M/s Federal Mogul TPR (India) Ltd., New Delhi V. JCIT, New Delhi

ITA 509/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6918 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB SR DR
• Section: 143(3); 37(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI ! ! ! ! $ $$ $ $ $$ $ $ $$ $ $ $$ $ %&% %&% %&% %&% ' ' ' ' BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER & DR. B.R.R.KUMAR, ACCOUNTANT MEMBER ! ! ! !$ $$ $ / ITA NO:- 509/DEL/2017 (( (( (( (( / ASSESSMENT YEAR: 2012-13 M/S. FEDERAL MOGUL TPR (INDIA) LTD., DLF PRIME TOWER, 10 GROUND FLOOR, F-79 & 80, OKHLA PHASE-I, NEW DELHI-110020. PAN-AABCG0749E .......... )* /APPELLANT VS JCIT, SPECIAL RANGE-3, NEW DELHI. . +,)* / RESPONDENT )*-.% / APPELLANT BY : SH. PRADEEP DINODIA, CA +,)*-.% / RESPONDENT BY : MS. ASHIMA NEB, SR.DR -/0& / DATE OF HEARING : 03.10.2019 12-/0& / DATE OF PRONOUNCEMENT: 16.10.2019 % % % % / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF C IT(A)-37, NEW DELHI, DATED 01.04.2015 RELATING TO ASSESSMENT YEAR 2012-13 AGAINST THE ORDER PASSED U/S SECTION 143(3) OF THE INCOME-TAX A CT, 1961 (IN SHORT THE ACT). ITA NO:509/DEL/2017 ASSESSMENT YEAR: 2012-13 PAGE | 2 2. THE ONLY ISSUE IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF SERVICE TAX WRITE OFF OF RS.22,73,576/-. 3. BRIEFLY FACTS AND CIRCUMSTANCES IN THE CASE ARE THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DEBITED A S UM OF RS.22,73,576/- ON ACCOUNT O SERVICE TAX RECOVERABLE/WRITTEN OFF. THE ASSESSING OFFICER ASKED TO FURNISH THE DETAILS IN THIS REGARD. IN RE SPONSE THERETO, THE ASSESSEE POINTED OUT THAT THE SERVICE TAX RECOVERABLE IS THE AMOUNT OF SERVICE TAX ON WHICH CREDIT IS NOT ALLOWED UNDER TH E SERVICE TAX ACT. HENCE, IT IS TO BE CLAIMED IN THE P/L ACCOUNT IN THE AUDIT ED FINANCIAL STATEMENT OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE SERVICE TAX IS COLLECTED BY THE ASSESSEE AT THE TIM E OF RAISING INVOICES UPON THE RESPECTIVE PARTIES TOWARDS SERVICES PROVIDED, T HE SAID AMOUNT WAS TO BE DEPOSITED IN THE GOVERNMENT ACCOUNT. HE THUS OB SERVED THAT THE TRANSACTION WOULD NOT ENTITLE THE SAME AS ALLOWABLE DEDUCTION UNDER THE INCOME TAX ACT. HE THUS DISALLOWED THE SUM OF RS. 22,73,576/- AND ADDED THE SAME IN THE HANDS OF THE ASSESSEE. THE C IT(A) NOTED AND OBSERVED AS UNDER:- W.E.F 1 ST MARCH 2015, TIME LIMIT FOR AVAILMENT OF CENVAT CRE DIT HAS BEEN EXTENDED TO ONE YEAR FROM THE DATE OF INVOICE. THIS IMPLIES THAT CENVAT CREDIT ON INPUTS AND INPUT SERVICES WHICH CO ULD BE EARLIER (AS PROVIDED FOR W.E.F. 01.09.2014) AVAILED WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF INVOICE CAN NOW (W.E.F. 1.3 .2015) BE AVAILED WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF INVOIC E. 4.4. .. ITA NO:509/DEL/2017 ASSESSMENT YEAR: 2012-13 PAGE | 3 4.5. THE SAME HAS BEEN PRONOUNCED IN FOLLOWING JUD GEMENTS : CCE, AHMEDABAD VS LUBI ELECTRONICS -2009 (245) E.L.T. 55 1 (TRI-AHMD) J.V.STRIPS V. COMMISSIONER-2007 (218) E.L.T. 252 (T RIBUNAL. IN THE ABOVE SAID JUDGEMENTS, IT WAS HELD THAT THERE IS NO PROVISION FOR DENYING CREDIT OF CENVAT BECAUSE OF DELAY IN CLAIMI NG OF CENVAT BY RECEIVER OF SERVICE NOR THERE IS ANY TIME LIMIT FOR TAKING CREDIT IN THE CENVAT CREDIT RULES AND THEREFORE THERE IS NO SPECI FIC TIME LIMIT TO AVAIL CENVAT CREDIT BY SERVICE RECEIVER. FURTHER, EVEN THE SUPPLEMENTARY INSTRUCTIONS ISSUED BY THE CENTRAL BO ARD OF EXCISE AND CUSTOMS ALSO DO NOT PRESCRIBE ANY TIME LIMIT FO R THE PURPOSE TO CREDIT ALLOWED. HENCE, RECEIVER OF SERVICE CAN AVA IL INPUT TAX CREDIT ON SERVICES RECEIVED BY HIM WITHOUT ANY TIME LIMIT UNDER RULE 4(1) OF CENVAT CREDIT RULE. 4. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 5. LD.AR FOR THE ASSESSEE POINTED OUT THAT ANY INPU T OF SERVICE TAX PAID WAS TO BE SET OFF AGAINST THE SERVICE TAX RECE IVABLE. THE ASSESSEE WAS FOLLOWING SUCH A METHOD. BUT ONCE THE ASSESSEE REA LIZED THAT SERVICE TAX WAS NOT RECOVERABLE THEN THE SERVICE TAX PAID WAS D EBITED TO THE ACCOUNTS IN LATER YEARS. HE PLACED RELIANCE ON THE DECISION S OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M/S. SAMTEL INDIA LTD. IN ITA NO.130/2000 ORDER DATED 26.09.2013 AND THE DECISION OF HYDERABA D BENCH OF THE TRIBUNAL IN THE CASE OF M/S. NCS DISTILLERIES P.LTD . VS ITO IN ITA NO.699/HYD/2012, ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 16.09.2014. ITA NO:509/DEL/2017 ASSESSMENT YEAR: 2012-13 PAGE | 4 6. LD.DR FOR THE REVENUE ON THE OTHER HAND POINTED OUT THAT FOR SERVICES RENDERED, SERVICE TAX WAS RECOVERABLE AND THE SET OFF AGAINST SERVICE TAX PAID COULD BE CLAIMED IN SUBSEQUENT YEA RS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE ARISING IN THE PRESENT APPEAL IS AGAI NST THE CLAIM OF DEDUCTION ON ACCOUNT OF THE SERVICE TAX PAID IN THE EARLIER YEARS, BUT DEBITED DURING THE YEAR. THE CASE OF THE ASSESSEE BEFORE US IS THAT THE ASSESSEE WAS ENGAGED IN THE MANUFACTURING OF AUTO P ARTS AND ON THE INPUTS I.E. RAW MATERIAL SERVICE TAX WAS PAID BY IT WHICH IN TURN COULD BE SET OFF AGAINST THE SERVICE TAX RECEIVABLES. THE A SSESSEE HAD NOT DEBITED THE SAID SERVICE TAX PAID IN THE RELEVANT YEAR, AS THE ASSESSEE THOUGHT OF ADJUSTMENT AGAINST THE SERVICE TAX RECEIVABLE. BUT , IN THE YEAR UNDER CONSIDERATION THE ASSESSEE DEBITED THE SAID AMOUNT OF SERVICE TAX PAID AS IT WAS OF THE VIEW THAT THE SAME COULD NOT BE SET O FF AGAINST SERVICE TAX RECEIVABLE AND HENCE, THE CLAIM OF DEDUCTION. THE SAID CLAIM OF THE ASSESSEE WAS NOT ALLOWED BY THE AUTHORITIES BELOW O N THE GROUND THAT IT WAS PRE-MATURE FOR THE ASSESSEE TO AVAIL THE BENEFI T OF CENVAT CREDIT. AS UNDER THE ACT, THE SAID BENEFIT ON INPUTS AND INPUT S SERVICES COULD BE AVAILED LATER ALSO. THE COUNTER CLAIM OF THE ASSE SSEE IS THAT SINCE IT REALIZED THAT THE SAID INPUT COULD NOT BE SET OFF H ENCE, THE CLAIM MADE IN THE BOOKS OF ACCOUNTS, MERITS TO BE ALLOWED IN THE HANDS OF THE ASSESSEE. WE ARE OF THE VIEW THAT THE ASSESSEE IS AT LIBERTY TO MAKE THE AFORESAID CLAIM IN THE YEAR OF ITS CHOICE AND THE CLAIM MADE IN THE YEAR UNDER CONSIDERATION, MERITS TO BE ALLOWED IN THE HANDS OF THE ASSESSEE. WE FIND ITA NO:509/DEL/2017 ASSESSMENT YEAR: 2012-13 PAGE | 5 THAT THE SAID ISSUE HAS BEEN DECIDED BY THE VARIOUS BENCHES OF TRIBUNAL INCLUDING THE DECISION OF HYDERABAD BENCH OF THE TR IBUNAL IN THE CASE OF M/S. NCS DISTILLERIES P.LTD. VS ITO (SUPRA). WE HO LD THAT THE WRITE OFF OF CENVAT CREDIT IS AN ALLOWABLE EXPENDITURE U/S 37(1) OF THE ACT, IN THE YEAR IT WAS DEBITED TO THE BOOKS OF ACCOUNTS. HENCE, TH E GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DAY OF OCTOBER, 2019. SD/- SD/- (B.R.R.KUMAR) (SUSHMA CH OWLA) %& %& %& %& /ACCOUNTANT MEMBER /JUDICIAL MEMBER / ! DATED : 16 TH OCTOBER, 2019 . * AMIT KUMAR * %-+/45%4/6 COPY OF THE ORDER IS FORWARDED TO : 1. )* / THE APPELLANT; 2. +,)* / THE RESPONDENT; 3. 7 8 9 / THE CIT(A) 4. 4:;+/ / DR, ITAT, DELHI 5. ;(< 6 GUARD FILE. % % % % / BY ORDER , ,4/+/ // TRUE COPY // >?@ , ASSISTANT REGISTRAR, ITAT, DELHI