DCIT, Circle 16(1), Hyderabad V. M/s Neuland Labs Ltd., Hyderabad

MA 180/HYD/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7234 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 19-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T DEWAKAR PRASAD
• Assessee Lawyers: SADASIVA
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYA RAGHAVAN, JUDICIAL MEMBER MA NO.180/HYD/2010 IN ITA NO.1142/HYD/2003 ASSESSMENT YEAR 2000-2001 THE DCIT, CIRCLE 16(1), HYDERABAD VS M/S NEULAND LABORATORIES LIMITED, HYDERABAD (PAN AAACN9531 E) APPELLANT RESPONDENT APPELLANT BY : SHRI T. DEWAKAR PRASAD RESPONDENT BY : S/SHRI SADASIVA & ANIL KUMAR DATE OF HEARING : 30.9.2011 DATE OF PRONOUNCEMENT : 13.10.2011 ORDER ORDER ORDER ORDER PER PER PER PER ASHA VIJAYA RAGHAVAN, J.M. ASHA VIJAYA RAGHAVAN, J.M. ASHA VIJAYA RAGHAVAN, J.M. ASHA VIJAYA RAGHAVAN, J.M. THE DEPARTMENT HAS FILED THE MA AGAINST THE ORDER O F THE TRIBUNAL IN ITA NO.1142/H/2003. 2. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED AS FOLLOWS: 3. THE CIT(A) HAS PASSED ORIGINALLY ORDER IN THE SA ME CASE FOR AY 2000-01 ON 12.8.2003 WHEREIN IN REGARD TO ONE OF THE ISSUES VIZ., LAPSE OF ADVANCE LICENCES W HICH WERE WRITTEN OFF TO THE TUNE OF RS.5,41,72,000/- HA D HELD THAT THE ASSESSING OFFICER COULD DISALLOW RS.2,14,7 0,685/- ONLY IN RESPECT OF THESE ADVANCE LICENCES SINCE THE IR EXTENDED VALIDITY/ORIGINAL VALIDITY PERIOD DID NOT EXPIRE MA NO.180 OF 2010 IN ITA NO.1142 OF 2010 M/S NEULAND LABORATORIES LTD., HYD. 2 BY THE ASSESSMENT YEAR 2000-01. ACCORDING TO CIT(A ), THE VALIDITY PERIOD OF THE LICENCES EXPIRED IN ASSE SSMENT YEAR 1999-2000 IN RESPECT OF LICENCE NO.8487 AND IN AY 2001-02 IN RESPECT OF THE OTHER TWO LICENCES NOS. 9 001557 AND 9001738. 4. THIS ORDER OF THE CIT(A) WAS CHALLENGED BEFORE T HE ITAT BY THE DEPARTMENT UNSUCCESSFULLY. ONE OF THE GROUNDS OF APPEAL, WHICH IS REPRODUCED BELOW WAS RELATED TO THE ISSUE OF LAPSE OF ADVANCE LICENCES AND ALSO TO THE ISSUE OF MODVAT CREDIT. THE GROUND NO.3 I S REPRODUCED BELOW: THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE TRADING LOSS IS ALLOWABLE ONLY IN THE YEAR IN WHICH IT IS INCURRED SINCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. 5. WHILE ADJUDICATING ON THE ABOVE GROUND THE HON BLE ITAT IN ITS ORDER IN ITA NO.1142/HYD/2003 DATED 20.4.2007 HAS CONSIDERED THE ISSUES RELATING TO LA PSE OF MODVAT CREDIT ALONE AND HAS NOT CONSIDERED THE ISS UE RELATING TO LAPSE OF ADVANCES LINCENCES. 6. THE GROUND OF APPEAL IS ALSO ON THE ISSUE OF L APSE OF ADVANCED LICENCES AND NOT DIRECTED TOWARDS THE ONL Y ISSUE OF LAPSE OF MODVAT CREDIT. 7. IN VIEW OF THE ABOVE, THIS MISCELLANEOUS APPLI CATION IS SUBMITTED TO HONBLE ITAT WITH A PRAYER TO CONSI DER THE SUBSTANTIVE ISSUE OF ALLOWABILITY OF LAPSE ADV ANCE MA NO.180 OF 2010 IN ITA NO.1142 OF 2010 M/S NEULAND LABORATORIES LTD., HYD. 3 LICENCES IN ITS TOTALITY OF FACTS WHICH HAS NOT BE EN DONE IN ITS ITA NO.1142/HYD/2003. 3. THE LEARNED COUNSEL FOR THE ASSESSEE S/SHRI. SA DASIVA & M.V. ANIL KUMAR PRODUCED A COPY OF THE ORDER OF THI S TRIBUNAL IN ITA NO.373/H/2004 FOR THE ASSESSMENT YEAR 2000- 01 IN THE ASSESSEES CASE WHERE THE DEPARTMENT WAS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) DATED 5.2. 2004 FOR THE ASSESSMENT YEAR 2000-01 PASSED U/S 154 OF THE ACT, 1961. THE GRIEVANCE OF THE DEPARTMENT WAS THAT THE CIT(A) HAS ERRONEOUSLY GRANTED RELIEF ON ACCOUNT OF LAPSE OF ADVANCE LICENSES AND INSTEAD SHOULD HAVE HELD THAT THE TRA DING LOSS IS ALLOWABLE ONLY IN THE YEAR IN WHICH IT IS INCURRED. THE TRIBUNAL HAS DISMISSED THE DEPARTMENTS APPEAL. HENCE WE AR E OF THE OPINION THAT SINCE THE ISSUE HAS ALREADY BEEN DECID ED BY THE TRIBUNAL IN ITA NO.373/H/2004, THE TRIBUNAL IN ITA NO.1142/H/2003 DATED 20/4/2007 FOR THE ASSESSMENT Y EAR 2000- 01 HAS DELIBERATELY NOT CONSIDERED THE ISSUE RELATI NG TO LAPSE OF ADVANCE LICENCES. THEREFORE, WE ARE OF THE VIEW T HAT THE MA IS MISCONCEIVED AND ACCORDINGLY, WE DISMISS THE MA FIL ED BY THE DEPT. 4. IN THE RESULT, THE MA FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 13 .10.2011 S SS SD/ D/D/ D/- -- - ( (( (CHANDRA POOJARI) CHANDRA POOJARI) CHANDRA POOJARI) CHANDRA POOJARI) S SS SD/ D/D/ D/- -- - (ASHA VIJAYA RAGHAVAN) (ASHA VIJAYA RAGHAVAN) (ASHA VIJAYA RAGHAVAN) (ASHA VIJAYA RAGHAVAN) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED THE 13 TH OCTOBER, 2011 MA NO.180 OF 2010 IN ITA NO.1142 OF 2010 M/S NEULAND LABORATORIES LTD., HYD. 4 COPY FORWARDED TO: 1. THE DCIT, CIRCLE 16(1), HYDERABAD 2. M/S NEULAND LABORATORIES LTD., HYDERABAD 3. THE CIT- CIRCLE 2(4), HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/