRI M. RAJASHEKAR, ADDL. CIT (DR) RESPONDENT BY : SMT. LALITHA KAMESHWARAN, ADVOCATE DATE OF HEARING : 04 .0 6 .2018 DATE OF PRONOUNCEMENT : 08 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-6, BANGALORE DATED 14.07.2017 FOR ASSESS MENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE WH ETHER THE CIT(A) IN RIGHT IN DELETING THE ADDITION WITHOUT APPRECIATING FACT THAT BID LOSS CLAIMED BY ASSESSEE IS INCORRECT AS PER PROVISIONS OF SECTION 145(1) OF THE INCOME TAX ACT, 191 AND IS NOT IN CONSONANCE WI TH THE BOARD'S NOTIFICATION NO. SO 69(E) DATED 25.01.1996 AND AS 2 2 OF ICAI. 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ITA NO.403/BANG/2018 PAGE 2 OF 3 GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS IT IS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ISSUE IN THE PRESENT CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 2013-14 IN ITA NO. 543/BANG/2017 DA TED 28.11.2017. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE TRIBUNAL IN THE EARLIER YEAR HAS FOLLOWED THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF TAPARIA TOOLS LTD. VS. JCIT AS REPORTED IN [2015] 372 ITR 605 (SC) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOR RE ADY REFERENCE, WE REPRODUCE PARAS 5 AND 6 OF THIS TRIBUNAL ORDER. THE SAME ARE AS UNDER. 5. THE IDENTICAL ISSUE WAS ALSO EXAMINED BY THE APE X COURT IN THE CASE OF TAPARIA TOOLS LTD., VS. JCIT (SUPRA) IN WHI CH THEIR LORDSHIP HAS EXAMINED THE ISSUE AND HELD THAT THE ASSESSEE I S ENTITLED FOR DEDUCTION OF THE ENTIRE EXPENDITURE. THE RELEVANT O BSERVATION OF THE HON'BLE SUPREME COURT IS EXTRACTED HEREUNDER: '17. WHAT FOLLOWS FROM THE ABOVE IS THAT NORMALLY T HE ORDINARY RULE IS TO BE APPLIED, NAMELY, REVENUE EXPENDITURE INCURRED IN A PARTICULAR YEAR IS TO BE ALLOWED IN THAT YEAR. THUS , IF THE ASSESSEE CLAIMS THAT EXPENDITURE IN THAT YEAR, THE INCOME-TAX DEPARTMENT CANNOT DENY THE SAME. HOWEVER, IN THOSE CASES WHERE THE ASSESSEE HIMSELF WANTS TO SPREAD THE EXPE NDITURE OVER A PERIOD OF ENSUING YEARS, IT CAN BE ALLOWED ONLY I F THE PRINCIPLE OF 'MATCHING CONCEPT' IS SATISFIED, WHICH UP TO NOW HAS BEEN RESTRICTED TO THE CASES OF DEBENTURES. 18. IN THE INSTANT CASE, AS NOTICED ABOVE, THE ASSE SSEE DID NOT WANT SPREAD OVER OF THIS EXPENDITURE OVER A PERIOD OF FIVE YEARS AS IN THE RETURN FILED BY IT, IT HAD CLAIMED THE EN TIRE INTEREST PAID UPFRONT AS DEDUCTIBLE EXPENDITURE IN THE SAME YEAR. IN SUCH A SITUATION. WHEN THIS COURSE OF ACTION WAS PERMISSIB LE IN LAW TO THE ASSESSEE AS IT WAS IN CONSONANCE WITH THE PROVI SIONS OF THE ACT WHICH PERMIT THE ASSESSEE TO CLAIM THE EXPENDIT URE IN THE YEAR IN WHICH IT WAS INCURRED, MERELY BECAUSE A DIF FERENT TREATMENT WAS GIVEN IN THE BOOKS OF ACCOUNT THAT CA NNOT BE A FACTOR WHICH WOULD DEPRIVE THE ASSESSEE FROM CLAIMI NG THE ENTIRE EXPENDITURE AS A DEDUCTION. IT HAS BEEN HELD REPEATEDLY BY THIS COURT THAT ENTRIES IN THE BOOKS OF ACCOUNT ARE NOT DETERMINATIVE OR CONCLUSIVE AND THE MATTER IS TO BE EXAMINED ON THE TOUCHSTONE OF THE PROVISIONS CONTAINED IN THE A CT (SEE KEDARNATH JUTE MANUFACTURING CO. LTD. V. CIT*: TUTI CORIN ALKALI CHEMICALS AND FERTILIZERS LTD. V. CIT**; SUT LEJ COTTON ITA NO.403/BANG/2018 PAGE 3 OF 3 MILLS LTD. V. CIT*** AND UNITED COMMERCIAL BANK V. CIT#. 6. WE HAVE ALSO CAREFULLY EXAMINED THE ORDER OF THE CIT(A) AND WE FIND THAT CIT HAS ADJUDICATED THE ISSUE IN CONSONAN CE WITH THE ORDER OF THE JUDGMENTS OF THE HIGH COURT AND APEX COURT A ND ACCORDINGLY WE CONFIRM THE SAME. 5. THE LD. DR OF REVENUE COULD NOT POINT OUT ANY DI FFERENCE IN FACTS IN THE PRESENT YEAR AND HENCE, RESPECTFULLY FOLLOWING THIS TRIBUNA L ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2013-14, WE DECLINE TO INT ERFERE IN THE ORDER OF CIT (A) IN THE PRESENT YEAR. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.