The ACIT, Circle-6, Ahmedabad V. M/s. Kastwel Foundries, Ahmedabad

ITA 469/AHD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50984 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIAAR
• Section: 43B

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., !'# $ $ $ $ %% % &, ' ( # BEFORE SHRI G.D.AGARWAL, VICE-PRESIDENT AND SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER 1. $./ I.T.A. NO.469/AHD/2011 2. $./ I.T.A. NO.684/AHD/2011 ( + + + + / / / / ASSESSMENT YEAR : 2006-07) 1. THE ACIT CIR-6 AHMEDABAD 2. M/S.KASTWEL FOUNDRIES 46/A / VS. 1. M/S.KASTWEL FOUNDRIES 46/A, PHASE-I, GIDC VATVA, AHMEDABAD 2. THE JT.CIT RANGE-6, AHMEDABAD ', (- $./. $./ PAN/GIR NO. : AABFK 9088 K ( ,/ / // / APPELLANTS ) .. ( 01,/ / RESPONDENTS ) REVENUE BY : SHRI SAMIR TEKRIWAL, SR.D.R. ASSESSEE BY : SHRI S.N. DIVATIA, A.R. % 2 3 &- / / / / DATE OF HEARING : 30/11/2011 45+ 3 &- / DATE OF PRONOUNCEMENT : 30/11/2011 (6 / O R D E R PER BENCH : THESE ARE THE CROSS APPEALS ARISING FROM THE ORDER OF THE LD.CIT(A)-XI, AHMEDABAD DATED 03/12/2010 PASSED F OR A.Y. 2006-07. (A) REVENUES APPEAL; ITA NO.469/AHD/2011 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS AP PEAL READS AS FOLLOWS:- ITA NO.469/AHD/2011 (BY REVE NUE) AND ITANO.684/AHD/2011 (BY ASSESSEE) ACIT VS. KASTWEL FOUNDRIES ASST.YEAR - 2006-07 - 2 - 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERR ED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 9,89,375/- ON ACCOUNT OF DISALLOWANCE OF PRIOR PERIOD SALES-TAX EXPENSES, SI NCE PAYMENT WAS MADE IN SETTLEMENT SCHEME. 2.1. IN RESPECT OF THE ABOVE GROUND, THE ASSESSING OFFICER HAS DISCUSSED VIDE ORDER U/S.143(3) OF THE I.T. ACT DAT ED 26/12/2008 THAT THE ASSESSEE-FIRM WHICH IS IN THE BUSINESS OF MANUFACTU RING OF FERRO ALLOYS CLAIMED AN EXPENDITURE ON PAYMENT OF SALES TAX WHI CH RELATED TO THE A.YS. 2001-02 & 2002-03. AO HAS STATED THAT SALE S TAX OF RS.5,89,375/- WHICH PERTAINED TO THE A.Y.2001-02 WA S CLAIMED ON PAYMENT BASIS FOR THE ASSESSMENT YEAR UNDER CONSIDE RATION. LIKEWISE, SALES TAX PERTAINED TO THE A.Y. 2002-03 OF RS.4,00, 000/- WAS PAID AND CLAIMED DURING THE YEAR. ACCORDINGLY, THE ADDITI ON WAS MADE WHICH WAS CHALLENGED. 3. THE LD.CIT(A) HAS NARRATED THE FACTS AND ALLOWED THE CLAIM AS FOLLOWS:- 3. WITH REGARD TO THE FIRST GROUND OF APPEAL ON AC COUNT OF DISALLOWANCE OF RS.8,89,375/- IN RESPECT OF PAYMENT OF SALES-TAX, IN THE WRITTEN SUBMISSIONS, THE A.R. OF THE APPELLANT HAS GIVEN THE FACTS OF THE CASE, OBSERVATIONS OF THE ASSESSING OF FICER AND HIS COMMENTS THEREON. THE RELEVANT PARAS OF THE SAME A RE REPRODUCED HEREUNDER:- FACTS :- THE ASSESSMENT UNDER SALES-TAX ACT CAME TO BE FINALIZED FOR A.Y. 2001-02 AND 2002-03 WHERE IN THE DEMAND OF RS.5,89,375/- AND RS.4,00,000/- RESPECTIVELY CA ME TO BE RAISED WHICH WAS DISCHARGED BY THE APPELLANT IN THE YEAR UNDER APPEAL. ITA NO.469/AHD/2011 (BY REVE NUE) AND ITANO.684/AHD/2011 (BY ASSESSEE) ACIT VS. KASTWEL FOUNDRIES ASST.YEAR - 2006-07 - 3 - A.OS OBSERVATIONS : ACCORDING TO THE A.O. THE ORDER WAS PASSED IN JUNE,05 AND I.E. BEFORE THE YEAR AND THER EFORE THE PAYMENT MADE IN CURRENT YEAR CANNOT BE ALLOWED SINC E THE LIABILITY WAS RAISED IN EARLY YEAR. APPELLANTS REPLY : THE ASSESSMENT ORDER WAS ACTUALLY PASSED ON 20-10-2005 AND WAS RECEIVED ON 28-12-2005 . THE APPELLANT HAS PAID THE AMOUNT OF RS.4,77,665/- ON 09-01-2006. 3.1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS SUBMITTED BY THE A.R. OF THE APPELLANT THAT THE ACT ION OF THE ASSESSING OFFICER IS NOT JUSTIFIED. 3.1.2. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A.R. OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. ASSESSING OFFICERS OBSERVATION THAT THE SALES- TAX ASST ORDER WAS PASSED IN JANUARY, 2005 IS FACTU ALLY INCORRECT, AS IT WAS PASSED IN OCTOBER, 2005. A.O. HAS NOT DI SPUTED THE PAYMENT OF IMPUGNED SALES-TAX DURING THE YEAR UNDER CONSIDERATION. HENCE DISALLOWANCE IS UNWARRANTED. IT IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE FIND NO FORCE IN THIS GROUND OF THE REVENUE PRIMARILY BECAUSE OF THE EXISTENCE OF SECTION 43B OF THE I.T. ACT, WHICH SAYS THAT CERTAI N DEDUCTIONS ARE TO BE ALLOWED ON ACTUAL PAYMENT BASIS. FURTHER, AS OBSER VED BY THE FIRST APPELLATE AUTHORITY THE SALES TAX DEMAND WAS RAISED WHEN THE SALES TAX ASSESSMENT WAS PASSED IN OCTOBER-2005 AND THEREAFTE R THE AMOUNTS OF SALES TAX DEMAND WERE PAID BY THE ASSESSEE AND ACCO RDINGLY DEBITED TO P&L ACCOUNT. UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO FALLACY IN THE LEGAL AS WELL AS FA CTUAL FINDING OF ITA NO.469/AHD/2011 (BY REVE NUE) AND ITANO.684/AHD/2011 (BY ASSESSEE) ACIT VS. KASTWEL FOUNDRIES ASST.YEAR - 2006-07 - 4 - LD.CIT(A), THEREFORE, CONFIRM THE SAME. THIS GROUN D OF THE REVENUE IS HEREBY DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. (B) ASSESSEES APPEAL; ITA NO.684/AHD/2011 6. THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD .CIT(A)-XI AHMEDABAD DATED 03/12/2010 THROUGH WHICH THE DISALL OWANCE OF AMOUNT OF RS.1,32,073/- STATED TO BE IN RESPECT OF A PENAL TY LEVIED BY THE SALES TAX DEPARTMENT WAS AFFIRMED. AT THE OUTSET, LD.AR MR.S.N.DIVATIA, HAS STATED NOT TO PRESS THE ISSUE CONSIDERING THE SMALL NESS OF THE AMOUNT INVOLVED. THEREFORE, THIS GROUND IS ACCORDINGLY DI SMISSED. 7. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT JU DICIAL MEMBER AHMEDABAD; DATED 30/ 11 /2011 7.. , . ../ T.C. NAIR, SR. PS (6 3 0&8 (8+& (6 3 0&8 (8+& (6 3 0&8 (8+& (6 3 0&8 (8+&/ COPY OF THE ORDER FORWARDED TO : 1. ,/ / THE APPELLANT 2. 01,/ / THE RESPONDENT. 3. $$ & %9 / CONCERNED CIT 4. %9() / THE CIT(A)-XI, AHMEDABAD 5. 8<= 0& , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. = >2 / GUARD FILE. (6 % (6 % (6 % (6 % / BY ORDER, 18& 0& //TRUE COPY// ! !! !/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD