The DCIT, Circle-3(2), Ahmedabad V. Shri Govindbhai Becharbhai Patel, Ahmedabad

ITA 887/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6406 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 3(2), AHMEDABAD (APPELLANT) VS SHRI GOVINDBHAI BECHARBHAI PATEL, STAR DYES &INTERMEDIATES, C - 1, PHASE - II, GIDC ESTATE, VATVA, AHMEDABAD PAN: AEHPP4824A (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: SHRI S.N. DIVETIA, A.R. DATE OF HEARING : 31 - 01 - 2 019 DATE OF PRONOUNCEMENT : 1 8 - 02 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2009 - 10 , ARI SES FROM ORDER OF THE CIT(A) - 3, AHMEDABAD DATED 17 - 02 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 887 / A HD/20 17 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 887 /AHD/20 17 A.Y. 2009 - 10 PAGE NO D CIT VS. SHRI GOVINDBHAI BECHARBHAI PATEL 2 2 . THE SOLITARY GROUND OF APPEAL OF THE REV ENUE IS AGAINST THE DECISION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 78 , 07 , 149/ - MADE ON ACCOUNT OF REBATE RECEIVABLE FROM THE REVENUE AUTHORITIES. 3. THE ASSESSING OFFICER HAS INITIATED PROCEEDINGS U/S. 147 R.W.S. 148 OF THE ACT ON THE GROUND THAT ASSESSEE HAS NOT SHOWN AN AMOUNT OF RS. 78 , 07 , 149/ - BEING REBATE RECEIVABLE FROM REVENUE AUTHORITIES WHICH WAS NOT PASSED THROUGH P&L ACCOUNT AND NOT INCLUDED IN THE INCOME. THE ASSESSEE HAS DISCLOSED THE AFORESAID AMOUNT IN THE LOAN AND ADVANCES (ASSETS) PERTAINING TO FINANCIAL YEAR 2008 - 09. ON QUERY, T HE ASSESSEE EXPLAINED THAT THE CLAIM OF REBATE RECEIVABLE PERTAINED TO EXCESS AMOUNT RECEIVABLES FROM EXCISE DEPARTMENT IN RESPECT OF EXC ISE DUTY PAID ON EXPORT SALES. IT IS EXPLAINED THAT AS PER PRO CEDURE ASSESEE HAS TO PAY EXCISE AMOUNT TO THE EXCISE DEPARTMENT AT THE TIME OF REMOVAL OF GOODS AND THE AMOUNT OF EXCISE DUTY PAID IS TO BE SHOWN UNDER THE HEAD LOAN AND ADVANCES IN THE BALANCE SHEET BECAUSE THE SAME AMOUNT USED TO BE RECEIVED AS REFUN D FROM THE EXCISE DEPARTMENT PERTAINING TO THE EXPORT SALE . THE ASSESSING OFFICER HAS NOT AGREED WITH THE ASSESSEE AND STATED THAT ASSESSEE WAS FOLLOWING MERCANTILE BASIS OF ACCOUNTING , THEREFORE, REBATE RECEIVABLE FROM THE GOVERNMENT WAS THE INCOME OF THE ASSESSEE. ACCORDINGLY , THE ASSESSING OFFICER HAS ADDED THE REBATE RECEIVABLE AMOUNT OF RS. 78,07,149/ - TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF T HE ASSESSEE. RELEVANT PART OF THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - I.T.A NO. 887 /AHD/20 17 A.Y. 2009 - 10 PAGE NO D CIT VS. SHRI GOVINDBHAI BECHARBHAI PATEL 3 5. DECISION: I HAVE GONE THROUGH THE FACTS MENTIONED IN THE ASSESSMENT ORDER AND SUBMISSION FILED BY THE APPELLANT CAREFULLY. IT IS NOT REFLECTED FROM THE RECORD THAT T HE CASE WAS REOPENED AS PER AG (AUDIT) AS CLAIMED BY THE APPELLANT. THE AR WAS NOT ABLE TO SAY CLEARLY HIS PROPOSITION AND IT APPEARS THAT THERE IS MISUNDERSTANDING AS FAR AS FACTS OF THIS CASE ARE CONCERNED. THE FILING OF OPINION OF A SR. ADVOCATE HAS HEL P THE AR TO PUT UP HIS CASE IN UNAMBIGUOUS MANNER. IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAS NOT CLAIMED ANY EXPENSES OF EXCISE DUTY PAID OR ROUTED THROUGH R.G. 23 IN THE PROFIT & LOSS ACCOUNT IN RESPECT OF THE AMOUNT SHOWN AS RECEIVABLE UNDER THE AC COUNT HEAD 'CLAIM OF REBATE RECEIVABLE'. IN THE INSTANT CASE, THE AMOUNT PAID IS ONLY TOWARDS ADVANCE WHICH IS SHOWN IN THE BALANCE SHEET TILL THE DOCUMENTS RELATING TO REFUND THEREOF ARE SUBMITTED AND REFUND RECEIVED. THE AMOUNT RECEIVED OR RECEIVABLE WHI CH IS NEVER CLAIMED AS A DEDUCTION OR AS EXPENDITURE WHILE COMPUTING INCOME IS JUST LIKE ADVANCE OR DEPOSIT MADE UNDER THE PROCEDURE OF LAW, THE REFUND OF WHICH UNDER THE RELEVANT PROVISION OF LAW CANNOT BE TREATED AS INCOME IN ANY SENSE BUT IS MERELY RECO VERY OF DEPOSIT OR ADVANCE. SIMILAR ISSUE HAS BEEN DECIDED BY JURISD ICTIONAL ITAT IN THE CASE OF ACI T V. UMEDICA LABORATORIES LTD ITA NO. 1341/AHD/2009 IN WHICH THE REFUND OF EXCISE ,CIUTY WAS SOUGHT TO BE TAXED BY THE AO AND THE SAME WAS DELETED BY CIT (A PPEALS) 'AS THE EXCISE DUTY WAS NOT CLAIMED AS DEDUCTION WHEN PAID BUT WAS SHOWN AS AN ASSET IN THE BALANCE SHEET. IT WAS OBSERVED BY THE IT A T THAT THE AO HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE REALIZATION WAS MORE THAN THE AMOUNT SHOW N AS ASSET BY THE APPELLANT. HON'BLE IT AT, AHMEDABAD U PHELD DECISION OF CIT(A) AND H AS DISMISSED THE GROUND OF REVENUE BY GIVING A VERY CLEAR VERDI CT IN FAVOUR OF APPEL LANT. IN THE CIRCUMSTANCES, I AGREE WITH THE APPELLANT THAT THERE IS NO PROVISION UNDER THE IT ACT TO TAX THE REFUND OF DEPOSIT OR PAYMENT MADE WHICH IS RECEIVED BACK OR IS RECEIVABLE. IT IS NOT THE HEAD OF ACCOUNT BUT THE ACTUAL NATURE OF THE TRANSACTION WHICH IS RELEVANT. IN VIEW OF FACTS MENTIONED ABOVE AND THE DECISION OF HON'BLE ITAT, A HMEDABAD (SUPRA), THE ADDITION MADE BY AO IS HEREBY DELETED. THE GROUNDS NO.2 TO 4 ARE ALLOWED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSE HAS CLEARLY EXPLAINED BEFORE THE ASSESSING OFFICER THAT E XCISE DUTY WAS NOT APPLICABLE IN HIS CASE AS THE E XPORT TRANSACTIONS WERE EXEMPT FROM EXCISE DUTY. HOWEVER AS PER THE RULE IT WAS REQUIRED TO PAY EXCISE DUTY AT THE TIME OF REMOVABLE OF GO O DS/CONSIGNMENT EITHER BY DEBITING RG 23A P ART II REGISTER OR TO BE PAID BY TR 6 CHALLAN OF EXCISE THEN THE SAME WAS TO BE CLAIMED AS REFUND AFTER PROVIDING RELEVANT PRO O F OF EXPORT. WE HAVE NOTICED THAT THE ASSESSING OFFICER HAS NOT CONTROVERTED THE CONTENTION OF THE ASSESSEE B EFORE ADDING THE IMPUGNED AMOUNT TO THE T OTAL INCOME OF THE ASSESSEE. THE ASSESEE HAD ALSO EXPLAINED WITH RELEVANT MATERIAL THAT THE PURCHASE PARTY WAS ONLY PAYING BASIC AMOUNT AS THE EXCISE WAS NOT APPLICABLE IN CASE OF EXPORT. IT IS UNDISPUTED FACT THAT ASSESSEE HAD NOT CLAIMED ANY EXPENSE S OF EXCISE DUTY PAID IN THE P & L A/C, I.T.A NO. 887 /AHD/20 17 A.Y. 2009 - 10 PAGE NO D CIT VS. SHRI GOVINDBHAI BECHARBHAI PATEL 4 THEREFORE , T H E IMPUGNED AMOUNT WAS SHOWN AS CLAIM OF REBATE RECEIVABLE IN THE BALANCE SHEET. IN THE LIGHT OF THE ABOVE AND AFTER CONSIDERING THE MATERIAL FACT THAT ASSESSE HAS NOT DEBITED ANY SUCH EXPENSES IN THE P & L A/C WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE , THEREFORE, THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 02 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 18 / 02 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,