DCIT, Hyderabad V. M/s NCS sugars Limited, Hyderabad

ITA 658/HYD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6194 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: D BALAJI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.658/HYD/2010 : ASSESSMENT YEAR 2006-07 DY. COMMISSIONER OF INCOME- TAX, CIRCLE 16(1), HYDERABAD. V/S. M/S. NCS SUGARS LTD., HYDERABAD. ( PAN AABCN 5273 G ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VASUNDHARA SINHA RESPONDENT BY : SHRI D.BALAJI O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 20 06-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME -TAX (APPEALS). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- '1. THE HON'BLE ITAT IS NOT CORRECT IN HOLDING THAT ADVANCE LICENCE COMMITMENT SHOULD BE RECOGNIZED ONLY WHEN THE OBLIG ATION OF EXPORT IS MET AND THAT THERE COULD BE NO HYPOTHETIC AL OR ILLUSORY INCOME, WHEREAS IN FACT THE LIABILITY CRE ATED BY THE ASSESSEE IS HYPOTHETICAL AND CONTINGENT UPON NON-FU LFILMENT OF THE OBLIGATION. 2. THE HON'BLE ITAT OUGHT TO HAVE HELD THAT THE PO STPONEMENT OF INCOME RECOGNITION IS DELIBERATELY RESORTED TO EVEN WHEN THERE IS NO REAL INCOME OR REAL LIABILITY ACCRUING TO THE ASSESSEE. ' 3. LEARNED CIT-DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IN THE GROUNDS OF APPEAL OF THE REVENUE IS COVERED IN FAVOUR OF ITA NO.658/HYD/10 M/S. NCS SUGARS LTD., HYDERABAD. 2 THE ASSESSEE WITH THE DECISION OF THE HYDERABAD BENCH OF TH E TRIBUNAL DATED 30.10.2009 IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2005 -06 IN ITA NO.362/HYD/2009 FOR THE ASSESSMENT YEAR 2005-06. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE IN THE GROUNDS OF APPEAL OF THE REVENUE REGARDI NG ADVANCE LICENCE COMMITMENTS WHETHER TO BE RECOGNIZED ONLY WHEN THE OB LIGATION OF EXPORT IS MET, IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DE CISION OF THE HYDERABAD BENCH OF THE TRIBUNAL DATED 30.10.2009, CITE D SUPRA, IN ASSESSEE'S OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YE AR 2005- 06, WHEREIN IT WAS HELD THAT IT IS APPROPRIATE TO REC OGNISE THE REVENUE IN SUCH CASES ONLY WHEN IT BECOMES REASONABLY CERTAIN AND AS P ER RECOGNIZED ACCOUNTING PRINCIPLES, REVENUE SHOULD BE RECOGNISED ONLY WHEN THE ADVANCE LICENCE COMMITMENT IS MET, SINCE WHAT CAN BE BROUGHT TO TA X IS ONLY THE REAL INCOME ACCRUED TO THE ASSESSEE AND THERE COULD BE NO LEVY OF TAX ON ANY HYPOTHETICAL OR ILLUSORY INCOME. WE BEING IN AGREEME NT WITH THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, VIZ. 2005-06, AN D THE FACTS OF THE CASE OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR, VIZ. 2006-07, BEING IDENTICAL WITH THE FACTS OF THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSE SSEE AND THE GROUNDS OF APPEAL OF THE REVENUE ARE REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 12.11.2010 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 12TH NOVEMBER, 2010 ITA NO.658/HYD/10 M/S. NCS SUGARS LTD., HYDERABAD. 3 COPY FORWARDED TO:] 1. M/S. NCS SUGARS LTD., 405MINAR APARTMENTS, DECCAN TOW ERS, BASHEERBAGH, HYDERABAD. 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 16(1), HYDERA BAD. 3. COMMISSIONER OF INCOME-TAX (APPEALS)-V, HYDERABAD. 4. COMMISSIONER OF INCOME-TAX -IV, HYDERABAD. . 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S .