M/S. TAMILNADU PETROPRODUCTS LIMITED,CHENNAI V. THE DEPUTY COMMISSIONER OF INCOMETAX(LTU_APPEALS), CHENNAI

ITTPA 26/CHNY/2020

AI Insights

The case involves M/s. Tamilnadu Petroproducts Ltd., which appealed against the order of the Learned Commissioner of Income Tax (Appeals) confirming the adjustments made by the Transfer Pricing Officer (TPO) and the Assessing Officer (AO) for the Assessment Year 2008-09. The adjustments included a transfer pricing adjustment of Rs.35,52,454 and disallowances under section 40(a)(i) of the Income Tax Act for non-deduction of tax at source on certain payments. The Tribunal found that the CIT(A) had not adequately addressed the issues raised by the assessee and had not provided a reasoned order. Additionally, the Tribunal noted that the excise duty refund, which was taxed in AY 2003-04, should not be taxed again in AY 2008-09 if it had already been included in the income for the earlier assessment year.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107392 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 06-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-10-2024
• Assessment Year: 2008-2009
• Appeal Filed On: 31-12-2020
• Other Referred Cases: PCIT Vs SUMMIT India Water Treatment and Services Ltd, Evolve Clothing Ltd Vs ACIT, Mangalore Ganesh Beedi Works v. CIT, Ram Phal v. State of Haryana & Ors, Maya Devi v. Raj Kumari Batra
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: SUDARMANI; WAY OF
• Keywords: Set aside; Transfer pricing; International transaction; Reasonable cause; TDS; Assessment record; Wholly owned subsidiary; Non-deduction of tax; Deemed export
• Section: 195; 250; 48; 13; 72; 10B

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ \u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0001ी एबी टी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0018ा, लेखा सद\t क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./IT (TP) A No.26/Chny/2020 िनधा\rरण वष\r/Assessment Year: 2008-09 M/s. Tamilnadu Petroproducts Ltd., Manali Express Highway, Manali, Chennai-600 068. v. The DCIT, (LTU-Appeals), Chennai. [PAN: AAACT 1295 M] (अपीलाथ\u000e/Appellant) (\u000f\u0010यथ\u000e/Respondent) अपीलाथ\u000e क\u0012 ओर से/ Appellant by : Mr.Sudarmani, Advocate for Mr.R.Vijayaraghavan, Advocate \u000f\u0010यथ\u000e क\u0012 ओर से /Respondent by : Mr.A. Sasikumar, CIT सुनवाईक\u0012तारीख/Date of Hearing : 25.10.2024 घोषणाक\u0012तारीख /Date of Pronouncement : 06.12.2024 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee company against the order of the Learned Commissioner of Income Tax (Appeals)-9, (hereinafter in short \"the Ld.CIT(A)”), Chennai, dated 10.03.2020 for the Assessment Year (hereinafter in short \"AY”) 2008-09. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 2 :: 2. At the outset, the Ld. Counsel for the assessee submitted that there is a delay of ‘227’ days in filing of this appeal and has filed application explaining the delay. According to the Ld.AR, since assessee was prevented by sufficient cause as explained in the ibid application, he prayed for condonation of delay, for which, the Ld.DR raised objection. But after going through the contents of the relevant documents and application for condonation, we find reasonable cause for the delay so, we condone the delay of ‘227’ days and proceed to adjudicate the appeal on merits. 3. The assessee is a Public Limited Company and is engaged in the business of manufacture of Linear Alkyl Benzene (LAB) and other products. For AY 2008-09, the assessee had returned a loss of Rs.2862 lakhs in its normal computation which was processed u/s.143(1) of the Act on 16.03.2010; and later on, selected for scrutiny under CASS and the AO taking note that the assessee had undertaken the international transaction with its AE M/s.Certus Investment & Trading Ltd., in the Republic of Mauritius, the AO made reference to the TPO for determining the ALP in respect of international transaction. Pursuant thereto, the TPO determined the ALP by passing order dated 31.10.2011 and proposed adjustment with reference to the export sale of the assessee by way of upward adjustment of AE sale to the tune of Rs.35,52,454/-. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 3 :: 4. The AO also made disallowance u/s.40(a)(i) of the Act regarding demurrage charges of Rs.19,94,000/- to M/s.Shell Trading & Shipping Co., and Trade Commission of Rs.2,92,000/- to M/s.Alriaz Agencies Pvt. Ltd., and thus, disallowed an amount of Rs.22,86,800/-. Thus, reducing the returned loss of Rs.2803 lakhs. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who confirmed the action of the TPO/AO which is assailed before us by the assessee. 5. Ground Nos.1-5 of the assessee is against the action of the Ld.CIT(A) confirming the TP adjustment of Rs.35,52,454/- determined u/s.92CA of the Income Tax Act, 1961 (hereinafter in short \"the Act”). In respect of the ALP adjustment made by the TPO, the Ld.AR submitted as under: The Assessee had made export to AE as well as made local sales domestically. It is the contention of the appellant that average price both export to AE as well as domestic sales should be taken to determine the Arm’s Length Price. However, in Assessee’s own case In ITA Nos.1618 and 1619/Mds/2015 for the Assessment year 2007-08 and 2009-10, dated 29.12.2016 the Tribunal in para 7 at page 6 and 7 of the order has held that when non-AE transactions are available in Assessee’s own Case, there is no reason that external comparable data which is on estimated basis should be taken. The CIT(A) (Para 6.2 at Page 5 0f his order) has followed the above order as well as mentioned that the Appellant had accepted similar additions for the assessment year 2013-14 and dismissed the appeal of the Assessee. 6. The Ld.AR submitted that this issue is covered in favor of the assessee by the decision of this Tribunal for the appeal for AY 2007-08 & 2009-10 dated 29.12.2016 [ITA No.1618 & 1619/Mds/2015] and IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 4 :: therefore, he prayed that the action of the Ld.CIT(A) be reversed. Per contra, the Ld.DR doesn’t want us to interfere with the order of the Ld.CIT(A) since the assessee has accepted similar additions for AY 2013- 14 as taken note by the Ld.CIT(A). 7. We have heard both the parties and perused the material available on record. We note that the Ld.CIT(A) has dealt with the issue regarding determination of ALP at Rs.35,52,454/- by holding as under: I have perused the findings of the TPO and AO as per the order of the TPO as well as the AO. I have also considered the written submission filed by the appellant. This issue is a covered issue against the appellant by the assessment orders/appellate orders in the case of A.Ys. 2009-10, 2012-13 and 2013-14. The issue for the A.Y. 2009-10 was confirmed by the Ld.CIT (A) which was also subsequently confirmed by the Hon'ble ITAT and the issue has attained finality as the decision of the Hon'ble ITAT has been accepted and ne further appeal has been filed against the order of the Hon'ble ITAT The assessment for A.Y. 2012-13 is pending before the Hon'ble DRP, Bangalore. As regards the A.Y. 2013-14, the appellant itself has accepted the addition and no further appeal has been filed. The facts and circumstances of the case under consideration for the year under consideration is similar to that of the other assessment years referred herein. The Hon'ble ITAT has confirmed this issue for A.Y. 2009-10 and the order has attained finality and moreover the appellant itself has accepted the addition for the A.Y. 2013-14. In view of these facts and the findings of the Ld. CIT (A)/Hon'ble ITAT on the above issue for the above stated A.Ys, the addition of Rs.35,52,454/- for the year under consideration is confirmed. Accordingly, these grounds of appeal are dismissed. 8. A bare reading of the impugned order shows that the Ld.CIT(A) has gone by the wrong assumption of fact that the Tribunal has confirmed the action of the Ld.CIT(A) on this issue, by virtue of which, he took this issue as covered against the assessee; and the Ld.CIT(A) has also referred to IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 5 :: the TP adjustment made for AY 2013-14 and observed that assessee had accepted such an addition/adjustment because assessee didn’t preferred any appeal against the decision of the TPO/AO. We don’t countenance the impugned action of the Ld.CIT(A) for the simple reason that the First Appellate Authority has to decide the grounds of appeal as per sub- section (6) of section 250 of the Act. The Ld.CIT(A) failed to spell out ‘as to how’ the Tribunal on this issue has taken a view against the assessee, whereas it has been brought to our notice that the Tribunal has on 29.12.2016 passed order in assessee’s case for AYs 2007-08 & 2009-10 [ITA Nos.1618 & 1619/Mds/2015 order dated 29.12.2016] by holding as under: 2.0 The assessee is a public Limited company, filed its return of income declaring total income of Rs.(-)114 lakhs for the AY 2007-08. During the assessment proceedings, the AO made reference to the TPO for determining the Arm’s Length Price (ALP) in respect of the international transaction. The assessee company engaged in manufacturing of Linear Alkyl Benzene (LAB) and has wholly owned subsidiary company by name M/s.Certus Investment & Trading Limited (CITL) in the republic of Mauritius. During the previous year relevant to the AY, the assessee company made sales of 4562.81 Mts. of LAB to its AE(CITL) for Rs.23,45,89,364/-, which resulted in international transaction. 3.0 The assessee company has adopted CUP method for determining the ALP of international transaction. The TPO also accepted the CUP method for determining the international transaction. The assessee company as per Form No.3CEB has adopted comparable price at US$1135 for all the three months i.e July-2006, December-2006 and March-2007 on the basis of external comparables. During the above period, company also had internal transaction with non-AE. The TPO examined the comparables of internal and external transactions for determining the Arm’s Length Price of the export sales to A.E and determined ALP of A.E sales at Rs.24,66,95,343/- adopting internal comparables against the sales declared by the assessee amounting to Rs.23,45,89,364/- thereby suggesting for upward adjustment of Rs.1,21,05,979/-. Subsequently, the assessee filed the rectification petition u/s.154 before TPO and the TPO has passed modification Order u/s.92CA vide order dated 21.01.2011 determining upward revision of adjustment in the AE sale price by Rs.86,67,784/- in place of Rs.1,21,05,979/-. The Ld.CIT(A) confirmed upward revision and the assessee filed appeal challenging the CIT(A) Order. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 6 :: 4.0 For the AY 2009-10, the TPO has made upward adjustment of Arm’s Length Price by Rs.10,53,047/- on identical facts which was confirmed by the Ld.CIT(A) and the assessee has filed the appeal challenging the order of the Ld.CIT(A) before this Tribunal. Since the issues involved in both the assessment years are common and the same, the appeals are disposed off in common Order and facts of the case are extracted from the Orders of the AY 2007-08. 5.0 The assessee company sold 4562.81 MTs of LAB to it’s AE for a sum of Rs.23,45,89,364/- and adopted the CUP Method at 1135 US $ as per Form No.3CEB. The assessee sold product to its AE at US$ 1105.25, 1150.50 and 1139.68 per Mt in three invoices on 17/07/2006, 13.12.2006 & 03.03.2007 respectively and held that it was comparable price at Arm’s Length. The AO, found that the rate of 1135 US$ per MT adopted by the assessee was taken from “Infodrive.com” which was prevailing rate in LAB market and not pertaining to any actual transaction. The TPO has rejected the external comparables since the assessee is having both AE and non-AE transactions during said period and the ALP adopted by the assessee from public domain “Infodrive.com” is not actual transaction. The assessee requested for adjustment w.r.t. DEPB benefit @6%, EPCG benefit @3% and Foreign Exchange Benefit @3% for determining the ALP of sales made to the AE but the TPO rejected the said claim of the assessee also. The assessee went on appeal before the Ld.CIT(A) but did not succeed hence, the appeal filed before this Tribunal. 6.0 Appearing for the assessee Shri Vijayaraghavan, Ld.Sr.Counsel argued that the assessee has rightly adopted the external comparable data which is available on public domain and the TPO rejected the external date simply because it was branded as Relab and argued that there was no difference between the product exported by the assessee and the product Relab. Both the products are the same and subject to the same Central Excise Tariff on same code. The assessee is not a direct exporter of the non-AE transactions and that internal CUP in respect of deemed exports cannot be adopted for ALP unless due credit is given for adjustments such as DEPB, cash incentive and export incentives. The assessee further submitted that the TPO has compared, adopted the internal comparables of the different dates and the TPO should have taken the annual average since there was no internal sales on the same dates. Further, the Ld.AR argued that in case of adopting the internal comparables in AE transactions, the AO should allow adjustment for DEPB benefit, EPCG benefit and Foreign Exchange benefit which is around @12% of the sale price. If the adjustment is made towards DEPB, EPCG, Foreign Exchange benefits, the rate arrived by the assessee is comparable and no adjustment is required. 6.1 On the other hand, the Ld.DR vehemently opposed the arguments of the Ld. AR of the assessee. The Ld.DR argued that assessee wants to take annual average which is not a correct approach, when the details of internal sales are available to the nearest date. The assessee has not made out a case that the rate adopted by the TPO is incorrect with comparable prices on the relevant dates. The AO adopted actual transactions which are close to the date of transaction. Therefore, the Ld.DR argued that, the TPO has rightly made the adjustment towards ALP on the basis of internal non-AE transactions. The D.R further argued that no adjustments need to be allowed for DEPB, export incentives on Internal cup since no such provision is provided for in determining the ALP and the assessee has not claimed any such adjustment in the TP study. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 7 :: 7.0 We heard the rival parties and perused the material placed on record. The assessee has entered into international transaction with its wholly owned subsidiary M/s.Certus Investment & Trading Limited (CITL) for sale of 4562.81 MTs of LAB. The assessee company had the transactions in respect of products related to both AE & non-AE during above period. The assessee has not furnished the external data of comparables for computing the ALP on the basis of actual transactions. The assessee adopted comparable price of US$1135 MT in Form No.3CEB as available in “Infodrive.com” which was the prevailing price in the LAB Market during said period and held that the price of sale was comparable as per the CUP Method. The company had made transactions of unbranded LAB whereas comparables adopted by the assessee was branded product of Re-LAB produced by the Reliance. Since the assessee is having both AE and Non-AE transactions during said period and no external data was furnished by the assessee on actual transactions, it is more reliable and authentic to compare the internal price rather than external comparables on estimated prices. The TPO found that there were non-AE transactions in the months of July and December for comparing the sale price to the proximate date and for exports made on 03/03/2007, average sale price of February month is adopted which is nearest date of sale. Accordingly, the AO adopted monthly average for non-AE transactions. The comparison should be similar as per Rule 10B and branded products cannot be compared with the unbranded products. Though, the central excise duty paid on the same code, brand makes difference and the rates of branded products and non-branded products are quite different on the rates. The assessee is selling at higher rate in domestic market and at lesser rate to AE. The assessee has taken the external comparables from Infrodrive.com which does not distinguish the RPT transactions and non-RPT transactions. When non-AE transactions are available with the assessee own company, there is no reason to take the external comparable data which is on estimated basis and at the prevailing market rates. OECD guidelines also support the internal cup method. Therefore we do not find any infirmity in adopting non-AE internal transactions as comparables and uphold the order of the Ld.CIT(A) and dismiss the assessee’s grounds of appeal on this issue. 9. In the light of the aforesaid action of the Tribunal, we are of the view that the Ld.CIT(A) misdirected himself by wrong assumption of facts & law; and has not even bothered to discuss the relevant facts as well as the law related to the issue raised by the assessee in its grounds of appeal. Therefore, we find that the First Appellate Authority order is not sustainable being bad for non-application of mind. Therefore, we set aside the impugned order of the Ld.CIT(A) and restore the same to his file to pass speaking order after discussing the bare minimum facts necessary IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 8 :: for stating how the issues are covered in favour or against the assessee. Needless to say, the assessee should be granted opportunity of being heard before he adjudicates this issue. 10. Ground No.6 disallowance of demurrage charges of Rs.19,94,000/- and Trade Commission of Rs.2,92,000/- for non-deduction of tax at source. The AO has disallowed demurrage charges paid of Rs. 19,94,000/- to M/s Shell Trading and Shipping Co. Ltd. and trade commission of Rs.2,92,000/- paid to M/s Alrinz Agencies Private Ltd Dubai (Non Resident) u/s.40(a)(i), on the ground that the appellant didn’t submit proper explanation on the admissibility of the above expenditures, as well as for non-deduction of tax at source, which action of the AO has been confirmed by the Ld.CIT(A). Aggrieved, the assessee is before us. In regard to this ground, the Ld.AR submitted as under: The Company had incurred demurrage charges in respect of import of Benzene. Demurrage had been paid as the vessel which was berthed in Tuticorin was cleared on abelated manner. The bill for demurrage raised by Shell Trading and Shipping Company being reimbursement of demurrage charges. Under Section 172 demurrage charges are also part of freight and in respect of foreign shipping companies they are required to pay taxed only under Section 172 and there is no requirement of deduction of tax at source in such cases. This was held so by the High Court of Gujrat in the case of PCIT Vs SUMMIT India Water Treatment and Services Ltd following CBDT Circular No 723 dated 19.09.1995. The CIT(A) at Page 6 of his order has merely stated that the AO in his remand report has stated that contention of AO has already been considered. The AO in Para 2 of Assessment order has merely stated that payment has been made without deduction of tax u/s 195 but has not dealt with the issue. CIT(A) merely confirms the report of AO without explaining his reason for rejection. In view of the CBDT Circular and the decision of the Gujarat High Court, the disallowance of the demurrage charges requires to be deleted. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 9 :: In view of the above, disallowance of demurrage charges of Rs.1994000/- required to be deleted. (Page 37 to 47 of the paper book). (3) Trade commission – The Appellant had paid commission to M/s.Al-riaz Agencies (P) Ltd in connection procuring orders for export of Lab (Linear Alkaline Benzezene) to M/s.Colgate Palmolive (Pakistan) Ltd. The Relevant documents are at Pages 48 to 53 of the Paper book. Commission for procuring orders will not require deduction of tax at source. Evolve Clothing Ltd Vs ACIT -407 ITR 72 (Mad). 11. According to the Ld.AR the impugned order of the Ld.CIT(A) has been passed without explaining any reason for rejecting the aforesaid submissions made by the assessee. Therefore, the impugned action of the Ld.CIT(A) is bad in law for non-application of mind and for not passing reasoned order. 12. We have heard both the parties and perused the material available on record. We note that the AO has disallowed Rs.19,94,000/- and Trade Commission of Rs.2,92,000/- on the grounds that the appellant didn’t submit proper explanation on the admissibility of the above expenditures; and that the assessee failed to deduct tax at source and therefore, it was disallowed u/s.40(a)(i) of the Act to the tune of Rs.22,86,800/-. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to confirm it by holding as under: The AO in the assessment order has disallowed demurrage charges paid of Rs. 19,94,000/- to Shell Trading and Shipping Co. Ltd. and trade commission of Rs.2,92,000/- paid to Alrinz Agencies Private Ltd Dubai (Non Resident) u/s.40(a)(i) since the payments were made without deducting tax at source, for which the appellant has not submitted proper explanation on the admissibility of the above expenditures. , which action of the AO has been confirmed by the Ld.CIT(A). IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 10 :: During the course of appellate proceedings, the appellant submits that the necessity of incurring the above expenditure was explained during the course of assessment proceedings itself. The written submissions as well as the judicial decision relied upon by the appellant has been considered. As regards the demurrage charges, it is clear that the services have been rendered in India. As regards the trade commission, the appellant could not establish that the services have been rendered abroad. The appellant has submitted that the expenditures are in the nature of reimbursements and therefore the TDS provisions are not applicable there on. However, as per the CBDT's Circular No.715, TDS ought to be deducted on reimbursements as well. The appellant has relied upon the decision of Delhi High Court in the case of Commissioner of Income Tax Va EON Technology Private Limited reported in 246 CTR (Del.) 40. In this regard, it is stated that the facts and circumstances of the case are different and distinguishable from the facts of the case under consideration. On perusal of the judicial decision, it is seen that the provisions of the CBDT Circular No.715 was also not brought before the Hon'ble Court. During the appellate proceedings, the AR has furnished written submission which was forwarded to the AO for remand report. The AO has submitted his remand report dated 20.02.2020 that the submissions of the appellant have already been submitted by the appellant during the assessment proceedings. In the assessment order, the AO has stated that the appellant has not submitted proper explanation on the admissibility of the expenditures viz. demurrage charges and trade commission. Further, in the remand report, after verifying the assessment records, the AO submitted his report that the contention of the appellant during the appellate proceedings has already been verified during the assessment proceedings. Therefore, it is seen that the contention of the appellant during the appellate proceedings has already been considered by the AO during the assessment proceedings, which are reiterated by the AO in the remand report. I have considered the findings of the AO as per the assessment order and the remand report. Further, I have also considered the written submission of the appellant. In view of the above discussion, it is held that the payments made are in contravention of the provisions of section 195 of the Act and the AO's action in disallowing the expenditures u/s.40(a)(i) of the Act is upheld. Therefore, the addition of Rs.22,86,800/- u/s.40(a)(i) is hereby confirmed. Accordingly, these grounds of appeal are dismissed. 13. A bare perusal of the operative portion of the impugned order of the Ld.CIT(A) shows that he has not given any reason for confirming the action of the AO. It should be borne in mind that reason is the heart-beat of every judgment, without the same, it become life less (refer Ram Phal v. State of Haryana & Ors reported in [2009] (3) SCC 258). The AO’s IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 11 :: action as well as that of the Ld.CIT(A) confirming the action of the AO disallowing the expenses claimed by the assessee without giving any reason is arbitrary exercise of power and abuse of process of law. Application of mind is demonstrated by disclosure of mind, and disclosure of mind is demonstrated by recording reasons (refer Maya Devi v. Raj Kumari Batra reported in (2010) 9 SCC 486. Failure to give reasons amounts to denial of justice (refer Mangalore Ganesh Beedi Works v. CIT AIR 2005 SC 1308. In the light of the aforesaid facts, we set aside the impugned order of the Ld.CIT(A) and restore the allowability of expenditures back to the file of the Ld.CIT(A) to be decided as per sub- section (6) of section 250 of the Act and direct him to pass a speaking order after hearing the assessee. 14. Ground Nos.8, 9 & 10 raised by the assessee is as under: 8. The income of Rs. 1,92,04,127/- being excise duty refund offered for income this year may be deleted in as much as the same has been held to be taxable in the assessment year 2003-04. 9 As the excise duty payable of Rs. 1,92,04,127/- has not been allowed as a deduction for the assessment year 2003-04 the same is not assessable to tax u/s.41(1) during the year under appeal. 10. This is consequential to the decision of the Income tax Department for the assessment year 2003-04 and hence the ground may be admitted and decided as all the facts are available with the Department. 15. The Ld.AR has submitted that the assessee had paid excise duty of Rs.1,92,04,127/- under protest. According to him, the liability to pay Excise Duty was subject matter of litigation. And that the assessee had IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 12 :: filed a Writ petition before the Hon’ble Madras High Court and the Hon’ble Single Judge of the Madras High Court vide Order dated 20.11.2005 [in respect of assessment year 2002-03] decided the issue in favour of the assessee. And pursuant to it, the Department preferred a writ appeal [against such an order of Single Bench] and the Hon’ble Division Bench of the High Court vide interim order 10.06.2002 allowed the assessee to receive refund of Rs.1,92,04,127/- from the excise department by furnishing a bank guarantee. The AO assessed this amount received as income for the assessment year 2003-04 u/s.41(1) of the Act viz on account of receipt of excise duty refund. However, on appeal before the ITAT, the Tribunal had held that when the dispute was not resolved and is still pending before the Hon’ble Division Bench of the Madras High Court, there was no remission of liability and hence held that amount refunded was not income taxable for the assessment year 2003-04. The department took the matter on appeal before the Hon’ble High Court. When the matter was pending before the High Court, the assessee opted for scheme under VSVS on 24.12.2020 and conceded or didn’t contest the departmental appeal. In other words, such an action of assessee would mean that the assessee accepted the taxability of excise duty refund of Rs.1,92,04,127/- for AY 2003-04. In the light of the assessee’s action opting for the VSVS scheme, the Hon’ble High Court vide order dated 30.03.2021 (Page 70 of the PB) disposed of the Departmental appeal. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 13 :: And pursuant to it, the AO has given effect to the declaration under VSVS order, which order is found placed at Page 67/68 of the Paper Book wherein this amount of Rs.1,92,04,127/- has been added and taxed as income. Thus, the refund of excise duty was taxed in the hands of assessee for AY 2003-04. Therefore, according to assessee, that very same amount of Rs.1,92,04,127/- can’t be again taxed for AY 2008-09 as the same was taxed in the AY 2003-04 [supra]. And in this respect the assessee has raised a ground before this Tribunal [in the appeal filed for AY 2008-09 on 28.12.2020], that amount of Rs.1,92,04,127/- shouldn’t be again taxed for AY 2008-09 since the same was taxed in the AY 2003- 04. This ground is noted to be consequent to offer and acceptance of the VSVS declaration of the assessee for the AY 2003-04 on 24.12.2020 and hence, couldn’t be raised before the lower authorities. As it is a purely legal question of the same amount being taxed twice, resulting in double taxation consequent to acceptance of VSVS declaration by the assessee on 24.12.2020 and tax thereon collected, and pleads that this ground be admitted and be verified by the AO, as to whether the amount of Rs.1,92,04,127/- has been brought to tax under VSVS for the AY 2003- 04, in which case, the same amount [Rs.1,92,04,127/-] shouldn’t be again taxed for AY 2008-09 and requires to be deleted. IT (TP) A No.26/Chny/2020 (AY 2008-09) M/s. Tamilnadu Petroproducts Ltd. :: 14 :: 16. In the light of the submissions, which is self explanatory, Ground Nos. 8, 9 & 10 are admitted and this issue is restored back to the file of the AO for verification and if it is found by the AO that for AY 2003-04, the amount of Rs.1,92,04,127/- has been brought to tax since assessee opted under VSVS on 24.12.2020, then such an amount should not be again taxed in the hands of assessee for AY 2008-09. The AO to pass order as per the observation made by us supra after hearing the assessee and in accordance to law. 17. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 06th day of December, 2024, in Chennai. Sd/- (अिमताभ शु\u0018ा) (AMITABH SHUKLA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे\tई/Chennai, \u001eदनांक/Dated: 06th December, 2024. TLN, Sr.PS आदेश क\u0012 \u000fितिलिप अ\"ेिषत/Copy to: 1. अपीलाथ\u0015/Appellant 2. \u0016\u0017थ\u0015/Respondent 3. आयकरआयु\u001c/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u0016ितिनिध/DR 5. गाड\rफाईल/GF "