ACIT, Cochin V. Smt T.Beena, Kottayam

ITA 480/COCH/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7807 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 10-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: R KRISHNAN
• Keywords: Period of limitation

Judgement Text

1 ITA NO. 480/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.TA NO. 480/COCH/2010 (ASSESSMENT YEAR 2007-08) A.C.I.T., CIR.1 VS SMT. T BEENA KOTTAYAM M/S SEEMATTI, KOTTAYAM PAN : ABOPT2020Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ABHIMANYU SINGH YADAV RESPONDENT BY : SHRI R KRISHNAN DATE OF HEARING : 23-04-2012 DATE OF PRONOUNCEMENT : 31-05-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-IV, KOCHI DATED 19-05-2010 FOR THE AS SESSMENT YEAR 2007-08. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS. 23,772. 3. SHRI ABHIMANYU SINGH YADAV, THE LD.DR SUBMITTED THAT THE ASSESSEE COULD NOT PAY THE AMOUNT FOR LONG PERIOD AND THERE WAS NO CHA NCE OF IT BEING PAID, THEREFORE, THE LIABILITY HAS CEASED FOR ALL PRACTICAL PURPOSE ON E XPIRY OF THE PERIOD OF LIMITATION. 4. SHRI R KRISHNAN, THE LD.REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAS MADE ADDITION OF RS. 23,772 TOWARDS TH E CREDIT BALANCE OUTSTANDING WITH M/S SWARAJ INDUSTRIAL CORPORATION. ACCORDING TO TH E LD.REPRESENTATIVE FOR THE ASSESSEE THE CREDITOR HAS NOT PAID THE CORPORATION TAX DUE T O THE GOVERNMENT, THEREFORE, THE 2 ITA NO. 480/COCH/2010 OUTSTANDING BALANCE CONTINUES WITH THE ASSESSEE. T HE AMOUNT WAS NOT WRITTEN BACK IN THE BOOKS OF ACCOUNT. THEREFORE, THE ASSESSING OFF ICER CANNOT UNILATERALLY SAY THAT THE AMOUNT REMAINED UNPAID FOR LONG PERIOD CEASED TO EX IST. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL ON RECORD. NO DOUBT, ON EXPIRY OF THE PERIOD OF LIMIT ATION, THE CREDITOR CANNOT ENFORCE THE DEBT FROM THE ASSESSEE THROUGH A COURT OF LAW. HOW EVER, THE DEBT CONTINUES TO EXIST AND THE RIGHT OF THE CREDITOR TO RECOVER THE AMOUNT FROM THE ASSESSEE CONTINUES TO EXIST. WHAT WAS BARRED BY LAW IS THE ENFORCEABILITY OF THE DEBT THROUGH COURT OF LAW. OTHER MEANS OF RECOVERY CONTINUES TO EXIST TO THE CREDITO R. THEREFORE, ADDITION OF SUCH AN AMOUNT UNILATERALLY BY THE ASSESSING OFFICER MAY NO T BE JUSTIFIED. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED T HE ADDITION OF RS.23,722. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF RS. 10,00,026. 7. SHRI ABHIMANYU SINGH YADAV, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS PAID VARIOUS AMOUNTS TO CHURCHES, TEMPLES, ETC. FOR ADVE RTISING PURPOSE. ACCORDING TO THE LD.DR, THE PAYMENTS MADE TO CHURCHES, TEMPLES AND C LUBS FOR ADVERTISEMENT CANNOT BE FOR BUSINESS PURPOSE. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. HOWEVER, THE COMMISSIONER OF INCOME-TAX(A) WITHOUT EXAMINING THE FACT OF THE CASE DELETED THE ADDITION. 8. ON THE CONTRARY, SHRI R KRISHNAN, THE LD.REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY THE ASSESSEE PAID MONEY T O TEMPLES, CHURCHES AND CLUBS FOR ADVERTISEMENT. THE ASSESSING OFFICER, WITHOUT ANY REASON HAS RESTRICTED THE CLAIM TO 50% AND DISALLOWED 50% OF THE EXPENDITURE. THE COM MISSIONER OF INCOME-TAX(A), AFTER CONSIDERING THE FACT OF THE CASE HAS ALLOWED THE EN TIRE CLAIM. 3 ITA NO. 480/COCH/2010 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL ON RECORD. THE FACT THAT THE AMOUNT WAS PAID TO THE C HURCHES, TEMPLES, CLUBS FOR ADVERTISEMENT IS NOT IN DISPUTE. ONCE THE ASSESSEE FELT THAT PLACING ADVERTISEMENT IN CHURCHES, TEMPLES, CLUBS ETC WOULD PROMOTE ITS BUSI NESS, THE ASSESSING OFFICER CANNOT RESTRICT THE EXPENDITURE TO 50%. IF THE PAYMENT IS NOT GENUINE, IT IS OPEN TO THE ASSESSING OFFICER TO DISALLOW THE ENTIRE PAYMENT. IN THE ABSENCE OF ANY MATERIAL TO SUGGEST THAT THE PAYMENTS WERE NOT MADE FOR ADVERTI SEMENT PURPOSES, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER IS NOT JU STIFIED IN RESTRICTING THE DISALLOWANCE TO 50%. THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE COMMISSIONER OF INCOME- TAX(A). WE CONFIRM HIS ORDER. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST MAY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 31 ST MAY, 2012 PK/- COPY TO: 1. A.C.I.T., CIR.1, KOTTAYAM 2. SMT. T BEENA, M/S SEEMATTI, KOTTAYAM 3. COMMISSIONER OF INCOME-TAX(A)-IV, KOCHI 4. COMMISSIONER OF INCOME-TAX, KOTTAYAM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH