Wintex Mills Pvt.Ltd., Surat V. The Income Tax Officer, Ward-4(4), Surat

MA 20/SRT/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4768 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RECALLING OF
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER MA NO.20/SRT/2019 IN ITA NO.622/AHD/2015 FOR AY.2010-11 ( VIRTUAL HEARING) WINTEX MILLS PVT. LTD., PLOT NO.201/202/203, GIDC, PANDESARA, SURAT 394 221. PAN : AAACW 2128 A VS THE INCOME TAX OFFICER, WARD-4(4), SURAT. APPLICANT RESPONDENT ASSESSEE BY SH. HIREN VEPARI - CA/ AR REVENUE BY MISS ANUPMA SINGHLA-SR. DR DATE OF HEARING 05.02.2021 DATE OF PRONOUNCEMENT 0 9 .02.2021 ORDER UNDER SECTION 254(2) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS MISCELLANEOUS APPLICATIONS (MA) IS FILED BY THE ASSESSEE FOR RECALLING OF THE ORDER DATED 11.01.2019 IN ITA NO.622/AHD/2015. THE LEARNED AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE SUBMITS THAT IN GROUND NO.1 OF THE APPEAL, THE ASSESSEE CONTESTED ABOUT THE CLAIM OF WRITE-OFF OF RS.16.47 LAKHS BEING PAID TO SURAT MUNICIPAL CORPORATION (SMC) OF RS.10 LAKHS TO PANDESARA GREEN ENVIRONMENT & WATER WELFARE CO-OP. SOCIETY LTD., IN EARLIER YEARS. THE ASSESSEE BROUGHT THE ATTENTION OF THE BENCH ON PAGE NO.2 TO 6 OF PAPER BOOK WHEREIN PARTICULARS OF SEQUENCE OF EVENTS HAVE BEEN SHOWN THAT BOTH THE AMOUNTS WERE DISPUTED WITH SURAT MUNICIPAL CORPORATION AS WELL AS MA NO.20/SRT/2019 IN ITA NO.622/AHD/2015 WINTEX MILLS PVT. LTD., (AY 2010-11) 2 WITH PANDESARA GREEN ENVIRONMENT & WATER WELFARE CO-OP SOCIETY. THE AUTHORISED REPRESENTATIVE FURTHER INVITED OUR ATTENTION ON PAGE NO.22 OF THE PAPER BOOK, WHEREIN IN PARA 6 OF SUBMISSION FILED BEFORE THE ITO/ASSESSING OFFICER VIDE LETTER DATED 27.12.2013, THE ASSESSEE EXTRACTED NOTE NO.2 OF SCHEDULE 14 OF AUDIT REPORT IN RESPECT OF CONTINGENT LIABILITY OF RS.27,56,571/- THAT SURAT MUNICIPAL CORPORATION (SMC), SMC ISSUED THE TAX BILL OF RS.30.34 LAKHS, WHEREIN IT HAD RAISED EARLIER DEMAND, ACCORDING TO ASSESSEE THERE IS NO OUTSTANDING ERRORS/DEMAND. THE ASSESSEE ALSO REFERRED DETAILS OF VARIOUS LITIGATIONS FILED BY ASSESSEE CONTESTING THE DEMAND OF HOUSE TAX. 2. THE LD.AR FOR THE ASSESSEE FURTHER SUBMITS THAT WRITE-OFF CAN TAKE PLACE ONLY IF ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING THAT IS WHY, ANY ADVANCE OR DEPOSIT MADE REMAIN OUTSTANDING IN THE BALANCE SHEET AND ON THE POINT OF ACCRUAL THAT SUCH ADVANCE OR DEPOSIT ARE WRITTEN OFF, LIKE BAD DEBT WHICH RELATES TO PREVIOUS YEARS. ON THIS ANALOGY, IT WAS SUBMITTED THAT QUESTION OF CLASSIFYING CONTINGENT LIABILITY COMES ONLY AS PER ACCOUNTING STANDARD-4 ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA(ICAI) IN CASE OF MERCANTILE SYSTEM OF ACCOUNTING. THE LD.AR FOR THE ASSESSEE FURTHER SUBMITS THAT WHILE DISMISSING THE MA NO.20/SRT/2019 IN ITA NO.622/AHD/2015 WINTEX MILLS PVT. LTD., (AY 2010-11) 3 APPEAL OF ASSESSEE, TRIBUNAL IN PARA 7 AND 13, WITHOUT APPRECIATING THE NATURE OF WRITE-OFF AND MENTION OF CONTINGENT LIABILITY AND INCORRECTLY HELD THAT LIABILITY WAS CRYSTALIZED IN EARLIER YEARS. THE LD.AR FOR THE ASSESSEE SUBMITS THAT FINDING OF THE BENCH IS CONTRARY TO THE EVIDENCE AVAILABLE ON RECORD AND MISTAKE APPARENT IN THE ORDER. THE LD.AR FOR THE ASSESSEE PRAYED FOR RECALLING THE ORDER AND TO FIX THE APPEAL FOR HEARING AFRESH. 3. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SUBMITS THAT THERE IS NO MISTAKE APPARENT IN THE ORDER DATED 11.01.2019 WHICH CAN BE CLASSIFIED AS MISTAKE APPARENT. THE LD.AR FOR THE ASSESSEE HAS NOT DISPUTED, WHILE MAKING HIS SUBMISSION THAT HIS SUBMISSION IS NOT CORRECTLY RECORDED IN PARA 6 OF THIS ORDER. THE LD.AR FOR THE ASSESSEE, AS PER HIS SUBMISSION SUBMITTED THAT ASSESSEE WAS ADVISED TO MAKE THE PAYMENT OF RS.16.49 LAKHS AGAINST THE DEMAND RAISED AND THE ISSUE WAS NOT LIKELY TO RESOLVE SOON AND THEY WERE NOT EXPECTED ANY REFUND FROM THE SMC AND WRITE-OFF ACCORDINGLY, THUS, THE LIABILITY WAS CLEARLY CRYSTALIZED. FOR RS.10 LAKHS, THE ASSESSEE CLAIMED THAT CONTRIBUTION WAS MADE IN EARLIER YEARS, AS RECORDED IN PARA 11 OF THE ORDER. THE LD.DR FOR THE REVENUE SUBMITS THAT THE MA NO.20/SRT/2019 IN ITA NO.622/AHD/2015 WINTEX MILLS PVT. LTD., (AY 2010-11) 4 ASSESSEE IS SEEKING REVIEW OF THE ORDER WHICH IS BEYOND THE SCOPE OF PROVISION OF SECTION 254(2) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE ORDER DATED 11.01.2019. WE HAVE NOTED THAT IN PARA 6 AND 11 OF THE ORDER, THE SUBMISSION OF AUTHORISED REPRESENTATIVE OF THE ASSESSEE IS CATEGORICALLY RECORDED. THE LD.AR FOR ASSESSEE, NEITHER IN MISCELLANEOUS APPLICATION NOR DURING THE SUBMISSION DISPUTED THAT HIS SUBMISSIONS ARE NOT CORRECTLY CORRECTED BY OUR PREDECESSOR. OUR PREDECESSOR AFTER CONSIDERING THE CONTENTION OF LD.AR OF THE ASSESSEE AND CLEARLY, WITH REGARD TO WRITE-OFF OF AMOUNT OF RS.16.47 LAKHS TAX CLEARLY HELD AS PAID IN EARLIER YEARS AND LIABILITY HAS ALSO BEEN CRYSTALIZED. THEREFORE, THE PAYMENT PERTAINING TO EARLIER YEARS CANNOT BE ALLOWED ON THE BASIS OF RESOLUTION ONLY. SIMILARLY, IN PARA 11 OF THE ORDER WITH REGARD TO DISALLOWANCES OF RS.10 LAKHS TO PANDESARA GREEN ENVIRONMENT & WATER WELFARE CO-OP SOCIETY THAT ASSESSEE PAID RS.4.3 LAKHS DURING THE YEAR AND RS.10 LAKHS WAS PAID IN EARLIER YEARS, IT WAS NOT CLAIMED AS TAKEN AND SAME HAS BEEN CLAIMED BY JOINT VENTURE ENTRY ON 01.04.2009 FOR CONTRIBUTION MADE IN EARLIER YEARS. SIMILARLY, FOR RS.10 LAKHS, IT WAS HELD THAT LIABILITY WAS CRYSTALIZED IN EARLIER YEARS AND PAID IN THE EARLIER YEARS. THEREFORE, WE FIND THAT OUR PREDECESSOR MA NO.20/SRT/2019 IN ITA NO.622/AHD/2015 WINTEX MILLS PVT. LTD., (AY 2010-11) 5 PASSED THE ORDER AFTER CONSIDERING THE CONTENTION OF ASSESSEE AND EVIDENCE AVAILABLE ON RECORD, THUS, WE DO NOT FIND ANY MISTAKE WHICH CAN BE CLASSIFIED AS A MISTAKE APPARENT ON RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. HENCE, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 9 TH FEBRUARY 2021 BY PLACING RESULT ON THE NOTICE BOARD. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 9 TH FEBRUARY 2021/#SGR COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT