Asstt.CIT, Cir.8, Pune, Pune V. Anusuya Auto Press Pvt. Ltd., Pune

ITA 539/PUN/2012

• Counselvise Citation: 53924514 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA MS ANN KAPTHUAMA
• Keywords: Capital receipt
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.539/PN/2012 (ASSTT. YEAR : 2008-09) ACIT, CIRCLE-8, PUNE. .. APPELLANT VS. ANUSUYA AUTO PRESS PARTS PVT. LTD., GAT NO.388, VILLAGE MAHALUNGE, TALEGAON CHAKAN ROAD, PUNE 410501. PAN: AACCA3246K .. RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE DEPARTMENT BY : SHRI MUKESH VERMA/ MS.ANN KAPTHUAMA DATE OF HEARING : 17.04.2013 DATE OF PRONOUNCEMENT : 25.04.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUND: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THA T DISCOUNT OF RS.54,04,884/- RECEIVED ON PRE-PAYMENT OF LIABIL ITY UNDER THE SALES TAX DEFERRAL SCHEME, AS NOT REMISSION O R CESSATION OF LIABILITY U/S.41(1)? 2. THE ISSUE BEFORE US IS WITH REGARD TO HOLDING TH E DISCOUNT OF RS.54,04,884/- RECEIVED ON PRE-PAYMENT OF LIABILITY UNDER THE SALES TAX DEFERRAL SCHEME AS NOT REMISSION OR CESSATION O F LIABILITY U/S.41(1). THE CIT(A) HAS DECIDED THIS ISSUE BY OB SERVING AS UNDER: 7. I HAVE CONSIDERED THE EXPLANATION AND THE MATER IAL AVAILABLE ON RECORD. IT IS CONTENDED BY THE APPELL ANT THAT IT WAS ONLY A PAYMENT AT DISCOUNT AT NPV OF THE FUTURE LIABILITY FOR PAYING THE OUTSTANDING SALES TAX AMOUNT. THUS, IT WAS ONLY A PREMATURE PAYMENT OF SALES TAX OUTSTANDING A MOUNT 2 WHICH WAS TREATED AS LOAN BY THE STATE GOVERNMENT. THE DEFERRED SALES TAX LIABILITY GOT PAID AT THE NPV, A ND THE DIFFERENCE BETWEEN THE DEFERRED SALES TAX LIABILITY AND THE NPV IS RETAINED BY THE ELIGIBLE UNIT. IT WAS FURTHER S TATED THAT ON ACCOUNT OF THE PAYMENT MADE AT NPV, THE ENTIRE DEFE RRED SALES TAX LIABILITY GETS PAID AND DISCHARGED. THUS, THE APPELLANT HAD TREATED THIS DIFFERENCE BETWEEN THE NPV AND THE DEF ERRED SALES TAX LIABILITY PAYABLE IN FUTURE AS CAPITAL RECEIPT. IT WAS STATED THAT THE NPV REPRESENTS THE PRESENT VALUE OF THE FU TURE LIABILITY, AND THEREFORE, THE SAME WAS CLAIMED AS C APITAL RECEIPT. THE APPELLANT CITED CERTAIN DECISIONS IN SUPPORT OF ITS CONTENTIONS WHICH INCLUDED THE SPECIAL BENCH DECISI ON IN THE CASE OF SULZAR INDIA (2010) 134 TTJ 385 (MUM)(SB). IT IS NOTICED THAT IN THIS DECISION OF THE SPECIAL BENCH, IT WAS HELD THAT SUCH PREMATURE PAYMENT OF THE DEFERRED SALES T AX LIABILITY AT ITS DISCOUNTED VALUE OR AT NPV CANNOT BE TREATED AS REMISSION OR CESSATION OF LIABILITY U/S.41(1). THI S WAS BECAUSE IT CANNOT BE SAID THAT THE ASSESSEE HAD OBTAINED TH E BENEFIT OF DEDUCTION OF SALES TAX LIABILITY SIMPLY BECAUSE THE DEDUCTION WAS ALLOWED FOR THE PURPOSES OF SECTION 43B INITIAL LY, BY APPLYING THE CBDT CIRCULAR NO.496 DATED 25/09/1987, AND THIS CIRCULAR ONLY STATED THAT THE STATUTORY LIABIL ITY WAS TO BE TREATED TO HAVE BEEN DISCHARGED FOR THE PURPOSES OF SECTION 43B. I HAVE CAREFULLY PERUSED THE RATIO OF THIS DE CISION AND I AM OF THE OPINION THAT THIS SQUARELY COVERS THE A PPELLANTS CASE. THE JUDGMENTS CITED BY THE AO RELATED TO WAI TER OF LOAN AND RETENTION OF UNCLAIMED DEPOSIT BECAUSE OF LIMIT ATIONS ETC., WERE NOT APPLICABLE TO THE FACTS OF APPELLANTS CAS E. THEREFORE, THE APPELLANTS EXPLANATION IS TENABLE IN LAW AND T HIS GROUND OF APPEAL IS ALLOWED. WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING O F THE CIT(A) WHO HAS HELD THAT DISCOUNT OF RS.54,04,884/- RECEIVED O N PRE-PAYMENT OF LIABILITY UNDER THE SALES TAX DEFERRAL SCHEME, AS NOT REMISSION OR CESSATION OF LIABILITY U/S.41(1). THIS REASONED FINDING NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 3. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF APRIL, 2013. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 25 TH APRIL, 2013 3 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE-8, PUNE. 3. THE CIT(A)-V, PUNE. 4. THE CIT-V, PUNE. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.