ASSOCIATED ALUMINIUM INDUSTRIAL P.LTD, V. ASST CIT 6(1),

MA 304/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6667 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 27-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER M.A.NO.304/MUM/2011 A.Y 2005-06 (ARISING OUT OF I.T.A.NO.4726-M-09) ASSOCIATED ALUMINIUM IND. PVT. LTD., B 1, TULSI VIHAR, DR. A. B. ROAD, WORLI, MUMBAI 400 018 PAN: AAACA 4473 G VS. ASST. COMMISSIONER OF I.T. 6(1), MUMBAI. (APPLICANT) (RESPONDENT) APPLICANT BY : MR. SAMEER DALAL. RESPONDENT BY : MR. C.G.K.NAIR. O R D E R PER T.R.SOOD, AM: THROUGH THIS MISCELLANEOUS APPLICATION ASSESSEE HA S POINTED OUT TWO ERRORS HAVE CREPT INTO THE ORDER OF THE TRIBUNA L IN I.T.A.NO.4726- M-09. 2. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT T HE FIRST ERROR IS REGARDING THE ASSESSMENT YEAR WHICH HAS BEEN MENTIO NED AS 2006- 07 IN THE ORDER OF THE TRIBUNAL, WHEREAS REVENUES APPEAL WAS FOR A.Y 2005-06 AND HE ALSO REFERRED TO THE ASSESSMENT OR DER AND APPELLATE ORDER. 3. ON THE OTHER HAND, LD. DR HAS NO OBJECTION IF TH E ASSESSMENT YEAR IS CORRECTED IN THE ORDER. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT ASSESSMENT YEAR HAS BEEN INADVERTENTLY WRONGLY MENTIONED IN TH E ORDER OF THE TRIBUNAL IN I.T.A.NO.4726-M-09 AS A.Y 2006-07 WHE REAS AS PER MA NO.304/M/11 2 RECORDS AND ASSESSMENT ORDER THE SAME IS 2005-06. THEREFORE, WE RECTIFY THE MISTAKE AND THE ASSESSMENT YEAR MENTION ED IN THE ORDER OF THE TRIBUNAL SHOULD BE READ AS 2005-06. 5. THE LD. COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THAT SECOND ERROR IS IN RESPECT OF ALLOWANCE OF DEDUCTION U/S.8 0IB PERTAINING TO L/C DISCOUNTING CHARGES. HE SUBMITTED THAT SIMILAR DEDU CTION WAS ALLOWED IN THE ASSESSEES OWN CASE BY THE TRIBUNAL IN I.T.A .NO.5065-M-2007 FOR A.Y 2004-05 AND THE COPY OF THE ORDER WAS FILED DUR ING THE HEARING OF THE APPEAL. SINCE THE TRIBUNAL HAS SET ASIDE THE MA TTER TO THE FILE OF THE AO. 6. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF THE TRIBUNAL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. PARA 7 OF THE ORDER WHERE THE ISSUE REGARDING DEDUCTION U/S.8 0IB ON ACCOUNT OF L/C DISCOUNTING IS CONCERNED READS AS UNDER: 7. AS FAR AS THE INTEREST ON L/C DISCOUNTING IS CO NCERNED, WE ARE OF THE VIEW THAT NORMALLY WHEN L/C BILLS ARE DISCOU NTED THE ASSESSEE IS REQUIRED TO PAY THE INTEREST AND IT IS AN ITEM O F EXPENDITURE. HOWEVER, IT WAS POINTED OUT BEFORE US THAT THE ACCO UNT HAS COME INTO CREDIT BECAUSE THE ASSESSEE HAS TOOK HIGHER INTERES T WHICH LATER ON WAS REDUCED AND THEREFORE SOME INCOME WAS GENERATED . SINCE THIS ALSO PERTAINS TO THE PRINCIPLE IN THE CASE OF DELAY ED PAYMENT FROM CUSTOMERS WOULD BE APPLICABLE. HOWEVER, THE FACTS HAVE NOT BEEN DISCUSSED BY THE LOWER AUTHORITIES. THEREFORE, WE S ET ASIDE THE ORDER OF THE LEARNED CIT(A) IN RESPECT OF THIS TIME AND R EMIT THE MATTER BACK TO THE FILE OF THE AO TO VERIFY THE INTEREST ON L/C DISCOUNTING AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. FROM THE ABOVE IT IS CLEAR THAT PRINCIPALLY TRIBUNA L HAS AGREED THAT DEDUCTION MAY BE ALLOWED ON THE PRINCIPLE OF DELAYE D PAYMENT FROM THE CUSTOMERS. HOWEVER, SINCE THE FACTS WERE NOT DI SCUSSED BY THE AO THE MATTER WAS REMANDED FOR VERIFICATION OF THE AMO UNT OF L/C MA NO.304/M/11 3 DISCOUNTING CHARGES. WE FURTHER FIND THAT AT THE LE VEL OF TRIBUNAL IT IS NOT POSSIBLE TO VERIFY THESE FIGURES AND SINCE THE SAME HAS NOT BEEN DISCUSSED BY THE AO OR CIT(A). THEREFORE, WE FELL T HERE IS NOTHING WRONG IF THE AO IS DIRECTED TO VERIFY THE FIGURE. A CCORDINGLY, WE ARE OF THE VIEW THAT NO ERROR IS THERE IN RESPECT OF DEDUC TION U/S.80IB PERTAINING TO L/C DISCOUNTING CHARGES AND, THEREFOR E, WE DISMISS THIS GROUND OF MISCELLANEOUS APPLICATION. 8. IN THE RESULT, MISCELLANEOUS APPLICATION IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 29/7/2011. SD/- SD/- (V.DURGA RAO) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 29/7/2011. P/-*