SKOL BREWERIES LTD, V. ASST CIT RG 8(3),

MA 136/MUM/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1190 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 06-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: AKSHAY ANAND; C S AGGARWAL AAKASH UPPAL
• Keywords: Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI K BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI P. M. JAGTAP, AM & SHRI VIJAY PAL RAO, JM MISCELLANEOUS APPLICATION NO. 136/MUM/2013 ( ARISING FROM ITA NO. 6175/MUM/2011 A. Y - 2007-08 ) SKOL BREWERIES LTD., SOLITAIRE CORPORATE PARK, 10, UNIT NO. 1021, 2 ND FLOOR, SURVEY NO. 131A, CHAKLA, ANDHERI KURALA ROAD, ANDHERI (E) MUMBAI-93 VS THE ASSISTANT COMMISSIONER OF INCOME TAX, RANGE 8(3) MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AAICS2238R ASSESSEE BY SHRI C. S AGGARWAL, AAKASH UPPAL & AKSHAY ANAND REVENUE BY SHRI HARI GOVIND SINGH DATE OF HEARING 6 TH SEPTEMBER 2013 DATE OF PRONOUNCEMENT 4 TH OCTOBER 2013 ORDER PER VIJAY PAL RAO, JM BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSESS EE IS SEEKING RECTIFICATION OF MISTAKE IN THE ORDER DATED 18.1.20 13 OF THIS TRIBUNAL WHEREBY THE APPEAL OF THE ASSESSEE WAS DISPOSED OFF . 2. THE MISCELLANEOUS APPLICATION IS DIRECTED IN RES PECT OF FINDING OF THIS TRIBUNAL ON THE GROUND NO. 2.2 ON THE ISSUE OF DISALLOWANCE MADE U/S 40(A)(IA) OF THE INCOME TAX ACT IN RESPECT OF D ISCOUNT GIVEN TO THE DISTRIBUTORS WHICH WAS TREATED BY THE AO AS COMMISS ION. MA 136/M/2013 SKOL BREWERIES LTD. 2 3. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A S WELL AS LD. DR. THE LD. COUNSEL HAS POINTED OUT VARIOUS ALLEGED MIS TAKES IN THE ORDER WHICH ARE SUMMARISED AS UNDER: I) IN PARA 9.7 OF THE IMPUGNED ORDER WHEREIN THE WO RD AGENT/DISTRIBUTORS USED BY THIS TRIBUNAL IS NOT CORRECT. II) IN PARA 10.1 THE TRIBUNAL HAS STATED THAT IT IS AN UNDISPUTED FACT THAT THE AMOUNT OF SO-CALLED DISCOUNT BY WAY OF CREDIT N OTE HAS NOT BEEN PASSED ON TO THE RETAILER. THE ASSESSEES GRIEVANCE IS THAT THE ASSESSEE HAS NOT ACCEPTED THIS FACT BUT RIGHT FROM THE BEGIN NING THE ASSESSEE CLAIMED IT AS DISCOUNT GIVEN TO THE DISTRIBUTORS. III) REGARDING OBSERVATION THAT THE SO-CALLED DISCO UNT WAS GIVEN THROUGH CREDIT NOTE AND NOT CONSIDERED IN THE INVOICE IS CO NTRARY TO THE DECISION OF HONBLE SUPREME COURT IN CASE OF M/S IFB INDUSTR IES VS STATE OF KERALA. IV) NOT CONSIDERING THE INVOICES RAISED BY THE DIST RIBUTORS TO THE RETAILER SHOWING THE DISCOUNT WAS PASSED ON THE RETAILERS. V) THE OBSERVATION OF THE TRIBUNAL THAT NO SCHEME UNDER WHICH THE DISCOUNT HAS BEEN GIVEN WAS PRODUCED IS CONTRARY T O THE RECORD BECAUSE A COPY OF MARKETING GUIDELINES/SALES MARKET ING PROMOTIONS STRATEGY WAS PLACED IN THE PAPER BOOK. VI) THE DECISION IN THE CASE OF JAI DRINKS 336 ITR 383 (DEL.) AND VISAKAPATNAM BENCHES OF THIS TRIBUNAL IN CASE OF PE ARL BOTTING (P) LTD. 46 SOT 133 HAVE NOT BEEN CONSIDERED. 4. AS REGARDS AN ERROR IN PARA 9.7 OF THE IMPUGNED ORDER IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE MA 136/M/2013 SKOL BREWERIES LTD. 3 DISCOUNT IN QUESTION WAS GIVEN TO THE DISTRIBUTORS THEREFORE, THE WORD USED BY THE TRIBUNAL AS AGENTS/DISTRIBUTORS IS CONT RARY TO RECORD. AT THE OUTSET WE NOTE THAT THOUGH THE TERM AGENTS/DISTRIBU TORS IS USED IN PARA 9.7 BUT THE SAME IS ONLY IN RESPECT OF THE QUESTION OF TAKING THE ENTIRE SALE INTO CONSIDERATION BY THE AO INSTEAD OF THE SA LE THROUGH AGENTS/DISTRIBUTORS. WE FURTHER NOTE THAT WHILE DEC IDING THE QUESTION OF DISALLOWANCE OF THE ALLEGED INCENTIVE/SO-CALLED DIS COUNT THE TRIBUNAL HAS GIVEN THE FINDING ON THE BASIS OF THE FACT THAT THE SAME IS GIVEN TO THE DISTRIBUTORS. THEREFORE, WHEN THIS TERM AGENTS/DIST RIBUTORS APPEARING IN PARA 9.7 HAS NO INFLUENCE OR BEARING ON THE FINDING OF THE TRIBUNAL ON THE ISSUE THEN WE DO NOT FIND ANY SUBSTANCE ON THIS POINT. IT IS PERTINENT TO NOTE THAT IN PARA 9.7 THE TRIBUNAL HAS DISCUSSED THE AOS FINDING REGARDING THE PREVAILING RATE OF COMMISSION IN THE INDUSTRY AND THAT CONTEXT THE OBSERVATION OF THE TRIBUNAL IS IN FAVOU R OF THE ASSESSEE BY DISAPPROVING THE ACTION OF THE AO WHEREBY THE ENTIR E SALE OF THE ASSESSEE WAS TAKEN INTO CONSIDERATION INSTEAD OF TH E SALE THROUGH AGENTS/DISTRIBUTORS ONLY. ACCORDINGLY, IN OUR VIEW THERE IS NO APPARENT MISTAKE ON RECORD IN PARA 9.7 OF THE IMPUGNED ORDER WHICH CAN BE RECTIFIED U/S 254(2) OF THE INCOME TAX ACT. 5. AS REGARDS THE MISTAKE IN PARA 10.1 THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS PRODUC ED THE INVOICE ISSUED BY THE DISTRIBUTORS TO THE RETAILERS WHEREIN THE DISCOUNT HAS BEEN PASSED ON TO THE RETAILERS/CONSUMERS THEREFORE, TH E OBSERVATION OF THE TRIBUNAL THAT IT IS AN UNDISPUTED FACT THAT THE SO-CALLED DISCOUNT MA 136/M/2013 SKOL BREWERIES LTD. 4 BY WAY OF CREDIT NOTE HAS NOT BEEN PASSED ON TO THE RETAILER IS CONTRARY TO RECORD. THE RELEVANT OBSERVATION OF THE TRIBUNAL IN PARA 10.1 IS AS UNDER: 10.1 .. IT IS AN UNDISPUTED UNDISPUTED UNDISPUTED UNDISPUTED FACT THAT THE AMOUNT OF SO CALLED DISCOU NT, BY WAY OF CREDIT NOTE HAS NOT BEEN PASSED ON TO THE RETAILER. 6. WE HAVE CAREFULLY GONE THROUGH THE RELEVANT RECO RD. WE NOTE THAT DURING THE COURSE OF HEARING OF THE APPEAL NO SUCH REFERENCE WAS MADE BY THE ASSESSEE IN RESPECT OF THE INVOICE RAISED BY THE DISTRIBUTORS TO THE RETAILERS. IT IS PERTINENT TO NOTE THAT THE ASS ESSEE FILED A PAPER BOOK CONTAIN THOUSANDS OF PAGES AND IT IS NEITHER FEASIB LE NOR DESIRABLE TO CONSIDER EACH AND EVERY PAGE OF PAPER BOOK UNLESS T HE RECORD IS REFERRED DURING THE ARGUMENT OR IT HAS BEEN CONSIDE RED BY THE AUTHORITIES BELOW. HOWEVER, AFTER GOING THROUGH THE RECORD NOW WE FIND THAT THE INVOICES RAISED BY THE DISTRIBUTORS DOES N OT INDICATE THE NATURE OF DISCOUNT AND IN SOME OF THE INVOICES IT IS STATE D AS CASH DISCOUNT WHICH DOES NOT REPRESENT THE SO CALLED DISCOUNT GIV EN BY THE ASSESSEE. EVEN OTHERWISE THE ISSUE WAS REMITTED BY THIS TRIBU NAL TO THE RECORD OF THE AO FOR FURTHER VERIFICATION THEREFORE, IF THE A SSESSEE IS ABLE TO PROVE THAT THE ALLEGED DISCOUNT GIVEN TO THE DISTRIBUTORS HAS BEEN ULTIMATELY PASSED ON TO THE RETAILER/ULTIMATE CONSUMER THE SAM E HAS TO BE CONSIDERED BY THE ASSESSING OFFICER. AS REGARDS THE TERM UNDISPUTED FACT APPEARING IN PARA 10.1 IT APPEARS THAT THE SAM E HAS BEEN USED BY THE TRIBUNAL BECAUSE NO WHERE THE ASSESSEE HAS CLAI MED THAT THE ALLEGED DISCOUNT HAS BEEN PASSED ONTO THE RETAILER OR ULTIMATE CONSUMER. MA 136/M/2013 SKOL BREWERIES LTD. 5 THE ONUS IS ON THE ASSESSEE IS TO PROVE THAT THE IN CENTIVE IN QUESTION IS IN THE NATURE OF DISCOUNT AND ONE OF THE CRUCIAL AS PECT TO PROVE ITS CLAIM THE ASSESSEE HAD TO COME UP WITH FACT THAT THE SAID DISCOUNT WAS PASSED ON TO THE RETAILER. WHEN NO SUCH FACT WAS AG ITATED EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE THIS TRIBUNAL THEN THIS TERM UNDISPUTED FACT WAS USED IN ABSENCE OF CONTRARY CLAIM. HOWEVER , SINCE THE ISSUE HAS BEEN SET ASIDE TO THE AO BY THE TRIBUNAL THEREF ORE, IN THE INTEREST OF JUSTICE WE MODIFY THAT THE SENTENCE OF PARA 10.1 OF THE IMPUGNED ORDER AS REPRODUCE ABOVE AND THE SAME MAY BE READ AS UNDE R: 10.1 IT IS APPARENT APPARENT APPARENT APPARENT THAT THE AMOUNT OF SO CALLED DISCOUNT BY WAY OF CREDIT NOTE HAS NOT BEEN PASSED ON TO THE RETAILER. 7. AS REGARDS THE MISTAKE IN PARA 12 OF THE IMPUGNE D ORDER IN RESPECT OF THE OBSERVATION OF THE TRIBUNAL THAT THE SO CALLED DISCOUNT GIVEN TO THE DISTRIBUTOR THROUGH CREDIT NOTE WAS PO ST SALE TRANSACTION AND NOT AT THE TIME OF SALE. THE LD. COUNSEL FOR TH E ASSESSEE HAS SUBMITTED THAT THIS OBSERVATION OF THE TRIBUNAL IS CONTRARY TO THE DECISION OF HONBLE SUPREME COURT IN CASE OF IFB IN DUSTRY VS PL KERALA. IN OUR HUMBLE VIEW WHEN THIS ISSUE HAS NOT BEEN RAI SED BY THE ASSESSEE IN THE SALES TAX MATTER AND THE ASSESSEE HAS ADMITT ED THAT THE TURNOVER SHOWN FOR THE PURPOSE OF SALES TAX IS THE AMOUNT AS PER THE ORIGINAL INVOICES WITHOUT REDUCING THE AMOUNT OF SO C ALLED DISCOUNT THEN THE FINDING OF THIS TRIBUNAL IS NOT B ASED ONLY ON LEGAL ASPECT BUT BY CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES RELEVANT MA 136/M/2013 SKOL BREWERIES LTD. 6 FOR ADJUDICATION OF THE ISSUE. THE ASSESSEE HAS OTH ERWISE NOT DISPUTED THE FACT THAT THE ALLEGED DISCOUNT WAS NOT REDUCED/ ADJUSTED FROM THE TOTAL TURNOVER AS PER THE ORIGINAL INVOICES FOR THE PURPOSE OF SALES TAX THEREFORE, THE DECISION OF HONBLE SUPREME COURT WO ULD NOT HELP THE CASE OF THE ASSESSEE. ACCORDINGLY, WE DO NOT FIND A NY ERROR APPARENT ON THE FACE OF THE IMPUGNED ORDER IN PAR 12 WHICH CAN BE RECTIFIED U/S 254(2). 8. THE NEXT POINT RAISED IN THE MISCELLANEOUS APPLI CATION IS REGARDING THE EXISTENCE OF MARKETING GUIDELINES/SALES MARKETI NG/PROMOTIONS STRATEGY. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT IN PARA 13 OF THE IMPUGNED ORDER THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY SCHEME UNDER WHICH SUCH B ENEFIT HAS BEEN GIVEN TO THE DISTRIBUTORS WHEREAS A COPY OF MARKETI NG GUIDELINES HAS BEEN PLACED IN THE PAPER BOOK. IT IS PERTINENT TO N OTE THAT DURING THE COURSE OF HEARING NO SUCH MARKETING GUIDELINES WAS REFERRED OR RELIED UPON BY THE ASSESSEE. HOWEVER, THE ALLEGED MARKETIN G GUIDELINES DOES NOT INDICATE THAT THE SAME WAS APPROVED BY THE BOAR D OF DIRECTORS AS NEITHER ANY RESOLUTION IS PLACED ON RECORD NOR ANY REFERENCE OF SUCH RESOLUTION HAS BEEN GIVEN IN THE MARKETING GUIDELIN ES. EVEN OTHERWISE THE MARKETING GUIDELINES RELIED UPON BY THE ASSESSE E HAS NOT BEEN EXAMINED BY THE AUTHORITIES BELOW THEREFORE, IN THE INTEREST OF JUSTICE WE MODIFY OUR FINDING IN PARA 13.1 AND DIRECT THE A O TO EXAMINE AND VERIFY THE SAME. MA 136/M/2013 SKOL BREWERIES LTD. 7 9. THE LAST CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE IS REGARDING NON CONSIDERATION OF DECISION IN CASE OF JAI DRINKS (SUPRA) AS WELL AS PEARL BOTTING (P) LTD. (SUPRA). WHEN THE FI NDING HAS BEEN GIVEN ON THE BASIS OF THE FACTS OF THE CASE AND NOT PUREL Y ON THE BASIS OF A PRINCIPLE OF LAW THEN THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE WOULD NOT HELP THE CASE OF THE ASSESSEE. E VEN OTHERWISE JURISDICTION OF THE TRIBUNAL U/S 254(2) IS VERY LIM ITED AND CIRCUMSCRIBED. A FINDING GIVEN ON MERIT CANNOT BE REVIEWED IN THE PROCEEDINGS U/S 254(2). THE EVIDENCE CONSIDERED WHILE DECIDING THE ISSUE CANNOT BE RE- EVALUATED OR RE-APPRECIATED IN THE PROCEEDINGS U/S 254(2). HENCE, WE FIND THAT EXCEPT SOME MINOR OBSERVATIONS WHICH ARE MODIFIED AS DISCUSSED ABOVE, NO APPARENT MISTAKE ON RECORD HAS BEEN MADE OUT IN THE MISCELLANEOUS APPLICATION. 10. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ORDER PR ORDER PR ORDER PRONOUNCEMENT ONOUNCEMENT ONOUNCEMENT ONOUNCEMENT ON ONON ON 4 4 4 4 TH THTH TH OCTOBER OCTOBER OCTOBER OCTOBER 2013 2013 2013 2013 SD/- SD/- (P. M. JAGTAP) ACCOUNTANT MEMBER (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI: DATED: 4 TH OCTOBER 2013 SUBODH. COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI