R.S. Overseas Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 5525/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1291 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDRA DUBEY SENIOR
• Assessee Lawyers: P K JAIN
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) SHRI I.C. SUDHIR, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5525/DEL./2012 (ASSESSMENT YEAR : 2009-10) M/S. R.S. OVERSEAS PVT. LTD., VS. DCIT, CIRCLE 2 5 (1), C/O JAIN RAJ ASSOCIATES, NEW DELHI. 208, HANS BHAWAN, 1, BSZ MARG, NEW DELHI 110 002. (PAN : AAACR4679R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.K. JAIN, CA REVENUE BY : SHRI UMESH CHANDRA DUBEY, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS)-XVIII, NEW DELHI DATED 12.09.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPOR T AND TRADING OF THE PETRO PRODUCTS. DURING THE YEAR, THE ASSESSEE HAS CLAIMED ADDITIONAL CUSTOMS DUTY AS UNCLAIMED OF RS.4,07,832/-. THIS AMOUNT OF ADDITIONAL DUTY (IMPORT) WAS AGGREGATE OF TWO ADDITIONAL DUTY (IMPORT) RELAT ED TO BILL OF ENTRY NOS.741626 DATED 11.03.2008 AND 730136 DATED 03.03. 2008. THIS ADDITIONAL ITA NO.5525/DEL./2012 2 CUSTOMS DUTY PAID BY THE ASSESSEE WAS REFUNDABLE WI THIN A PERIOD OF ONE YEAR AFTER FULFILLING CERTAIN CONDITIONS. SINCE ASSESSE E COULD NOT CLAIM IT WITHIN ONE YEAR IT WAS WRITTEN OFF BY DEBITING THE SAME IN THE PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDING ON 31.03.2009 RELEVANT TO ASSESSM ENT YEAR UNDER CONSIDERATION. THE CIT (A) HAS CONFIRMED THE ADDIT ION BY HOLDING AS UNDER :- THUS, THOUGH THE CLAIM OF THE APPELLANT IS ADMISSI BLE, HOWEVER, IT IS NOT ADMISSIBLE IN THE RELEVANT YEAR AS THE AD DITIONAL CUSTOMS DUTY PAID BY THE APPELLANT COMPANY IS AN EXPENSE OF THE PRECEDING PREVIOUS YEAR IN WHICH THE TRANSACTION FO R WHICH THE DUTY WAS PAID WAS UNDERTAKEN. THE APPELLANT COMPANY IS MAINTAINING ITS BOOK~ ON MERCANTILE BASIS. THE EXPE NSE IS, THEREFORE, NOT AN ADMISSIBLE EXPENSE IN THE YEAR UN DER CONSIDERATION. THE ADDITION MADE BY THE ASSESSING O FFICER IS, THEREFORE, UPHELD. 3. AGGRIEVED WITH THIS, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN ITS APPEAL :- 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF ADDITIONAL CUSTOM DUTY AMOUNTING TO RS.4,07,832/- . 2. THE ASSESSEES' CLAIM/RELIEF IS BASED ON REGULARL Y ADOPTED METHOD OF ACCOUNTING, I.E., MERCANTILE BASIS WHICH IS SUPPORTED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE COUNTRY AND SPECIFICALLY BY AS-9, REVENUE RECOGNITION ISSUED BY ICAI. 3. THE CLAIM OF EXPENDITURE IS SOLELY & EXCLUSIVELY FOR THE PURPOSE OF BUSINESS & SAME IS ALLOWABLE AS PER SECT ION 37 OF INCOME TAX ACT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, M ODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY OTHER GROUNDS OF APPEAL. ITA NO.5525/DEL./2012 3 4. WHILE PLEADING ON BEHALF OF THE ASSESSEE THE LD. AR SUBMITTED THAT THE ASSESSEE HAS PAID THE ADDITIONAL CUSTOMS DUTY ON TH E TWO INVOICES DATED 11.03.2008 AND 03.03.2008. THE ASSESSEE INADVERTEN TLY COULD NOT MAKE CLAIM WITHIN A PERIOD OF ONE YEAR, HENCE THE SAME WAS CLA IMED BY WRITING OFF BY DEBITING PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDIN G 31.03.2009. THE LD. AR SUBMITTED THAT THE ASSESSEE IS NOT DEBITING THIS AD DITIONAL CUSTOMS DUTY PAID IN THE PROFIT & LOSS ACCOUNT BUT IT IS TAKEN AS AN ADV ANCE IN BOOKS OF ACCOUNTS AS THE ASSESSEE WAS ENTITLED FOR THE REFUND OF THE SAM E. THE LD. AR ALSO RELIED ON THE ACCOUNTING STANDARDS (AS-9) BY STATING THAT ASS ESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND ASSESSEE IS CON SISTENTLY TAKING THIS ADDITIONAL CUSTOMS DUTY PAID IN BOOKS AS ADVANCE AS THE SAME WAS REFUNDABLE. HE SUBMITTED THAT THE ENTRIES WERE REVERSED WHENEVE R THE REFUND IS RECEIVED. THE LD. AR ALSO SUBMITTED THAT THE ASSESSEE IS FOLL OWING THIS METHOD AND NOT DEBITING THE AMOUNT IN THE PROFIT & LOSS ACCOUNT. DUE TO INADVERTENCE, ASSESSEE COULD NOT CLAIM THE AMOUNT WITHIN A PERIOD OF ONE YEAR, THEREFORE, THIS AMOUNT WAS CLAIMED BY WRITING OFF THROUGH PROF IT & LOSS ACCOUNT. LD. AR ALSO SUBMITTED THAT ASSESSING OFFICER HAD NOT RE JECTED THE BOOKS OF ACCOUNT, HENCE CANNOT MADE ADDITION OF THIS AMOUNT. 5. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW AND ALSO SUBMITTED THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE GOODS ON WHICH THE ADDITIONAL CUSTOMS DUTY PAID WAS IMPORTED DURING THE FINANCIAL ITA NO.5525/DEL./2012 4 YEAR ENDING ON 31.03.2008. THEREFORE, WHATEVER TRE ATMENT THE ASSESSEE GIVES IN ITS BOOKS OF ACCOUNT SHALL NOT MAKE ANY DIFFEREN CE AS THIS EXPENDITURE CAN BE CLAIMED ONLY IN THE FINANCIAL YEAR 2007-08 RELEV ANT TO ASSESSMENT YEAR 2008-09 WHICH THE ASSESSEE HAS FAILED TO DO SO. HE VEHEMENTLY PLEADED THAT THE CIT (A)S ORDER IS AS PER LAW AND MUST BE SUSTA INED. 6. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THER E IS NO DISPUTE THAT THE GOODS ON WHICH THE ADDITIONAL CUSTOMS DUTY PAID @ 4 % WAS IMPORTED DURING THE FINANCIAL YEAR 2007-08. THE ASSESSEE IS FOLLOW ING MERCANTILE SYSTEM OF ACCOUNTING. THIS ADDITIONAL CUSTOMS DUTY PAID @ 4% WAS REFUNDABLE AFTER FULFILLING THE FOLLOWING FIVE CONDITIONS :- A) THE IMPORTER OF THE SAID GOODS SHALL PAY ALL DU TIES, INCLUDING THE SAID ADDITIONAL DUTY CUSTOMS LEVIABLE THEREON, AS APPLICABLE, AT THE TIME OF IMPORTATION OF GOODS. B) THE IMPORTER, WHILE ISSUING THE INVOICES FOR SAL E OF THE SAID GOODS, SHALL SPECIFICALLY INDICATE IN THE INVO ICE THAT IN RESPECT OF THE GOODS COVERED THEREIN, NO CREDIT OF THE ADDITIONAL DUTY OF CUSTOMS LEVIED UNDER SUB-SECTION 5 OF SECTION 3 OF THE CUSTOMS TARIFF ACT, 1975 SHALL BE ADMISSIBLE. C) THE IMPORTER SHALL FILE A CLAIM FOR REFUND OF T HE SAID ADDITIONAL DUTY OF CUSTOMS PAID ON THE IMPORTED GOO DS WITH THE JURISDICTIONAL CUSTOMS OFFICER. ** D) THE IMPORTER SHALL PAY ON SALE OF SAID GOODS, A PPROPRIATE SALES TAX OR VALUE ADDED TAXES, AS THE CASE MAY BE. ITA NO.5525/DEL./2012 5 E) THE IMPORTER SHALL, INTER ALIA, PROVIDE COPIES OF THE FOLLOWING DOCUMENTS ALONG WITH THE REFUND CLAIM: I. DOCUMENT EVIDENCING PAYMENT OF SAID ADDITIONAL D UTY. II. INVOICES OF SALE OF THE IMPORTED GOODS IN RESPE CT OF WHICH REFUND OF THE SAID ADDITIONAL DUTY IS CLAIMED. III. DOCUMENTS EVIDENCING PAYMENT OF APPROPRIATE SA LES TAX OR VALUE ADDED TAXES, AS THE CASE MAY BE, BY THE IMPOR TER, ON SALE OF SUCH IMPORTED GOODS. ** (C) THE IMPORTER SHALL FILE A CLAIM FOR REFUND OF THE SAID ADDITIONAL DUTY OF CUSTOMS PAID ON THE IMPORTED GOO DS WITH THE JURISDICTIONAL CUSTOMS OFFICER BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF PAYMENT OF THE SAID ADDITIONAL DUTY OF CUSTOMS;'. AS AMENDED BY NOTIFICATION NO.93/2008 DATED 01-08-2008 . AS THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF A CCOUNT THIS AMOUNT WAS EXPENSE FOR THE FINANCIAL YEAR 2007-08. FOR REFUN D, ASSESSEE HAS TO FULFILL ABOVE CONDITIONS. THESE CONDITIONS CAN BE FULFILLE D ONLY AFTER THE COMPLETION OF THE IMPORT AND PAYMENT OF THE CUSTOMS DUTY. SAL E BILL CAN BE RAISED AFTER IMPORTS AND TERMS LAID OUT IN CONDITION NO.2 CAN BE FULFILLED AT THE TIME OF SALE. THE LD. ARS CLAIM THAT THE REFUND ALSO ACCR UES TO THE ASSESSEE SIMULTANEOUSLY AS SOON AS THE ADDITIONAL CUSTOMS DU TY IS PAID IS NOT JUSTIFIED. THE ASSESSEE HAS TO FULFILL FIVE CONDITIONS AND CER TAIN EVENTS WHICH ARE NECESSARY FOR FULFILLING THE CONDITIONS CAN OCCUR A FTER THE COMPLETION OF IMPORT AND PAYMENT OF THE CUSTOMS DUTY. THEREFORE, IN OUR CONSIDERED VIEW, ITA NO.5525/DEL./2012 6 PAYMENT OF ADDITIONAL DUTY (IMPORT) SHALL NOT MAKE ASSESSEE ENTITLED FOR THE REFUND. FOR REFUND, ASSESSEE HAD TO FULFILL CERTAI N OTHER CONDITIONS. SINCE THIS CUSTOMS DUTY WAS PAID DURING THE PREVIOUS YEAR RELE VANT TO ASSESSMENT YEAR 2008-09, THEREFORE, THIS CANNOT BE CLAIMED IN THE A SSESSMENT YEAR 2009-10. IN OUR CONSIDERED VIEW, THE CIT (A) WAS JUSTIFIED I N CONFIRMING THE ADDITION. WE SUSTAIN THE SAME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF JANUARY, 2013. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 4 TH DAY OF JANUARY, 2013 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.