GlaxoSmithKline Asia (P) Ltd., Gurgaon V. ACIT, Chandigarh

MA 137/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6522 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 05-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Assessee Lawyers: SHRI ABHISHEK AGGARWAL
• Keywords: Revenue expenditure
• Section: 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A. NO. 137/CHD/2019 IN ITA NO. 1323/CHD/2012 / ASSESSMENT YEAR : 2003-04 ( DECIDED VIDE ORDER 28.09.2018) GLAXOSMITHKLINE ASIA PVT LTD., DLF PLAZA TOWERS, DLF CITY, PHASE-1, GURGAON THE ACIT, CIRCLE -4(1) , CHANDIGARH ./PAN NO: AABCS3237R APPELLANT /RESPONDENT /ASSESSEE BY : SHRI NEERAJ JAIN, ADVOCATE & SHRI SHRI ABHISHEK AGGARWAL, ADVOCATE / REVENUE BY : SHRI ARVIND SUDERSHAN, SR.DR ! ' # /DATE OF HEARING : 20.12.2019 $%&' # / DATE OF PRONOUNCEMENT : 28.01.2020 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THIS MISC. APPLICATION DATED 21.08.2019 HAS BEEN MO VED BY THE ASSESSEE-APPLICANT PLEADING THAT A MISTAKE APPARENT ON RECORD HAS OCCURRED IN THE ORDER OF THE TRIBUNAL DATED 28.09.2018 PASSE D IN ITA NO.1323/CHD/2012. M.A. NO. 137/CHD/2019 GLAXOSMITHKLINE ASIA PVT LTD., GURGAON 2 2. THE APPLICATION OF THE ASSESSEE IS BARRED BY LIM ITATION PERIOD OF 158 DAYS. A SEPARATE APPLICATION FOR CONDONATION OF DEL AY HAS ALSO BEEN FILED. IN THE PRESENT APPLICATION, ASSESSEE HAS PLEADED THAT HE HAD PREFERRED APPEAL IN ITA NO 1323/CHD/2012 BEFORE THE TRIBUNAL AGITATING THE ACTION OF THE LOWER AUTHORITIES IN DISALLOWING THE WRITE OFF OF STOCK O F AQUAFRESH TOOTHPASTE AMOUNTING TO RS. 438.20 LACS AND WRITTEN OFF OF STO RES AND SPARES OF RS. 22.29 LACS. THE DISALLOWANCE WAS MADE ON THE GROUND THAT THE AFORESAID LOSS / STOCK WRITTEN OFF WAS TREATED AS CAPITAL EXPENDI TURE BY THE LOWER AUTHORITIES. HOWEVER, THE TRIBUNAL VIDE ORDER DATED 28.9.2018 WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE HELD THAT T HE SAME WAS TO BE TREATED AS REVENUE EXPENDITURE. THE TRIBUNAL WHILE HOLDING SO HAS DIRECTED AS UNDER:- 11. NOW COMING TO THE ISSUE WHETHER THIS EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE INDEE D OR NOT, THE MATTER WAS REFERRED BACK TO THE ASSESSI NG OFFICER TO EXAMINE THIS SPECIFIC ISSUE IN THE FIRST ROUND OF APPEAL BY THIS TRIBUNAL. THE ASSESSEE COUL D ESTABLISH DOCUMENTARILY THE FACT OF DESTRUCTION OF THE OFF SHELVED PRODUCTS AND THE ASSESSING OFFICER HAS ABSOLUTELY NOT DISCUSSED THIS ISSUE TO PROVE ANYTHI NG CONTRA, WE HEREBY ALLOW THE APPEAL OF THE ASSESSEE ON THE ISSUE THAT THE VALUE OF THE GOODS DESTRUCTED BE TREATED AS REVENUE EXPENDITURE FOR THE YEAR IN APPEAL. THE ASSESSING OFFICER IS HEREBY DIRECTED TO DETERMINE THE ACTUAL COST INCURRED IN MANUFACTURING OF THE PRODUCT AND ALLOW THE AMOUNT ACCORDINGLY. M.A. NO. 137/CHD/2019 GLAXOSMITHKLINE ASIA PVT LTD., GURGAON 3 3. NOW THE PLEA OF THE ASSESSEE IS THAT IT WAS NEVE R DISPUTED BY THE ASSESSING OFFICER THAT THE STOCK WAS VALUED AT ITS COST IN THE BOOKS OF ACCOUNT. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT BECAUSE THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO DETERMINE THE ACT UAL COST INCURRED IN RESPECT OF THE AFORESAID STOCK AND SPARES, THEREFOR E, THE ASSESSING OFFICER HAD ISSUED NOTICES TO THE ASSESSEE TO PROVIDE VOLUM INOUS INFORMATION AND RECORDS I.E. INVOICES AND VOUCHERS AND OTHER OLD RE CORDS FOR DETERMINATION OF THE ACTUAL COST OF MANUFACTURING OF THE PRODUCTS . THAT THE DOCUMENTS, SUCH AS, INVOICES AND VOUCHERS AND THE OLD RECORDS WHICH WERE REQUIRED BY THE ASSESSING OFFICER TO BE SUBMITTED AFTER THE LAP SE OF 15 YEARS, ARE NOT AVAILABLE AT THIS STAGE WITH THE ASSESSEE. THAT IN VIEW THEREOF, IT IS IMPOSSIBLE FOR THE ASSESSING OFFICER TO GIVE EFFEC T TO THE ORDER OF THE TRIBUNAL AS DIRECTED VIDE PARAS 11 & 14 OF THE ORDE R OF THE TRIBUNAL DATED 28.9.2018. 4. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES, WE DO NOT FIND ANY MISTAKE IN THE ORDER OF THE TRIBUNAL. WHAT THE TRIBUNAL HAS DIRECTED TO THE ASSESSING OFFICER IS THAT THE COST INCURRED BY THE ASSESSEE ON THE MANUFACTURING OF STOCK AND SPARES, IS TO BE TREATE D AS REVENUE EXPENDITURE AND THE ASSESSING OFFICER TO ALLOW THE ACTUAL COST INCURRED IN MANUFACTURING OF THE PRODUCTS. THE ASSESSING OFFICER, TO IMPLEMEN T THE ORDER OF THE TRIBUNAL, MAY CALL THE RELEVANT RECORDS FROM THE AS SESSEE TO DETERMINE THE ACTUAL COST INCURRED AND THE ASSESSEE MAY SUBMIT TO THE ASSESSING OFFICER M.A. NO. 137/CHD/2019 GLAXOSMITHKLINE ASIA PVT LTD., GURGAON 4 THE RELEVANT RECORDS INCLUDING THE ACCOUNTS BOOK AN D ALSO MAY SUBMIT THAT SINCE THE ACCOUNTS OF THE ASSESSEE WERE DULY AUDIT ED AND INVENTORY WAS RECORDED AT THE COST OF THE GOODS OR AT NET REALIZA BLE VALUE, WHICHEVER IS LOWER AND THAT THE COST OF SUCH OBSOLETE STOCK AS R EPORTED IN THE AUDITED ACCOUNTS BE CONSIDERED AS THE ASSESSEE IS NOT POSSE SSED OF BILLS AND VOUCHERS AT THIS STAGE. THE TRIBUNAL WHILE DIRECTI NG THE ASSESSING OFFICER TO DETERMINE THE ACTUAL MANUFACTURING HAS NOT DIREC TED ABOUT ANY PARTICULAR MANNER IN WHICH THE ASSESSING OFFICER WILL DETERMIN E THE MANUFACTURING COST. THE ASSESSING OFFICER AS PER THE INFORMATION AVAILABLE FROM THE RECORD HAS TO DETERMINE THE MANUFACTURING COST INCLUDING T HE AUDITED ACCOUNTS OF THE ASSESSEE. SUBJECT TO THE ABOVE OBSERVATIONS, THE MISC. APPLIC ATION PREFERRED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2020. SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 28. 01. 2020 )) %* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ! . / CIT 4. ! . ( )/ THE CIT(A) 5. ,/0 1 , # 1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6' / GUARD FILE