ACIT, CHENNAI V. M/s. Metropolitan Transport Corporation, CHENNAI

ITA 661/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64285 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-09-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K SANTHANAKRISHNANCA
• Assessee Lawyers: S DASGUPTA; K K DHAVAN
• Section: 43B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NOS. 661 TO 666/MDS/2012 ASSESSMENT YEARS : 2000-01, 2001-02, 2002-03, 2004-05, 2006-07 & 20 07-08 THE ASST. COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV(2), CHENNAI. V. M/S. METROPOLITAN TRANSPORT CORPORATION (CHENNAI) LTD., PALLAVAN HOUSE, ANNA SALAI, CHENNAI-600 002. PAN : AAACP1935C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SANTHANAKRISHNAN,CA RESPONDENT BY : SHRI S. DAS GUPTA, JCIT AND SHRI K.K. DHAVAN, CIT DATE OF HEARING : 17.09. 2012 DATE OF PRONOUNCEMENT : 17.09.2012 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS OF T HE CIT(APPEALS)-VI, CHENNAI DATED 20-12-2011 FOR THE ASSESSMENT YEARS 2000-01, 2001-02, 2002-03, 2004-05, 2006-07 A ND 2007- 08. AS COMMON ISSUE IS INVOLVED IN ALL THESE APPEA LS, THEY WERE ITA 661-666/M DS/2012 2 HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PU BLIC SECTOR PASSENGER TRANSPORT CORPORATION. IT HAD FILED RETU RNS OF INCOME FOR THE YEARS UNDER CONSIDERATION. THE SAME WERE P ROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (( 'THE ACT' FOR SHORT) AND SUBSEQUENTLY THE ASSESSMENTS WERE RE-OPE NED UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER COMP LETED THE ASSESSMENT BY DISALLOWING PROVISION OF ` 21,50,000/- TOWARDS NO FAULT LIABILITY FOR THE ASSESSMENT YEAR 2000-01. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBS ERVED THAT THE ASSESSEE HAS MADE ACTUAL PAYMENT OF ` 52,25,000/- DURING THE PREVIOUS YEAR UNDER THE HEAD NO FAULT LIABILIT Y. THE PROVISION FOR NO FAULT LIABILITY DURING THE YEAR HA S ALSO BEEN INCREASED BY AN AMOUNT OF ` 21,50,000/- (I.E. ` 3,91,40,000 3,69,90,000). THEREFORE, THE EXCESS AMOUNT OF ` 21,50,000/- WAS DISALLOWED AS THE SAME WAS ONLY ON EXCESS PROVI SION. ON SIMILAR GROUND, DISALLOWANCES WERE ALSO MADE FOR TH E OTHER RELEVANT ASSESSMENT YEARS UNDER APPEAL. ITA 661-666/M DS/2012 3 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). THE LEARNED CIT(APPEALS) OBSERVED AS UNDER FOR THE ASSE SSMENT YEAR 2000-01 : OUT OF THE TOTAL PROVISION OF ` 73,75,000/-, I FIND THAT THE AO HAS ALLOWED THE ACTUAL PAYMENT OF ` 52,25,000/-. THE APPELLANT COMPANY HAS SUBMITTED THAT AS PER MOTOR V EHICLE ACT, A MANDATORY PROVISION IS REQUIRED TO BE MADE W HENEVER ANY ACCIDENT OCCURS WITH MINIMUM SUM OF ` 50,000/- IN THE CASE OF FATAL ACCIDENT AND ` 25,000/- FOR OTHER ACCIDENTS INVOLVING INJURY WHICH IS REQUIRED TO BE MADE ON FI NALIZATION OF THE CASE. AS THE PROVISION IS MADE BASED ON THE ST ATUTORY LIABILITY INCURRED IN THE COURSE OF BUSINESS I HOLD THAT THE LIABILITY IS ASCERTAINED LIABILITY AND THOUGH IT IS A STATUTORY LIABILITY, THE PAYMENT IS TO BE MADE AS FINALIZATIO N. AS IT DOES NOT FALL U/S 43B THE SAME IS ALLOWABLE AND THEREFOR E, I DIRECT THE AO TO ALLOW THE SAME. 4. SIMILAR ORDERS WERE ALSO PASSED BY THE LEARNED CIT(APPEALS) FOR THE OTHER YEARS UNDER APPEAL. 5. ON BEING AGGRIEVED, THE REVENUE CARRIED THE MATT ER BEFORE THE TRIBUNAL FOR ALL THE ASSESSMENT YEARS UNDER CON SIDERATION. THE LEARNED DR SUPPORTED THE ORDERS PASSED BY THE A SSESSING OFFICER. ITA 661-666/M DS/2012 4 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE REFERRED TO SECTION 140(2) OF THE MOTOR VEHICLES AC T AND SUBMITTED THAT THE LIABILITY IS STATUTORY AND ASCER TAINED LIABILITY AND THEREFORE THE SAME HAS TO BE ALLOWED. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. SECTION 140 OF THE MOTOR VEHICLES ACT READS AS FOLLOWS : 140. LIABILITY TO PAY COMPENSATION IN CERTAIN CASE S ON THE PRINCIPLE OF NO FAULT .- (1) WHERE DEATH O R PERMANENT DISABLEMENT OF ANY PERSON HAS RESULTED FROM AN ACCIDENT ARISING OUT OF THE USE OF A MOTOR VEHICLE OR MOTOR VEHICLES, THE OWNER OF THE VEHICLE S SHALL, OR AS THE CASE MAY BE, THE OWNERS OF THE VEHICLES SHALL, JOINTLY AND SEVERALLY, BE LIABLE TO PAY COMPENSATION IN RESPECT OF SUCH DEATH OR DISABLEMEN T IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION. (2) THE AMOUNT OF COMPENSATION WHICH SHALL BE PAYABLE UNDER SUB-SECTION (1) IN RESPECT OF THE DEATH OF ANY PERSON SHALL BE A FIXED SUM OF FIFTY THOUSAND RUPEES AND THE AMOUNT OF COMPENSATION PAYABLE UNDER THAT SUB-SECTION IN RESPECT OF THE PERMANENT DISABLEMENT OF ANY PERSON SHALL BE A FIXE D SUM OF TWENTY FIVE THOUSAND RUPEES. ITA 661-666/M DS/2012 5 7. WE FIND THAT AS PER THE ABOVE PROVISIONS OF THE MOTOR VEHICLES ACT, THE ASSESSEE HAS AN ASCERTAINED LIABI LITY AND ACCORDINGLY PROVISION WAS MADE. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(APPEALS). A CCORDINGLY, WE CONFIRM HIS ORDER FOR ALL THE ASSESSMENT YEARS UNDE R APPEAL. THE GROUND RAISED BY THE REVENUE IN ALL THE APPEALS IS THEREFORE DISMISSED. 8. IN THE RESULT, THE REVENUES APPEALS ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 17 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 17 TH SEPTEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE