Pankaj Ranka, Bangalore V. ITO, Bangalore

ITA 859/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7024 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 26-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SANDEEP GOEL
• Assessee Lawyers: L BHARATH

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH SMC-C, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER ITA NO.859 (BANG) 2016 (ASSESSMENT YEAR : 2010 11) SHRI PANKAJ RANKA, APPELLANT NO. 57A, 15TH CROSS, CUBBONPET MAIN ROAD, BENGALURU - 560002 PAN. ADZPR8650H VS THE ITO, WARD 5 (3), BENGALURU RESPONDENT ASSESSEE BY : SHRI L. BHARATH, C. A. REVENUE BY : DR. SANDEEP GOEL, ADDL. CIT DATE OF HEARING : 20-12-2017 DATE OF PRONOUNCEMENT : 21-12-2017 O R D E R PER A. K. GARODIA, A.M.: THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIRE CTED AGAINST THE ORDER OF CIT (A) 5, BANGALORE DATED 10.02.2016 FOR A. Y . 2010 11. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS BUT THE ONLY GRIEVANCE OF THE ASSESSEE IS ABOUT DISALLOWANCE OF RS. 616,980/- AS PRIOR PERIOD EXPENDITURE. 3. HEARD BOTH SIDES. THIS IS THE MAIN SUBMISSION OF THE LEARNED AR OF THE ASSESSEE THAT THE LIABILITY HAS CRYSTALLIZED IN THE PRESENT YEAR AND THEREFORE, IT SHOULD BE ALLOWED. HE HAD DRAWN MY AT TENTION TO PAGES 3 & 4 OF THE ASSESSMENT ORDER WHERE THE AO HAS DISCUSSED THE FACTS AND DECIDED THE ITA NO. 859(BANG)2016 2 ISSUE. HE POINTED OUT THAT IT WAS SUBMITTED BEFORE THE AO THAT AS PER THE UNDERSTANDING OF THE ASSESSEE WITH M/S RELIANCE LIM ITED, IF THE ASSESSEE BRINGS IN BULK BUSINESS, TRADE DISCOUNT WILL BE ALL OWED TO THE ASSESSEE AND IT HAS TO BE PASSED ON TO THE CUSTOMER OF THE ASSESSEE I.E. M/S VIJAYMOHINI MILLS. IT IS ALSO NOTED BY THE AO THAT AS PER THE S UBMISSION OF THE ASSESSEE, THE ASSESSEE RECEIVED RS. 786,972/- AS DISCOUNT FRO M M/S RELIANCE IN FY 2008 09 (A. Y. 2009 10) AND IT WAS OFFERED TO T AX IN THAT YEAR BECAUSE DUE TO NON RECONCILIATION OF ACCOUNTS WITH M/S VIJA YMOHINI MILLS, THE DISCOUNT COULD NOT BE PASSED ON TO THIS PARTY IN TH AT YEAR AND IN THE PRESENT YEAR, AFTER A LOT OF DISCUSSION AND DELIBERATION, T HE ACCOUNTS WERE FINALLY RECONCILED ON 18.03.2010 AND BY THAT TIME, THE ACCO UNTS FOR A. Y. 2009 10 WERE FINALIZED AND THEREFORE, THE DISCOUNT WAS PASS ED ON TO M/S VIJAYMOHINI MILLS IN THE PRESENT YEAR. HE POINTED OUT THAT THIS IS NOT THE CASE OF THE AO THAT THESE SUBMISSIONS OF THE ASSESSEE ARE INCORREC T. HE POINTED OUT THAT THIS IS THE OBJECTION OF THE AO THAT THE EXPENDITUR E CANNOT BE ALLOWED IN THE YEAR IN WHICH THE DIFFERENCE WAS RECONCILED. IN MY CONSIDERED OPINION, THIS IS SETTLED LAW THAT IF THE LIABILITY HAS CRYSTALISE D IN A LATER YEAR, DEDUCTION IS ALLOWABLE IN THAT YEAR. HENCE, IF THE ASSESSEE IS A BLE TO ESTABLISH THAT THE LIABILITY TO PASS ON DISCOUNT TO M/S VIJAYMOHINI MI LLS HAS CRYSTALISED IN THE PRESENT YEAR, DEDUCTION IS ALLOWABLE IN THE PRESENT YEAR BUT THERE IS NO FINDING OF AO OR CIT (A) ON THIS ASPECT. THEREFORE, I FEEL IT PROPER TO RESTORE THIS MATTER TO AO FOR A FRESH DECISION. ACCORDINGLY , I SET ASIDE THE ORDER OF CIT (A) AND RESTORE THIS MATTER TO AO FOR A FRESH D ECISION WITH THE DIRECTION THAT THE ASSESSEE HAS TO ESTABLISH THAT THE LIABILI TY TO PASS ON DISCOUNT TO ITA NO. 859(BANG)2016 3 M/S VIJAYMOHINI MILLS HAS CRYSTALISED IN THE PRESEN T YEAR. IF THE ASSESSEE IS ABLE TO DO SO, DEDUCTION TO THAT EXTENT SHOULD BE A LLOWED IN THE PRESENT YEAR. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE: D A T E D : 21.12.2017. /MS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.