M/s. Railtel Corporation of India Ltd., New Delhi V. ACIT, New Delhi

ITA 737/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8095 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 01-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B MEENA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 737/DEL/2012 AY: 20 08-09 M/S RAILTEL CORPORATION OF INDIA VS A.C.I.T., LIMITED, 10 TH FLOOR, CIRCLE 15(1), BOB BUILDING, NEW DELHI. 16, PARLIAMENT STREET, NEW DELHI. (APPELLANT) (R ESPONDENT) APPELLANT BY : DR. RAKESH GUPTA, ADV. RESPONDENT BY : SHRI R.B. MEENA, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST ORDER DATED 2.11.2011 PASSED BY THE LD. CIT (A)-XVIII, NEW DELHI AND PERTAINS TO ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS RAISED AS MANY AS FIVE GROUNDS OF APPE AL. THE ONLY ISSUE IN DISPUTE IS THE ADDITION OF RS.16,19,80,000 /- TO THE INCOME OF THE ASSESSEE COMPANY BY TREATING THE AMOU NT AS RENT RECEIVABLE FROM THE RAILWAYS FOR USE OF STM 4 BANDW IDTH ON ACCRUAL BASIS. 2. IT IS SEEN FROM THE RECORDS THAT THE ASSESSING O FFICER HAD MADE THE IMPUGNED ADDITION ON THE BASIS THAT INCOME HAD I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 2 ACCRUED TO THE ASSESSEE COMPANY FROM RAILWAYS FOR U SE OF STM 4 BANDWIDTH WHICH HAD NOT BEEN INCLUDED BY THE ASSESS EE IN ITS TOTAL INCOME. WHILE MAKING THE ADDITION, THE ASSES SING OFFICER RELIED ON THE COMMENTS OF THE AUDITOR IN THE AUDIT REPORT THAT NO INCOME HAD BEEN BOOKED FOR RS.1619.80 LACS FOR THE YEAR AND FOR RS.3630.07 LACS FOR EARLIER YEARS ON ACCOUNT OF LEA SE RENT PAYABLE/CLAIMED BY THE RAILWAYS FOR THE USE OF STM 4 BANDWIDTH. THE ASSESSING OFFICER REFUSED TO ACCEPT THE ASSESSEES CONTENTION THAT THE APPROVAL OF THE RAIL WAYS FOR THE PAYMENT WAS RECEIVED ONLY ON 19.12.2008 AND THEREFO RE THE REVENUE WAS TO BE RECOGNIZED ONLY IN FINANCIAL YEAR 2008-09. THE ASSESSING OFFICER WAS ALSO OF THE OPINION THAT SINC E THE ASSESSEE COMPANY MAINTAINED ITS BOOKS OF ACCOUNT ON MERCANTI LE BASIS, THE AMOUNT WAS INCLUDIBLE ON ACCRUAL BASIS. THE AS SESSING OFFICER ALSO REFERRED TO THE FACT THAT THE AGREEMEN T BETWEEN THE ASSESSEE COMPANY AND THE RAILWAYS WAS DATED 21.09.2 006 AND, THEREFORE, THE EFFECTIVE DATE FOR ACCOUNTING ON ACC RUAL BASIS COMMENCED ON 21.09.2006 AND THE CONTENTION OF THE A SSESSEE THAT THE FINANCIAL ADVISOR OF THE RAILWAYS HAD NOT VETTED THE PAYMENT DURING THE YEAR UNDER CONSIDERATION WAS ONL Y A PRETEXT TO SHIFT THE YEAR OF CHARGEABILITY. I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 3 3. ON APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ADDITION WAS CONFIRMED. THE ISSUE HAS BEEN DISCUSSED BY THE LD. CIT (A) IN PARAS 4.3 AND 4.4 OF THE IMPUGNED ORDER WHICH AR E BEING REPRODUCED HEREUNDER FOR READY REFERENCE:- 4.3 THE AUDITORS NOTE 3(VII) OF THE AUDIT REPORT OF THE APPELLANT COMPANY CLEARLY STATES THAT NO INCOME HAS BEEN BOOKED FOR RS. 1619.80 LAC FOR THE YEAR AND FO R RS. 3630.07 LACS FOR EARLIER YEARS ON ACCOUNT OF LEASED RENT PAYABLE BY/CLAIMED BY RAILWAY FOR USE OF STM 4 BANDWIDTH. THE APPELLANT COMPANY WAS ASKED TO EXPLA IN THE BASIS ON WHICH THE AUDITOR HAS ARRIVED AT THE F IGURES MENTIONED BY HIM IN THE AUDIT REPORT WHEN AS PER TH E APPELLANT COMPANY NO INCOME WAS ACCOUNTABLE FOR THE RELEVANT PERIOD. THE APPELLANT COMPANY VIDE ITS LET TER DATED 17.10.2011 SUBMITTED AS UNDER (RELEVANT PORTI ON REPRODUCED): CALCULATION OF ALLEGED INCOME REPORTED BY AUDITORS NOTE 3(VII) OF HIS AUDIT REPORT APPEARING THAT PAGE NO. 7 OF PAPER BOOK DATED 1 7. 02.2011 IS BEING FILED AT PAGE. 1.... IN RESPONSE TO THE LETTER OF MINISTRY OF RAILWAY DA TED 30.01.2008 APPEARING AT PAGE 39 OF MY PAPER BOOK DA TED 17.02.2011, A LETTER DATED 23.05.2008 WAS WRITTEN B Y DIRECTOR/N.P.M. OF THE APPELLANT COMPANY, WHICH CON TAIN A LIST OF APPROX DATE OF HANDED OVER OF STM 4 BANDW IDTH TO RAILWAY (THE SAME IS FURTHER ENCLOSED HEREWITH F OR YOUR KIND PERUSAL AT PAGE 2 TO 5), THE AUDITORS CALCULAT ED THE INCOME OF EARLIER YEARS BY HIS OWN ASSUMPTIONS THAT THE ROUTES WHICH HAVE BEEN HANDED OVER ON 01.04.2004 TH US LEASE CHARGES IS ALSO RECOVERABLE FROM RAILWAY FROM THAT DATE. HE LOST HIS SIGHT THAT THE LEASE CHANGES FORM I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 4 RAILWAY IS ENFORCEABLE AS W.E.F. 21.09.2006 PER AGREEMENT DATED 21.09.2006 PARA NO. 3.1.11 AND NOT EARLIER. THE COMPANY HAS NEITHER RAISED THE BILL PRIOR TO DA TED 21.09.2006 NOR IT WAS ENFORCEABLE FOR ANY PAYMENT. WITH REFERENCE TO PARA NO. 6(B) OF LETTER DATED 23. 05.2008 OF COMPANY, 'LIST OF SECTIONS WHERE S.T.M 4 BANDWID TH HAS SHOWN HANDED OVER TO THE RAILWAY WAS ONLY THE INFORMATION TO THE RAILWAY. AS PER PAGE 1 OF THIS LETTER THE COMPUTATION OF 363 0 LACS HAS BEEN DONE AS UNDER: THE TOTAL KILOMETERS HANDED OVER ARE 5409 AND THE D ATE OF HANDING OVER IS 01.04.2004. FURTHER, AS PER PAGE S 4 TO 5B OF THIS LETTER 22438 RKM HAVE BEEN HANDED OVER I N F.Y. 2005-06 AND ANOTHER 22438 RKM IN F.Y. 2006-07. THE VALUATION OF RKM HAS BEEN DONE @7219 PER RKM. O N THIS BASIS THE COMPUTATION OF INCOME NOT REPORTED B Y THE APPELLANT COMPANY HAS BEEN DONE BY THE AUDITOR AND IS AS UNDER:- VALUE @7219 PER RKM APPROX RKM HANDED OVER DURING 2004-055409 39047571 APPROX RKM HANDED OVER DURING 2005-0622438 16197992 2 APPROX RKM HANDED OVER DURING 2006-0722438 161979922 363007415 INCOME FOR A.Y. 2008-09 REPORTED BY AUDITOR 1619 LACS 4.4 THUS THE RKM HANDED OVER DURING THE RELEVANT ASSESSMENT YEAR IS 22438 AND THE SAME HAS BEEN VALU ED AT RS. 1619.80 LACS. THE APPELLANT COMPANY IN ITS I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 5 SUBMISSION HAS MAINLY RELIED UPON LETTER DATED 30.06.2008 AS PER WHICH THE LEASE CHARGES ARE PAYAB LE FROM THE DATE ON WHICH THE ACTUAL ROUTE HANDING OVE R OF THE STM 4 CAPACITY TAKES PLACE. THE AUDITOR OF THE APPELLANT COMPANY FOR COMPUTATION OF INCOME AND FOR PURPOSE OF COMMENTS IN NOTES OF ACCOUNTS ON INCOME NOT SHOWN HAS RELIED UPON LETTER DATED 23.05.2008. THIS LETTER DATED 23.05.2008 HAS BEEN WRITTEN BY THE DIRECTOR/NPM OF THE APPELLANT COMPANY SPECIFYING TH E DATE ON WHICH ACTUAL HANDING OVER HAS TAKEN PLACE. AS PER THE ANNEXURES TO THIS LETTER, WRITTEN TO THE SE CRETARY, MINISTRY OF RAILWAYS, ON THE SUBJECT OF PAYMENT OF STM 4 LEASE CHARGES BY THE RAILWAYS, FOR THE PURPOSE OF VERIFICATION OF STM 4 BANDWIDTH WHICH HAS ALREADY B EEN PROVIDED TO THE RAILWAYS, THE APPROXIMATE DATE OF HANDING OVER RANGES FROM 01.04.2004 TO 01.04.2005. THE LETTER IS CLEARLY COMMUNICATION BETWEEN COMPETENT AUTHORITIES IN BOTH THE ORGANIZATIONS; THE CONTENTS OF THE LETTER ARE THEREFORE RELIABLE. THE CONTENTS OF THE LETTER CANNOT BE DISPUTED. THE RATE ADOPTED FOR CALCULATIO N IS THE SAME AS ADOPTED BY THE APPELLANT COMPANY AND IS NOT UNDER DISPUTE. THE ONLY CAUSE FOR DISPUTE IS TH E DATE ON WHICH THE RKM HAVE BEEN HANDED OVER BY THE APPELLANT COMPANY TO THE RAILWAYS. THE DATE OF HAND ING OVER HAS BEEN CLEARLY DEPICTED IN THIS COMMUNICATIO N AND AS ALREADY DISCUSSED THERE IS NO REASON TO DOUBT TH E DATES MENTIONED BY A COMPETENT OFFICER OF THE APPEL LANT COMPANY ITSELF ESPECIALLY WHEN DATES OF INDIVIDUAL HANDING OVER OF EACH ROUTE HAS BEEN MENTIONED. IT I S NOT A CASE OF TYPING ERROR OR CLERICAL MISTAKE. THE AUDIT OR HAS THUS RIGHTLY PLACED RELIANCE ON THE LETTER AND ITS ANNEXURE AND HAS COMPUTED THE LEASE RENT BASING HIS CALCULAT ION BY TAKING THE DATE OF HANDING OVER AS MENTIONED IN THE LETTER. AS ALREADY MENTIONED THERE IS NO DIFFERENCE IN THE RATE AT WHICH THE LEASE RENT IS TO BE CHARGED. FURT HER, AS THE APPELLANT COMPANY IS MAINTAINING ITS BOOKS OF A CCOUNT ON MERCANTILE BASIS THIS INCOME SHOULD HAVE BEEN ACCOUNTED FOR BY THE APPELLANT IN THE YEAR UNDER CONSIDERATION. THUS THE ADDITION OF RS. 1619.80 LAC S MADE BY THE AO IS CONFIRMED. I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 6 4. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE US. THE LD. AR SUBMITTED THAT THE ASSESSEE COMPANY HAD ENTERED INTO AN AGREEMENT WITH THE RAILWAYS AND THE FORMER HAD TO R ECEIVE LEASE CHARGES ON THE BASIS OF THIS AGREEMENT. IT WAS SUB MITTED THAT AS PER LETTER DATED 30.6.2008, LEASE CHARGES PER PAYAB LE TO THE ASSESSEE @RS. 7219 PER KM PER ANNUM. IT WAS FURTHE R SUBMITTED THAT THE LEASE CHARGES WERE PAYABLE BY THE ZONAL RA ILWAYS BASED ON THE ACTUAL ROUTE KM OF STM 4 CAPACITY HANDED OVE R TO THEM BY THE ASSESSEE AND THE DATE FROM WHICH THE HANDING OV ER HAD TAKEN PLACE. IT WAS SUBMITTED THAT THE ASSESSEE WA S REQUIRED TO OBTAIN THE SATISFACTION REPORT OF THE ROUTE IN USE AND SINCE THERE WAS AN UNCERTAINTY IN REALIZATION OF THE CONSIDERAT ION, THE INCOME WAS NOT BOOKED AS PER ACCOUNTING STANDARD-9(AS-9) I SSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. T HE LD. AR EMPHASIZED THAT THE INCOME HAD NOT ACCRUED TO THE A SSESSEE DURING THE YEAR UNDER APPEAL BUT HAD ACCRUED IN SUB SEQUENT YEARS UPON HAPPENING OF CERTAIN EVENT. IT WAS EMPH ASIZED THAT THE ASSESSEE HAD NOT ACQUIRED THE RIGHT TO RECEIVE THE INCOME BECAUSE THE RIGHT WAS SUBJECT TO THE SATISFACTION O F THE ZONAL RAILWAY AUTHORITIES WHICH DID NOT HAPPEN TILL THE C ONCLUSION OF THE YEAR UNDER APPEAL. THE LD. AR ALSO REFERRED TO AND DREW THE I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 7 ATTENTION OF THE BENCH TO THE FOLLOWING EVIDENCES/D OCUMENTS IN THE PAPER BOOK:- PB 73-114 IS AGREEMENT BETWEEN THE APPELLANT AND RAILWAYS IN WHICH AT PB 81 , AS PER CLAUSE 3.1.11 , IT HAS BEEN MENTIONED THAT LEASE CHARGES AS MUTUALLY DECIDED SH ALL BE PAYABLE ON CREATION OF STM 4 NETWORK. PB 82 CONTAINS CLAUSE 3.2.8 WHICH MENTIONS THAT TILL SUCH TIME THAT STM 4 NETWORK IS SETUP , NO CHARGES SHALL BE PAYABLE BY RAILWAYS TO THE APPELLANT PB 37-38 IS AS9 WHICH, PROVIDES THAT RECOGNITION OF I NCOME MAY BE DEFERRED IN CASE OF UNCERTAINTY. PB 39 IS LETTER DATED 30.01.2008 FROM INDIAN RAILW AYS INTIMATING TO THE ASSESSEE THAT LEASE CHARGES WILL BE RS. 7219 PER K.M. TO BE PAID BY ZONAL RAILWAYS BASED ON ACTUAL ROUTE KMS OF STM 4 CAPACITY HANDED OVER TO T HEM AND THE DATE FROM WHICH HANDOVER HAS TAKEN PLACE. PB 40-41 IS LETTER FROM THE ASSESSEE TO RAILWAYS DA TED 23.05.2008 INTIMATING THE LIST OF SECTIONS ALONG WI TH THE DATE OF HANDING OVER FOR STM 4 BANDWIDTH. PB-42 IS LETTER DATED 26.05.2008 FROM RAILWAYS TO T ELECOM ENGINEERS OF INDIAN RAILWAYS SEEKING HANDING OVER T HE STM 4 BANDWIDTH TO ZONAL RAILWAYS BY THE ASSESSEE. PB 43 IS LETTER DATED 12.11.2008 FROM RAILWAYS TO THE ASSESSEE ABOUT THE PAYMENT. PB44 IS LETTER DATED 28.11.2008 FROM THE ASSESSEE TO REGIONAL GENERAL MANAGER OF THE ASSESSEE ONLY SENDI NG THE DETAILS OF STM 4 BANDWIDTH COMMISSION / PROVIDED FO R RAILWAYS. I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 8 PB 45 IS LETTER DATED 19.12.2008 FROM RAILWAYS. PB 46 IS LETTER DATED 12.03.2009 FROM THE ASSESSEE TO RAILWAYS INFORMING CREATION OF STM 4 BANDWIDTH AND REQUESTING FOR THE PAYMENT AS PER ANNEXURE. PB 47 IS ANNEXURE DATED 12.03.2009 SHOWING THE LEA SE CHARGES RECEIVABLE BY THE ASSESSEE. PB -48 IS LETTER DATED 17.03.2009 FROM THE ASSESSEE TO REGIONAL GENERAL MANAGER OF THE ASSESSEE. PB 49-50 IS LETTER DATED 11.06.2009 FROM RAILWAY TO RAILWAY BOARD SEEKING CLARIFICATION FOR THE RESOLUT ION OF THE MATTER. PB 53-54 IS LETTER FROM RAILWAYS DATED 13.08.2009 ADVISING TO RELEASE PAYMENT WHEREVER THE SAME HAS B EEN PROVISION. PB 59 IS PHYSICAL VERIFICATION OF STM 4 BANDWIDTH PROVIDED BY ASSESSEE FOR RAILWAYS DATED 28.03.2009. 5. THE LD. AR FURTHER SUBMITTED THAT ACCRUAL OF IN COME IS GOVERNED BY THE AGREEMENT AND, THEREFORE, THE VARIO US CLAUSES OF THE AGREEMENT CANNOT BE IGNORED. IT WAS SUBMITTED THAT PLAIN READING OF THE VARIOUS CLAUSES OF THE AGREEMENT MAK ES IT AMPLY CLEAR THAT INCOME WOULD ACCRUE ONLY WHEN STM 4 BAND WIDTH IS SET UP TO THE SATISFACTION OF ZONAL AUTHORITIES AND THE CORRESPONDENCE BETWEEN THE ASSESSEE AND THE RAILWAYS ESTABLISHES THE FACT THAT STM 4 BANDWIDTH WAS NOT C OMPLETED TO I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 9 THE SATISFACTION OF THE ZONAL RAILWAY AUTHORITIES T ILL THE END OF THE YEAR UNDER APPEAL. HE SUBMITTED THAT EVEN IF STM 4 HAD BEEN SET UP BUT THE SATISFACTION OF THE ZONAL AUTHORITIE S WAS NOT RECEIVED, NO INCOME COULD BE SAID TO ACCRUE TO THE ASSESSEE AND THEREFORE, THE ADDITION DESERVES TO BE DELETED. 6. THE LD. AR ALSO SUBMITTED THAT SINCE THE TAX RA TES APPLICABLE TO THE COMPANY BOTH IN ASSESSMENT YEAR 2 008-09 (I.E. THE YEAR UNDER APPEAL) AND ASSESSMENT YEAR 2009-10 (I.E. THE YEAR IN WHICH THE COMPANY HAD INCLUDED THE IMPUGNED AMOUNT IN ITS INCOME) WERE THE SAME, THE ADJUSTMENT MADE B Y THE DEPARTMENT WAS REVENUE NEUTRAL. HE RELIED ON THE D ECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VISHNU INDUSTRIAL GASES (ITR NO. 229/1988) AND CIT VS DINE SH KUMAR GOEL 331 ITR 10 (DEL) FOR THE PROPOSITION THAT THE QUESTION AS TO THE YEAR IN WHICH AN INCOME IS CHARGEABLE MAY BE MA TERIAL WHEN THE RATE OF TAX CHARGEABLE ON THE ASSESSEE IN TWO D IFFERENT YEARS IS DIFFERENT BUT IN THE CASE OF INCOME OF COMPANY, TAX IS ATTRACTED AT A UNIFORM RATE, AND, THEREFORE, THE YEAR OF CHARGEA BILITY OF INCOME SHOULD BE OF NO CONSEQUENCE TO THE DEPARTMENT. THE LD. AR ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE PUNJ AB & HARYANA I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 10 HIGH COURT IN THE CASE OF CIT VS VEE GEE INDUSTRIAL ENTERPRISES (I.T.A. NO. 187 OF 2014) FOR THE SAME PROPOSITION A ND SUBMITTED THAT IN LIGHT OF THESE JUDGEMENTS, THE ADDITION OUG HT TO BE DELETED. 7. THE LD. DR SUBMITTED THAT WHEN THE BASIS OF ACC OUNTING IS MERCANTILE, THE RECEIPTS SHOULD BE TAXABLE ON ACCRU AL BASIS ONLY AND, THEREFORE, THE ACTION OF THE ASSESSING OFFICER WAS JUSTIFIED. HE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE SAME SHOULD BE UPHELD. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FOR THE PURPOSE OF THIS APPEA L, WE WILL NOT BE ADJUDICATING ON THE ISSUE OF THE YEAR OF ACCRUAL OF INCOME VIS- A-VIS THE YEAR OF TAXABILITY OF THE INCOME (I.E. TH E IMPUGNED ADDITION) AS IT WOULD MAKE NO DIFFERENCE IN VIEW OF THE JUDGEMENTS OF THE HON'BLE APEX COURT, THE HON'BLE B OMBAY HIGH, THE HONBLE PUNJAB AND HARYANA HIGH COURT AND THE H ON'BLE DELHI HIGH COURT. IN CIT, DELHI, AJMER, RAJASTHAN A ND MADHYA BHARAT V. NAGRI MILLS CO. LTD. (1958) ITR 681, THE HONBLE BOMBAY HIGH COURT HAS HELD, WE HAVE OFTEN WONDERED WHY THE I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 11 INCOME-TAX AUTHORITIES, IN A MATTER SUCH AS THIS WH ERE THE DEDUCTION IS OBVIOUSLY A PERMISSIBLE DEDUCTION UNDE R THE INCOME- TAX ACT, RAISE DISPUTES AS TO THE YEAR IN WHICH THE DEDUCTION SHOULD BE ALLOWED. THE QUESTION AS TO THE YEAR IN W HICH A DEDUCTION IS ALLOWABLE MAY BE MATERIAL WHEN THE RAT E OF TAX CHARGEABLE ON THE ASSESSEE IN TWO DIFFERENT YEARS I S DIFFERENT; BUT IN THE CASE OF INCOME OF A COMPANY, TAX IS ATTRACTE D AT A UNIFORM RATE, AND WHETHER THE DEDUCTION IN RESPECT OF BONUS WAS GRANTED IN THE ASSESSMENT YEAR 1952-53 OR IN THE ASSESSMENT YEAR CORRESPONDING TO THE ACCOUNTING YEAR 1952, THAT IS IN THE ASSESSMENT YEAR 1953-54, SHOULD BE A MATTER OF NO C ONSEQUENCE TO THE DEPARTMENT; AND ONE SHOULD HAVE THOUGHT THAT THE DEPARTMENT WOULD NOT FRITTER AWAY ITS ENERGIES IN F IGHTING MATTERS OF THIS KIND. BUT, OBVIOUSLY, JUDGING FROM THE REFE RENCES THAT COME UP TO US EVERY NOW AND THEN, THE DEPARTMENT APPEARS TO DELIGHT IN RAISING POINTS OF THIS CHARACTER WHICH DO NOT AFFEC T THE TAXABILITY OF THE ASSESSEE OR THE TAX THAT THE DEPARTMENT IS LIKE LY TO COLLECT FROM HIM WHETHER IN ONE YEAR OR THE OTHER. THIS JUDGMENT WAS FOLLOWED BY THE HONBLE DELHI HIGH COURT IN COMMISS IONER OF INCOME-TAX AND ANOTHER V. DINIESH KUMAR GOEL (2011) 333 ITR 10 (DELHI). THE HONBLE DELHI HIGH COURT, AFTER QUO TING THE ABOVE I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 12 OBSERVATIONS, OBSERVED AS UNDER:- 26. THOUGH OUR DISCUSSION ON THE ISSUE IS COMPLETE THE PARTING COMMENTS NEED TO BE MADE. THE RECEIPTS RELA TE TO THE UNEXECUTED PACKAGES, WHICH ARE NOT SHOWN IN THE INSTANT YEAR WOULD BE SHOWN IN THE SUCCEEDING YEAR. RATE OF TAX IN RESPECT OF COMPANIES REMAINS THE SAM E IN ALL THESE YEARS. THEREFORE, THE REVENUE DOES NOT LO SE ANYTHING, AS IT WOULD RECEIVE THE TAX ON THIS INCOM E IN THE SUCCEEDING YEAR. STILL ISSUES ARE RAISED AND MU CH OUTCRY IS MADE FOR NOTHING. XXX XXX XXX XXX XXX XXX XX 28. IN THIS COURT, IN ITS DECISION DT. 6 H MAY, 2008 IN IT REF. NO. 229 OF 1988 ENTITLED CIT VS. VISHNU INDUST RIAL GASES (P) LTD. HAD QUOTED THE AFORESAID PASSAGE AND THEREAFTER REMARKED THAT THE SITUATION DOES NOT SEE M TO HAVE CHANGED OVER THE LAST FIFTY YEARS AND THE REVE NUE CONTINUES TO AGITATE THE QUESTION WHETHER TAX IS LE VIABLE IN A PARTICULAR YEAR OR IN SOME OTHER YEAR. ALAS! T HE AFORESAID WORDS OF WISDOM OF BOMBAY HIGH COUD REMINDED TO THE REVENUE AUTHORITIES MORE THAN TWO YEARS AGO AGAIN HAVE NOT MADE ANY DENT ON THE PSYCH E OF THE REVENUE. 9 . THE MATTER, IN ANY EVENT, STANDS CONCLUDED BY THE J UDGMENT OF THE HONBLE SUPREME COURT IN COMMISSIONER OF INCOME TAX V. EXCEL INDUSTRIES LIMITED (2013) 358 ITR 295 (SC). THE HON'BLE SUPREME COURT HAS HELD:- 32. THIRDLY, THE REAL QUESTION CONCERNING US IS TH E YEAR IN WHICH THE ASSESSEE IS REQUIRED TO PAY TAX. THERE IS NO DISPUTE THAT IN THE SUBSEQUENT ACCOUNTING YEAR, THE ASSESSEE DID MAKE IMPORTS AND DID DERIVE BENEFITS UNDER THE ADVANCE LICENCE AND THE DUTY ENTITLEMENT PASS BOOK AND PAID TAX THEREON. THEREFORE, IT IS NOT AS IF THE I.T.A. NO. 737/DEL/2012 ASSESSMENT YEAR 2008-09 13 REVENUE HAS BEEN DEPRIVED OF ANY TAX. WE ARE TOLD T HAT THE RATE OF TAX REMAINED THE SAME IN THE PRESENT ASSESSMENT YEAR AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEAR. THEREFORE, THE DISPUTE RAISED BY T HE REVENUE IS ENTIRELY ACADEMIC OR AT BEST MAY HAVE A MINOR TAX EFFECT. THERE WAS, THEREFORE, NO NEED FOR THE REVENUE TO CONTINUE WITH THIS LITIGATION WHEN IT WA S QUITE CLEAR THAT NOT ONLY WAS IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHING MUCH TO TH E PUBLIC COFFERS. 10. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY T HE ABOVE JUDGMENTS, WE DELETE THE IMPUGNED ADDITION. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH APRIL , 2016. SD/- SD/- (N.K. SAINI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 29TH OF APRIL, 2016 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 4. DR, ITAT BY ORDER ASSTT. REGISTRAR