Rajlaxmi Prints Pvt.Ltd., Surat V. The Addl.CIT., Range-4, Surat

ITA 4393/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5489 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 11-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING :28-7-10 DRAFTED ON: 28-7-2010 ITA NO. 4393 /AHD/ 2007 ASSESSMENT YEAR :2004-05 RAJLAXMI PRINTS PVT.LTD., 246/1, GIDC ESTATE, PANDESARA, PO: PANDESARA, SURAT. VS. ADDL.COMMISSIONER OF INCOME TAX,RANGE-4, ROOM NO.201, AAYAKAR BHAVAN, MAJURA GATE,SURAT. PAN/GIR NO. : AABCR 1036 R (A PPELLANT ) .. ( RESPONDENT ) APPELLANT B Y : SHRI S. K. KABRA. RESPONDENT BY: SHRI SUDHANSHU S.JHA, D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I,SURAT DATED 17-9-2007. 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON THE FACTS OF THE CASE IN UPHOLDING THE ADDITION ON ACCO UNT OF PART PAYMENT OF WATER CHARGES TO SMC AGAINST ARREAR AND CURRENT BILL ISSUED DURING THE YEAR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E CLAIMED DEDUCTION OF `.15,07,250/- LAKHS AS WATER CHARGES P AID TO SURAT MUNICIPAL CORPORATION. ON QUERY RAISED BY THE LEAR NED ASSESSING OFFICER THE ASSESSEE EXPLAINED THAT THE ACTUAL INST ALLED CAPACITY OF THE PREMISES OF THE ASSESSEE IS 8 LAKH LITRES PER D AY WHEREAS THE ASSESSEES REQUIREMENT WAS ONLY 5 LITRES PER DAY. T HE SURAT MUNICIPAL CORPORATION WAS NOT LEVYING ANY CHARGES T OWARDS THE - 2 - COMMITTED WATER SUPPLY SINCE INCEPTION. HOWEVER, ON 31-12-2003 FOR THE FIRST TIME A DEMAND NOTICE OF AMOUNT OF `. 1,50,72,500/- WAS MADE BY THE SURAT MUNICIPAL CORPORATION WHICH I NCLUDED THE PAYMENT OF COMMITTED WATER SUPPLY FROM THE FINANC IAL YEAR 1999- 00 TO 2003-04. ACCORDING TO THE ASSESSEE THE ISSUE IS SUBJECT OF ON GOING DISPUTE WITH THE SURAT MUNICIPAL CORPORATION IN THE HIGH COURT OF GUJARAT BETWEEN SURAT MUNICIPAL CORPORATIO N AND SOCIETY OF FACTORIES LOCATED AT PANDESARA AT THE LEVEL OF S URAT MUNICIPAL CORPORATION. HOWEVER, PENDING THE RESOLUTION OF DIS PUTE ASSESSEE MADE AN ADHOC PAYMENT OF `.15,07,250/- LAKHS WITH T HE SURAT MUNICIPAL CORPORATION AGAINST THE LIABILITIES ON AC COUNT OF RECEIPT OF ASSURED WATER SUPPLY. ACCORDING TO THE LEARNED ASS ESSING OFFICER THE LIABILITY TO PAY CHARGES FOR INSTALLED WATER CA PACITY ARISES ON THE DAY OF INSTALLATION OF WATER SUPPLY AND THE DEMAND RAISED FROM FINANCIAL YEAR 1999-00 TO FINANCIAL YEAR2003-04 WOU LD BECOME EARLIER YEARS EXPENSES AND THEREFORE, WOULD NOT BE ALLOWABLE IN THE CURRENT YEAR. FURTHER, THE DEMAND FOR ASSURED SUPPL Y CANNOT ACCRUE TILL THE SETTLEMENT OF THE DISPUTE BETWEEN T HE SURAT MUNICIPAL CORPORATION AND THE ASSESSEE IN THE COURT OF LAW THEREFORE, THE LEARNED ASSESSING OFFICER DISALLOWED DEDUCTION OF `.15.70 LAKHS TO THE ASSESSEE AS IT DID NOT RELATE TO ANY PARTICULAR ASSESSMENT YEAR AND THE PAYMENT WAS ON ADHOC BASIS. 3. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER. 4. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE ARGUED THAT SIMILAR PAYMENT OF `.15,07,250/- WAS MA DE TO SURAT MUNICIPAL CORPORATION IN THE ASSESSMENT YEAR 2005-0 6 WHICH WAS ALLOWED BY THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) AND THE REVENUE IS NOT IN APPEAL AGAINST THE SAID ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE, FAC TS BEING IDENTICAL THE DISALLOWANCE MADE IN THE YEAR SHOULD BE DELETED. - 3 - 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDERS OF THE LOWER AUTHORITIES BELOW. 6. IN THE INSTANT CASE, THE UNDISPUTED FACTS OF THE CASE ARE THAT SURAT MUNICIPAL CORPORATION RAISED A DEMAND OF `. 1 ,50,72,500/- ON THE ASSESSEE ON 31-12-2003 IN RESPECT OF WATER TAX FOR THE PERIOD FROM F.,Y,. 1999-00 TO FINANCIAL YEAR 2003-04. THE ASSESSEE PAID `. 15,07,250/- OUT OF THE ABOVE DEMAND DURING THE REL EVANT PREVIOUS YEAR AND CLAIMED A DEDUCTION IN RESPECT OF THE SAID PAYMENT. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE DEMAND RELATES TO EARLIER PERIOD AND ALSO OBSERVED THAT THE ASSESSEE HAS NOT ACCEPTED THE DEMAND BUT HAS FILED AN APPEAL THERE A GAINST AND THEREFORE, THE DEMAND HAS NOT BEEN CRYSTALLIZED AT THE END OF THE RELEVANT PREVIOUS YEAR AND THEREFORE, THE DEDUCTION OF `,15,07,250/- CLAIMED BY THE ASSESSEE WAS NOT ALLOW ABLE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) CONFIRMED THE ACTION OF THE LEARNED ASSESSING OFFIC ER. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT THE PAYMENT IS COVERED BY THE PROVISIONS OF SE CTION 43B OF THE ACT. HE ALSO POINTED OUT THAT SIMILAR PAYMENT OF `. 15,07,250/- PAID IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEA R 2005-06 WAS ALLOWED BY THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) AND THE REVENUE HAS ACCEPTED THE ORDER OF THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) AND NOT FILED ANY APPEAL THE RE AGAINST. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTAT IVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. WE F IND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS ACTUALLY PAID `. 1 5,07,250/- AS WATER TAX DURING THE YEAR UNDER CONSIDERATION. THUS , IN VIEW OF PROVISIONS OF SECTION 43B IRRESPECTIVE OF THE YEAR TO WHICH ITS LIABILITY RELATES DEDUCTION FOR THE SAME IS ALLOWAB LE TO THE ASSESSEE IN THE YEAR OF ACTUAL PAYMENT. FURTHER, THE REVENUE COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT THE ORDER PASSE D BY THE SURAT MUNICIPAL CORPORATION WAS REVERSED BY ANY HIGHER AU THORITY DURING THE RELEVANT PREVIOUS YEAR. IN ABSENCE OF SUCH MAT ERIAL REVENUE WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO PAY - 4 - WATER TAX AS DEMANDED BY THE SURAT MUNICIPAL CORPOR ATION MERELY BECAUSE THE ASSESSEE HAS DISPUTED THE SAME. IN OUR CONSIDERED OPINION, IF IN SUBSEQUENT YEAR ANY HIGHER AUTHORITY HOLDS THAT THE DEMAND RAISED BY SURAT MUNICIPAL CORPORATION WAS ER RONEOUS AND THE ASSESSEE WAS NOT LIABLE TO PAY WATER TAX, THEN THE CONSEQUENCES OF THE SAME WILL LIE IN THE YEAR IN WH ICH THE ASSESSEE GETS THE REFUND OF THE PAYMENT MADE AND NOT DURING THE YEAR UNDER CONSIDERATION. THEREFORE, IN OUR CONSIDERED VIEW THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DISALLOWING THE C LAIM FOR DEDUCTION OF `. 15,07,250/-. WE ACCORDINGLY DELETE THE DISALL OWANCE OF `. 15,07,250/- AND ALLOW THIS GROUND OF APPEAL IF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30TH JULY,2010 SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD; ON THIS 30TH DAY OF JULY, 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. C IT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON ------------- ----------- -------- 2. DRAFT PLACED BEFORE AUTHORITY ------------- - ------------------ 3. DRAFT PROPOSED & PLACED ------------- -------- ----------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER ----------- ----- ------------------- JM 5. APPROVED DRAFT COMES TO P.S ---------------- -- ------------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------