The Commissioner of Income Tax, Rajahmundry V. M/s Regma Ceramics Ltd., Yanam

MA 1/VIZ/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6244 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH LUCAS PETER
• Keywords: Assessment record
• Section: 263

Judgement Text

MA NO 1 OF 2011 REGMA CERAMICS LTD YANAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER MA NO.1/VIZAG/2011 (ARISING OUT OF ITA NO.2/VIZAG/2010) ASSESSMENT YEAR: 2005-06 COMMISSIONER OF INCOME TAX, RAJAHMUNDRY VS. REGMA CERAMICS LTD., YANAM (APPELLANT) (RESPONDENT) PAN NO: AABCR 8268 F APPELLANT BY: SHRI T.H. LUCAS PETER, CIT (DR) RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: BY THIS PETITION THE REVENUE SEEKS RECALL OF ORDER DATED 25-9- 2010 PASSED BY THE TRIBUNAL IN THE HANDS OF THE ASS ESSEE AGAINST THE APPEAL FILED BY IT CHALLENGING THE ORDER PASSED BY LEARNED CIT UNDER SECTION 263 OF THE ACT FOR THE ASSESSMENT YEAR 2005 -06. 2. THE FACTS WHICH LED TO THE FILING OF THIS PETITI ON ARE NARRATED IN BRIEF. THE LEARNED CIT PASSED REVISION ORDER UNDER SECTION 263 OF THE ACT ON THREE ISSUES AND THE ASSESSEE CHALLENGED THE SAID ORDER ON ALL THE ISSUES. THE TRIBUNAL SET ASIDE THE ORDER OF THE LEARNED CIT ON TWO ISSUES. OUT OF THE SAID TWO ISSUES, THE REVENUE IS POINTING OUT MISTAKE ON THE ORDER PASSED IN RESPECT OF THE FOLLOWING ISS UE: C) THE GENUINENESS OF THE PAYMENT MADE UNDER THE HEAD BRAND NAME CHARGES AND SERVICE CHARGES TO CMD NEEDS DETAILED EXAMINATION AS PER PROVISIONS OF S.40A(2) OF THE IT ACT. MA NO 1 OF 2011 REGMA CERAMICS LTD YANAM PAGE 2 OF 4 THE LEARNED CIT WAS OF THE VIEW THAT THE ASSESSING OFFICER DID NOT EXAMINE THE ABOVE SAID PAYMENT IN THE LIGHT OF PROV ISIONS OF SEC.40A(2)(A) OF THE ACT, WHICH PROVIDE FOR DISALLO WANCE OF EXCESSIVE OR UNREASONABLE PAYMENT MADE TO ANY PERSON SPECIFIE D UNDER SECTION 40A(2)(B) OF THE ACT, SINCE THE IMPUGNED PAYMENT WA S MADE TO A CONCERN SPECIFIED IN SEC. 40A(2)(B) OF THE ACT. WH ILE DEALING WITH THE ABOVE CITED ISSUE, THE TRIBUNAL OBSERVED THAT THE A SSESSING OFFICER HAS EXAMINED THE SAID ISSUE AND HAS TAKEN A POSSIBL E VIEW. WHILE ARRIVING AT THIS CONCLUSION, THE TRIBUNAL MADE A RE FERENCE TO THE COPY OF LETTER DATED 12-12-2006 FILED BEFORE THE ASSESSI NG OFFICER. NOW IT IS POINTED OUT BY THE REVENUE THAT THE ABOVE SAID L ETTER WAS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PRO CEEDINGS RELATING TO THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT Y EAR 2004-05. ACCORDINGLY IT IS CONTENDED BY THE REVENUE THAT THE OBSERVATION OF THE TRIBUNAL TO THIS EFFECT IS NOT CORRECT AND THE SAME HAS RESULTED IN A MISTAKE APPARENT FROM RECORD. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE EXPLAINE D THE ABOVE FACTUAL ASPECTS AND ACCORDINGLY PRAYED THAT THE MIS TAKE MAY BE CORRECTED BY MODIFYING THE ORDER. HOWEVER, THE LEAR NED AUTHORISED REPRESENTATIVE SUBMITTED THAT THERE IS NO MISREPRES ENTATION OF ANY FACT ON THIS ISSUE IN AS MUCH AS THE ASSESSEE TOOK THE SUPPORT OF THE SAID LETTER ONLY TO POINT OUT THAT THE SAID ISSUE W AS EXAMINED BY THE ASSESSING OFFICER IN THE IMMEDIATELY PRECEDING YEAR AND HE DID NOT FIND THE IMPUGNED PAYMENT TO BE EXCESSIVE OR UNREAS ONABLE WARRANTING A DISALLOWANCE UNDER SECTION 40A(2) OF T HE ACT. HE FURTHER SUBMITTED THAT THE ASSESSMENT RECORD OF EAR LIER YEAR IS ALSO AVAILABLE WITH THE ASSESSING OFFICER. THE LEARNED A.R FURTHER POINTED MA NO 1 OF 2011 REGMA CERAMICS LTD YANAM PAGE 3 OF 4 OUT THAT THERE IS NO CHANGE IN THE TERMS OF PAYMENT ON THE IMPUGNED EXPENDITURE BETWEEN THE EARLIER YEAR AND THE INSTAN T YEAR. ACCORDINGLY HE SUBMITTED THAT THE TRIBUNAL IS RIGHT IN OBSERVING THAT THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE IMPUGNED L ETTER DATED 12-12- 2006 OF THE ASSESSEE WAS FILED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OF THE IMMEDIATELY PRECEDING YEAR. THE ASSESSING OFFICER, IN THAT YEAR, EXAMINED THE PAYMENT MADE TOWARDS BR AND NAME CHARGES AND SERVICE CHARGES AND ALLOWED THE CLAIM OF THE ASSESSEE. THE CONTENTION OF THE ASSESSEE WAS THAT THE QUESTIO N OF APPLICABILITY OF SEC. 40A(2)(A) WAS EXAMINED IN THE PRECEDING YEA R AND SINCE THERE WAS NO CHANGE IN THE TERMS AND CONDITIONS CONCERNIN G THE SAID PAYMENT, THE QUESTION OF APPLICATION OF SEC. 40A(2) (A) NEED NOT BE EXAMINED AGAIN IN THE INSTANT YEAR AND ACCORDINGLY IT SHOULD BE HELD THAT THE VIEW OF THE ASSESSING OFFICER WAS A POSSIB LE VIEW. A COMPARISON OF THE DETAILS OF THE IMPUGNED PAYMENT A S GIVEN IN THE LETTER DATED 12.12.2006 WITH THE ORDER OF LEARNED C IT, ONE COULD UNDERSTAND THAT THERE IS NO CHANGE IN THE TERMS OF PAYMENT. WHEN THERE IS NO CHANGE IN THE NATURE, FACTS AND CIRCUMS TANCES OF A PARTICULAR CLAIM, UNDER THE PRINCIPLES OF CONSISTEN CY, THE SAID CLAIM OF EXPENDITURE IS ALLOWED. THE ASSESSMENT RECORD OF T HE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR IS ALSO AVAILABLE BE FORE THE ASSESSING OFFICER. UNDER THESE CIRCUMSTANCES, THE TRIBUNAL H ELD THAT THE VIEW TAKEN BY THE ASSESSING OFFICER, IN RESPECT OF IMPUG NED EXPENDITURE CLAIM, IS A POSSIBLE VIEW. IN VIEW OF THE FOREGOIN G DISCUSSIONS, WE DO MA NO 1 OF 2011 REGMA CERAMICS LTD YANAM PAGE 4 OF 4 NOT FIND ANY ERROR IN THE ORDER OF THE IMPUGNED ORD ER OF THE TRIBUNAL WHICH REQUIRE OUR INTERFERENCE UNDER SECTION 254(2) OF THE ACT. 5. IN THE RESULT, THE MISCELLANEOUS PETITION OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT M EMBER PVV/SPS VISAKHAPATNAM, DATE: 08-03-2011 COPY TO 1 THE COMMISSIONER OF INCOME TAX, RAJAHMUHDRY 2 M/S REGMA CERAMICS LTD, NEAR BUS STAND, YANAM 53346 4 3 THE DR, ITAT, VISAKHAPATNAM. 4 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM