ACIT, Jaipur V. RAJASTHAN STATE BEVERAGES CORP. LTD., Jaipur

ITA 968/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99327 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B M DASOT CA DHK
• Keywords: Business expenditure; Competent authority; Revenue expenditure
• Section: 43B; 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 968/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 . THE ACIT, CIRCLE-6, JAIPUR. CUKE VS. M/S. RAJASTHAN STATE BEVERAGES CORPN. LTD., 1 ST FLOOR, D-BLOCK, VITTA BHAWAN, JANPATH, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCR 9522 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA (CIT ) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.M. DASOT (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14.09.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/09/2015. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT (A)-II, JAIPUR DATED 08.10.2013 FOR THE A.Y. 2010-11. THE GROUNDS RAISED IN THE APPEAL ARE AS UNDER :- (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADD ITION OF RS. 24 CRORES MADE BY THE AO BY DISALLOWING THE PAYMENT OF PRIVIL EGE FEES WITHOUT APPRECIATING THE FACT THAT SAID PAYMENT WAS APPLICA TION OF INCOME OR APPROPRIATION OF PROFIT AND ALSO THE FACT THAT THES E EXPENSES ARE OF CAPITAL NATURE. 2 ITA NO. 968/JP/2013 A.Y. 2010-11 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN.LTD. (2)(A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETING ADD ITION OF RS. 22,23,566/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT (APPEAL) HAS ERRED IN HOLDING THAT EMPLOYEES CONTRIBUTION TO PF ARE GOVERNED BY THE PROVISION OF SECTION 43B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(24)(X) OF I.T. ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CONCERN OF GOVERNMENT OF RAJASTHAN ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF IMFL/BEER IN THE STATE OF RAJASTHAN. THE ASSESSEE CORPORATION HAS P AID A SUM OF RS. 24 CORES TO THE GOVERNMENT OF RAJASTHAN AS PRIVILEGES FEES. THE AO DISALLOWED THE SAME AND ADDED TO THE INCOME OF THE ASSESSEE ON THE GROUND THAT THE P AYMENT OF PRIVILEGE FEES BY PAYING OUT OF THE RECEIPTS IS AN APPROPRIATION OF PROFIT A S SAME IS PAID TO STATE GOVERNMENT MERELY AS DISTRIBUTION ON PROFIT BEING STATE GOVT. UNDERTAKING. THIS IS IN THE NATURE OF BUSINESS EXPENDITURE AND IS ALLOWABLE U/S 37(1) OF THE IT ACT. THE LD. CIT (A) DISCUSSED THE ISSUE OF PRIVILEGE FEES IN HIS ORDER AT PARA 2.3 OF HIS ORDER. THE ISSUE IS COVERED BY THE DECISIONS OF ITAT JAIPUR BENCH IN TH E ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS WHEREIN THE ITAT HAS ALLOWED THE P RIVILEGE FEES PAID TO THE STATE GOVERNMENT HAS BEEN ALLOWED. THUS, THE LD. CIT (A) OBSERVED THAT THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW THE PRIVILEGE FEES AS REVE NUE EXPENDITURE. 3. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 3 ITA NO. 968/JP/2013 A.Y. 2010-11 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN.LTD. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE GROUND PERTAINS TO PAYMENT OF PRIVILEG E FEES HAS BEEN ALLOWED AS REVENUE EXPENDITURE BY THIS BENCH OF THE TRIBUNAL IN THE MA TTER OF RAJASTHAN STATE BEVERAGES CORPORATION LTD. IN ITA NO. 540/JP/2011 FOR THE A.Y . 2007-08 AND ALSO IN ITA NO. 166/JP/2012 FOR THE A.Y. 2008-09. THE RELEVANT FIN DING OF THE TRIBUNAL FOR THE A.Y. 2007-08 VIDE ITS ORDER DATED 21.10.2011 IN ITA NO. 540/JP/2011 IS REPRODUCED AS UNDER :- 14. THE LD. CIT(A) AFTER CONSIDERING THE OBSERVATIO N DELETED THE ADDITION AFTER OBSERVING AS UNDER:- IN THE PRESENT CASE THE ASSESSEE COMPANY WAS GRANTE D EXCLUSIVE PRIVILEGES FOR WHOLESALE TRADE OF INDIAN MADE FOREIGN LIQUOR AND BEER IN THE STATE OF RAJASTHAN FOR THE F INANCIAL YEAR 2006-07 UNDER THE PROVISIONS OF THE RAJASTHAN EXCIS E ACT, 1950 BY COMPETENT AUTHORITY UNDER THE SAID ACT. IN EXERC ISE OF ITS POWERS U/S 30 AND 42 OF THE RAJASTHAN EXCISE ACT, 1950, THE COMPETENT AUTHORITY UNDER THE SAID ACT HAS LEVIED A PRIVILEGES FEES OF RS. 15 CRORES FOR FINANCIAL YEAR 2006-07 VI DE ITS ORDER NO. F.4(5)/FD/EX/2005 DATED 28-03-2007 UPON THE ASS ESSEE COMPANY IN LIEU OF GRANTING THE SAID PRIVILEGES. IN VIEW OF THESE FACTS AND FOLLOWING THE ORDER OF HON'BLE TRIBUNAL FOR ASSESSMENT YEAR 2006-07, I DIRECT THE AO TO DELETE THE ADDITION OF RS. 15 CRORES. THIS GROUND OF APPEAL IS ALLOWED. 15 AFTER HEARING BOTH THE PARTIES, WE FEEL THAT ISS UE BEFORE US STANDS COVERED BY THE ORDER OF THE TRIBUNAL IN T HE CASE OF THE ASSESSEE FOR EARLIER YEARS AND HENCE WE DECLINE TO INTERFERE IN THE FINDING OF THE LD. CIT(A). 4 ITA NO. 968/JP/2013 A.Y. 2010-11 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN.LTD. THE ABOVE REFERRED PARAS 14 & 15 OF THE TRIBUNALS ORDER IN ITA NO. 540/JP/2011 FOR A.Y. 2007-08 HAS ALSO BEEN RELIED UPON BY THE TRIBU NAL WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR THE SUBSEQUENT ASSESSMENT YEAR 2008-09 IN ITA NO. 166/JP/2012 DECIDED ON 28.11.2014. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN RESPECT OF THE ISSUE PERTAINS TO PAYMENT OF PRIVILE GE FEES OF RS. 24,00,00,000/- PAID TO THE STATE GOVERNMENT, WE FIND THAT THE ISSUE IS SQU ARELY COVERED BY THE DECISION OF THIS BENCH (SUPRA) IN EARLIER YEARS. RESPECTFULLY FOLLOW ING THE EARLIER DECISIONS OF THE TRIBUNAL ON THE SAME ISSUE, THIS GROUND OF THE REVE NUE IS DISMISSED. 6. WITH REGARD TO GROUND NO. 2(A) AND 2(B) RELATING TO DELETION OF ADDITION OF RS. 22,23,566/- IN RESPECT OF DEPOSITING THE ESI AND PF, THE LD. D/R HAS RELIED UPON THE ORDER OF AO. HOWEVER, LD. CIT (A) HAS ALLOWED THE PAYMENT OF ESI AND PF CONTRIBUTIONS VIDE PARA 3.3 OF HIS ORDER FOLLOWING THE ORDER OF H IS PREDECESSOR FOR THE A.Y. 2008-09. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE DEPOSITED THE PAYMENT OF PF AND ESI BEFORE THE DUE DATE OF FILING OF RETURN F OR THE IMPUGNED ASSESSMENT YEAR WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 43B OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF APEX C OURT IN THE MATTER OF CIT VS. VINAY CEMENT, 213 CTR 268 AND ALSO RELIED UPON THE JUDGME NT IN THE CASE OF CIT VS. P.M. ELECTRONICS LTD., 313 ITR 161, CIT VS. AIMIL LTD. & OTHERS., 321 ITR 508 7. WE HAVE HERD RIVAL CONTENTIONS AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE JUDGMENT OF HONBLE SUPREME COURT (SUPRA) IS SQ UARELY APPLICABLE TO THE QUESTION RAISED IN GROUND NO. 2(A) AND 2(B) IN FAVOUR OF THE ASSESSEE. MOREOVER, THE ISSUE RAISED 5 ITA NO. 968/JP/2013 A.Y. 2010-11 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN.LTD. BY THE REVENUE IN RESPECT OF GROUND NO. 2(A) AND 2( B) WERE ALSO RAISED IN THE EARLIER YEARS AND THE DECISION OF THIS BENCH OF THE TRIBUNA L IS ALSO AVAILABLE IN THIS REGARD, IN FAVOUR OF THE ASSESSEE. HENCE, THE GROUNDS RAISED B Y THE REVENUE ARE DEVOID OF ANY MERIT AND, THEREFORE, THE SAME ARE DISMISSED. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/09/2015 . SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/09/2015 DAS/ VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR 2. IZR;FKHZ @ THE RESPONDENT-M/S. RAJASTHA STATE BEVERAGES CORPN., JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.968/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 6 ITA NO. 968/JP/2013 A.Y. 2010-11 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN.LTD. SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER