Malayala manorama Co.Ltd, Kottayam V. ACIT, Kottayam

MA 28/COCH/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7694 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 10-02-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 16-08-2011
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: K I JOHN
• Keywords: Deemed dividend
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM M.P. NO. 28/COCH/2011 (ARSG. OUT OF I.T.A. NO. 531/COCH/2008) ASSESSMENT YEAR : 2001-02 M/S. MALAYALA MANORMA CO. LTD., K.K. ROAD, KOTTAYAM. [PAN:AAACT 7597G] VS. THE ADDITIONAL COMMISSIONER OF INCOME-TAX, KOTTAYAM. (ASSESSEE-APPELLANT) (ASSESSEE- RESPONDENT) ASSESSEE BY SHRI K.I. JOHN, CA REVENUE BY SMT. VIJAYAPRABHA, JR. DR. DATE OF HEARING 10/02/2012 DATE OF PRONOUNCEMENT 9 /03/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICA TION WITH THE PLEA THAT THERE ARE MISTAKES APPARENT FROM RECORD IN THE ORDER DATED 31 ST MAY, 2011 PASSED IN I.T.A. NO. 531/COCH/2008 RELATING TO THE ASSESSMENT YEAR 2001 -02. THE ASSESSEE HAS FILED THIS APPLICATION IN THE FORM OF AFFIDAVIT, WHEREIN THE A SSESSEE HAS STATED 23 POINTS DESCRIBING VARIOUS TYPES OF MISTAKES. 2. WE HAVE CAREFULLY CONSIDERED THE SAID AFFIDAVIT AND FOR THE SAKE OF CONVENIENCE OF DISPOSAL, WE HAVE GROUPED VARIOUS POINTS STATED IN THE AFFIDAVIT ISSUE WISE AS UNDER:- A) PARAGRAPH NUMBERED AS 1 TO 4 EXPLAIN THE VARIOUS MISTAKES IN BRIEF. M.P. NO. 28 /COCH/2011 2 B) IN PARAGRAPHS NUMBERED AS 5, 6 AND 12, IT IS STA TED THAT THE OBSERVATION OF THE TRIBUNAL THAT THE ISSUE OF ALLOCATION OF ADVERTISEM ENT INCOME FROM PUBLICATIONS OTHER THAN MALAYALA MANORMA DAILY (MMD) WAS NOT SPE CIFICALLY RAISED BEFORE THE LD. CIT(A) IS AGAINST THE FACTS AVAILABLE ON RECORD . C) IN PARAGRAPHS NUMBERED AS 7 TO 11, 13 TO 19, IT IS STATED THAT THE TRIBUNAL FAILED TO FOLLOW THE BINDING DECISION OF THE HONBLE KERA LA HIGH COURT IN THE ASSESSEES OWN CASE REPORTED IN 257 ITR 633 WHILE DEALING WITH THE ISSUE OF BASIS OF ALLOCATION OF ADVERTISEMENT REVENUE BETWEEN VARIOUS UNITS. D) IN PARAGRAPHS NUMBERED AS 20 & 21, IT IS STATED THAT THE ASSESSEE WAS NOT GIVEN NOTICE OF THE TWO DECISIONS RELIED UPON BY THE TRI BUNAL IN PARA 7.4 OF ITS ORDER AND IT IS FURTHER STATED THAT THE TRIBUNAL HAS NOT CONS IDERED THE CONTENTION OF THE ASSESSEE AS FURNISHED IN THE SUMMARY OF ARGUMENTS , WHILE DEALING WITH THE ISSUE OF DISALLOWANCE OF PROMOTIONAL EXPENSES. E) IN PARAGRAPH NUMBERED AS 22, IT IS STATED THAT T HE ISSUE OF DEEMED DIVIDEND IS COVERED BY THE ORDER OF THE TRIBUNAL FOR THE ASSESS MENT YEAR 1995-96 AND HENCE THE TRIBUNAL SHOULD HAVE FOLLOWED THE SAID DECISION . 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RECORD. IN ORDER TO UNDERSTAND THE ISSUES STATED IN PARA 2(B) AND 2(C) SUPRA, IT IS NECESSARY TO STATE THE FACTS RELATING TO THE SAME IN BRIEF. THE ASSESSEE HAS CL AIMED DEDUCTION U/S. 80-IB OF THE ACT DURING THE YEAR UNDER CONSIDERATION. DURING THE CO URSE OF ASSESSMENT PROCEEDING, THE AO VERIFIED THE WORKINGS WITH REGARD TO THE SAID DE DUCTION AND DID NOT AGREE WITH THE METHOD FOLLOWED BY THE ASSESSEE FOR COMPUTING THE D EDUCTION U/S. 80-IB OF THE ACT. THE AO DID NOT AGREE WITH THE ASSESSEE IN RESPECT OF TH E FOLLOWING ITEMS:- A) THE ASSESSEE IS BRINGING OUT VARIOUS TYPES OF PU BLICATIONS, OUT OF WHICH THE MMD IS HAVING HUGE CIRCULATION. THE PRINTING UNITS ARE LOCATED IN VARIOUS PLACES. IN THE ASSESSMENT ORDER, THE PUBLICATIONS ARE GROUP ED INTO TWO CATEGORIES, VIZ., M.P. NO. 28 /COCH/2011 3 MMD AND OTHER PUBLICATIONS. IT WAS NOTICED THAT TH E ASSESSEE HAS FOLLOWED THE METHOD OF ALLOCATING THE ENTIRE ADVERTISEMENT REVE NUE OF ALL PUBLICATIONS ON THE BASIS OF CIRCULATION FIGURES OF MMD ALONE, THAT TOO ON THE BASIS OF CIRCULATION FIGURES CERTIFIED BY THE AUDIT BUREAU OF CIRCULATIO NS (ABC). B) THOUGH THE ASSESSEE HAS ACCOUNTED FOR THE EN TIRE EXPENDITURE OF PRINTING AND DISTRIBUTION OF OTHER PUBLICATIONS (OTHER THAN MMD) AT ITS KOTTAYAM UNIT, YET IT PREFERRED TO ALLOCATE THE ADVERTISEMENT REVENUE REA LISED FROM OTHER PUBLICATIONS ON THE BASIS OF ABC CERTIFIED FIGURES OF MMD. THE AO NOTICED THAT THE METHOD ADOPTED BY THE ASSES SEE FOR ALLOCATING THE ADVERTISEMENT REVENUE, WHICH IS STATED ABOVE, ENABLED THE ASSESSE E TO SHOW MORE PROFITS IN THE UNITS IN WHICH IT CLAIMED DEDUCTION U/S 80IB OF THE ACT. HE NCE, THE AO CHOSE TO ALLOCATE THE ADVERTISEMENT INCOME OF MMD ON THE BASIS OF ACTUAL SALES FIGURES OF PUBLICATIONS AS RECORDED IN ITS BOOKS OF ACCOUNT AND NOT ON THE BAS IS OF CIRCULATION FIGURES CERTIFIED BY THE ABC. THE AO ALSO ALLOCATED THE ADVERTISEMENT INCOME OF OTHER PUBLICATIONS TO THE KOTTAYAM UNIT ONLY AS THE RELEVANT EXPENDITURE HAD BEEN ACCOUNTED FOR THERE. 4. WHEN THESE ISSUES REACHED THE ITAT, THE TRIB UNAL NOTICED THAT THE VARIOUS POINTS AGITATED BY THE ASSESSEE ARE RELATED TO ONLY TWO IS SUES. HOWEVER, THE TRIBUNAL NOTICED THAT THE ASSESSEE HAS NOT AGITATED ONE OF THE TWO P OINTS, VIZ., POINT (A), INFRA. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSER VATIONS MADE BY THE TRIBUNAL IN THIS REGARD. 5.1 ON MERITS, THE TWO POINTS OF DISPUTE, AS PRO JECTED PER THE CLARIFICATION NOTE; ARE AS UNDER:- (A) THE NON-ALLOCATION OF THE ADVERTISEMENT INCOME OF PUBLICATIONS OTHER THAN MMD, WHICH HAS BEEN CONSIDERED BY THE A O AS ONLY TOWARD THE KOTTAYAM UNIT. (B) THE ALLOCATION OF THE ADVERTISEMENT REVENUE FRO M MMD ON THE BASIS OF SALES RATIO, FURTHER ADJUSTED FOR ADVERTISEMENT RATES. M.P. NO. 28 /COCH/2011 4 5.2 WE SHALL TAKE UP BOTH THE ISSUES. AS REGA RDS THE FIRST, WE FIND NO ADJUDICATION BY THE LD. CIT(A) THEREON. IN FACT, T HE SAME WAS NOT SPECIFICALLY RAISED BEFORE HER, NOR DOES IT FIND M ENTION IN THE STATEMENT OF FACTS OR EVEN THE ARGUMENT NOTE (PB PGS. 55 TO 65) BEFORE THE SAID AUTHORITY. LIKEWISE, NEITHER ANY SPECIFIC GROUND HAS BEEN RAISED IN ITS RESPECT BEFORE US NOR ANY PLEA RAISED IN ITS RESPECT, SO THAT THERE WAS, ACCORDINGLY, NO HEARING IN THE MATTER. IN FACT, THIS ASPECT ALSO DOES NOT FIND MENTION IN THE SUMMARY OF ARGUM ENTS, AND HAS ONLY BEEN INSERTED IN THE CLARIFICATION NOTE (SUPRA ) FILED AT THE TIME OF HEARING ON SOME CLARIFICATIONS SOUGHT BY THE BENCH QUA THE SECOND (B) ISSUE. AS SUCH, THE SAME CAN NEITHER BE SAID TO BE DISPUTED NOR IS ITS RAISING THUS, MAINTAINABLE. WE DECIDE ACCORDINGLY . 5. THE ASSESSEE IS OF THE VIEW THAT THE OBSERV ATIONS MADE BY THE TRIBUNAL IN PARA 5.2 OF ITS ORDER, EXTRACTED SUPRA, IS AGAINST THE FACTS. IN THIS MISCELLANEOUS APPLICATION, IT IS CONTENDED BY THE ASSESSEE THAT IT HAS RAISED THE IS SUE (A), EXTRACTED SUPRA. THE RELEVANT SUBMISSIONS MADE IN THE AFFIDAVIT ARE EXTRACTED BEL OW, FOR THE SAKE OF CONVENIENCE:- 6. IT IS RESPECTFULLY SUBMITTED THAT THE OBSERVAT IONS IN PARA 5.2 IS A MISTAKE AS IS EVIDENCED BY PARAS 7 TO 13 OF THE ORD ER OF THE CIT(A) DEALING WITH THE SPECIFIC ISSUES, THE STATEMENT OF FACTS AND THE JUDGMENTS REFERRED TO AT PAGES 48 TO 51 OF THE PAP ER BOOK, THE GROUNDS OF APPEAL BEFORE THE CIT(A) NAMELY GROUND NUMBERS 2 TO 4 AT PAGES 53 TO 55 OF THE PAPER BOOK, THE ARGUMENT NOTE ELABORATELY DEALING WITH IT AT PAGE 55 TO 61 OF THE PAPER BOOK, THE SPECIFIC GROUNDS RAISED IN THE RESPECT BEFORE THE HONBLE TRIBUNAL N AMELY GROUND NOS. 2, 3 AND 4 AND THE FIRST ARGUMENT NOTE FILED BEFORE THE TRIBUNAL. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS M ADE BY THE ASSESSEE, WHICH ARE EXTRACTED IN THE PRECEDING PARAGRAPH AND ALSO GONE THROUGH THE DOCUMENTS REFERRED BY IT. WE FIND THAT THE DISCUSSIONS/ SUBMISSIONS MADE IN T HOSE DOCUMENTS RELATED TO THE METHOD OF ALLOCATION OF ADVERTISEMENT REVENUE ONLY. WE DO NOT FIND ANY GROUND/DISCUSSION/GRIEVANCE ABOUT THE ACTION OF THE AO IN ALLOCATING THE ADVERTISEMENT REVENUE OF OTHER PUBLICATIONS ENTIRELY TO THE KOTTA YAM UNIT. HENCE, THERE APPEARS NO MISTAKE IN THE OBSERVATIONS OF THE TRIBUNAL IN PARA 5.2 OF ITS ORDER. BEFORE US, THE LD A.R SUBMITTED THAT THE TRIBUNAL HAS FAILED TO FOLLOW TH E DECISION OF HONBLE KERALA HIGH COURT IN THE ASSESSEES OWN CASE REFERRED SUPRA. HE FURTHER SUBMITTED THAT THE TRIBUNAL M.P. NO. 28 /COCH/2011 5 HAS FAILED TO FOLLOW ITS OWN ORDER PASSED IN THE HA NDS OF THE ASSESSEE FOR ASSESSMENT YEAR 2002-03. 7. WE SHALL FIRST TAKE UP THE CLAIM RELATING TO THE NON-CONSIDERATION OF JURISDICTIONAL HIGH COURTS DECISION IN THE ASSESSEES OWN CASE. HOWEVER, ON A CAREFUL READING OF THE IMPUGNED ORDER OF THE TRIBUNAL, WE FIND THAT THE TR IBUNAL HAS CONSIDERED THE SAID DECISION IN MORE THAN ONE PLACE. WE FIND DISCUSSIO NS IN THIS REGARD IN PARAGRAPH NO.4.2, 5.5 AND 5.7. THE TRIBUNAL, AFTER CONSIDERING THE N ET EFFECT OF THE SAID DECISION OF JURISDICTIONAL HIGH COURT, HAS TAKEN THE VIEW THAT THE SAME IS SUPPORTING THE CASE OF REVENUE. 8. IT IS ALSO PERTINENT TO MENTION HERE THAT THE LD A.R, DURING THE COURSE OF ARGUMENTS, FAIRLY CONCEDED THAT THE ISSUE BEFORE THE HONBLE K ERALA HIGH COURT IN THE CASE REPORTED IN 257 ITR 633 RELATED TO THE VALIDITY OF GIVING WE IGHTAGE TO VARIOUS UNITS, WHICH IS NOT THE ISSUE FOR THE YEAR UNDER CONSIDERATION. HOWEVE R, HE SUBMITTED THAT THE AO SHOULD HAVE FOLLOWED THE SAID DECISION IN ORDER TO MAINTAI N CONSISTENCY. IT IS PERTINENT TO MENTION HERE THAT IT IS A SETTLED PROPOSITION OF LA W THAT THE TRIBUNAL IS NOT ENTITLED TO REVIEW ITS ORDER IN THE PROCEEDINGS CARRIED U/S 254 (2) OF THE ACT. SINCE THE TRIBUNAL HAS DULY CONSIDERED THE DECISION OF JURISDICTIONAL HIGH COURT AND HAS TAKEN A PARTICULAR VIEW OF THE SAME, WE DO NOT FIND MERIT IN THE CLAIM OF T HE ASSESSEE. THE PARTICULAR VIEW TAKEN BY THE TRIBUNAL CANNOT BE CONSIDERED AS MISTAKE APP ARENT FROM RECORD. HENCE, WE ARE UNABLE TO AGREE WITH THE CONTENTIONS OF THE ASSESSE E IN THIS REGARD. 9. THE NEXT SUBMISSION OF LD A.R IS THAT THE TR IBUNAL HAS NOT CONSIDERED ITS OWN DECISION RENDERED IN THE ASSESSEES HAND FOR ASSESS MENT YEAR 2002-03. THOUGH THE SAID DECISION IS FINDING PLACE IN THE PAPER BOOK FILED B Y THE ASSESSEE, YET IT IS NOT BORNE OUT OF RECORD AS TO WHETHER THE ASSESSEE HAS POINTED OUT T HE SAID DECISION TO THE BENCH. WE SAY SO FOR THE REASON THAT THE TRIBUNAL, IN PARAGRAPH 5 .4 OF ITS ORDER, HAS ONLY REFERRED TO THE ORDERS RELATING TO THE ASSESSMENT YEAR 2000-01AND 2 003-04. BE THAT AS IT MAY, WE NOTICE THAT THE TRIBUNAL HAS FOLLOWED THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN M.P. NO. 28 /COCH/2011 6 ASSESSMENT YEAR 2002-03, WHICH HAS SINCE BEEN DISTI NGUISHED IN THE INSTANT CASE. HENCE, WE DO NOT FIND ANY MISTAKE IN THE IMPUGNED ORDER IN NOT CONSIDERING THE ORDER PASSED FOR ASSESSMENT YEAR 2002-03. 10. THE NEXT MISTAKE POINTED OUT BY THE ASSESSEE R ELATES TO THE DISALLOWANCE OF PROMOTIONAL EXPENSES. WE NOTICE THAT THE TRIBUNAL HAS REFERRED THE TWO CASE LAW, VIZ., CIT VS. TRANSPORT CORPORATION OF INDIA LTD (256 ITR 701 (AP)) AND CIT VS. RAM BAHADUR THAKUR LTD (261 ITR 388 (KER)(FB)) IN PARA 7.4 OF ITS ORDER ONLY TO EXPLAIN THE LEGAL PRINCIPLES CONCERNING THE ISSUE. FURTHER, WE ARE OF THE VIEW THAT ONE CANNOT EXPECT THE TRIBUNAL OR COURT TO RECORD EACH AND EVERY CONT ENTION OF THE ASSESSEE AND GIVE REPLY TO THE SAME. 11. THE LAST MISTAKE POINTED OUT RELATED TO TH E ISSUE OF DEEMED DIVIDEND. IT IS CONTENDED THAT THE SAID ISSUE IS COVERED BY THE TRI BUNALS ORDER IN THE EARLIER YEARS. HOWEVER, WE NOTICE THAT THE TRIBUNAL HAS SET ASIDE THE ISSUE OF DEEMED DIVIDEND TO THE FILE OF THE AO, AS THERE WAS DEFICIENCY IN HIS ENQU IRY WITH REGARD TO CERTAIN FACTUAL ASPECTS. IT IS WELL SETTLED PROPOSITION OF LAW THA T THE EARLIER DECISION OF TRIBUNAL IS BINDING ONLY IF THERE IS PARITY OF FACTS BETWEEN TH E TWO CASES. IN THE INSTANT YEAR, SINCE THE TRIBUNAL HAS CONSIDERED IT NECESSARY TO EXAMINE CERTAIN FACTUAL ASPECTS, THE SAID ISSUE WAS SET ASIDE. HENCE, THE SAID VIEW OF THE TRIBUNA L CANNOT BE CONSIDERED, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS A MISTAKE APPARENT FR OM RECORD. 12. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 9-03-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 9TH MARCH, 2012 GJ COPY TO: M.P. NO. 28 /COCH/2011 7 1. M/S. MALAYALA MANORMA CO. LTD., K.K. ROAD, KOTTA YAM 2. THE ADDITIONAL COMMISSIONER OF INCOME-TAX, KOTTA YAM.. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN