ACIT, New Delhi v. M/s. Morgan Industries Ltd., New Delhi

ITA 1076/DEL/2010 | 2006-2007
Pronouncement Date: 13-05-2010 | Result: Dismissed

Appeal Details

RSA Number 107620114 RSA 2010
Assessee PAN AAACM0967F
Bench Delhi
Appeal Number ITA 1076/DEL/2010
Duration Of Justice 2 month(s) 2 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Morgan Industries Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 13-05-2010
Assessment Year 2006-2007
Appeal Filed On 11-03-2010
Judgment Text
ITA NO. 1076/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E. NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1076/DEL/2010 A.Y. : 2006-07 ACIT CIRCLE 5(1) VS. M/S. MORGAN INDUSTRIES L TD. ROOM NO. 409 CR BLDG. M-24 GREEN PARK EXTN. I.P. ESTATE NEW DELHI NEW DELHI (PAN : AAACM0967F) [APPELLANT] (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. G.S. SOHATA SR. DR PER SHAMIM YAHYA: AM THE REVENUE IS IN APPEAL BEFORE US AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 15.1.201 0 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUND RAISED READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF RS. 57 11 226/- MADE BY THE ASSESSING OFFICER U/S 43B READ WITH SECTION 145A OF THE IT ACT BEING THE NON/LATE DEPOSIT OF E XCISE DUTY. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IGNORE D THE FACT THAT THE ASSESSEE DID NOT FULFILL THE CONDITIONS LAID DOWN U/S 43(2) FOR AVAILING BENEFIT U/S 43B OF THE ACT. 3. ON THIS ISSUE FROM THE AUDITORS REPORT ASSES SING OFFICER NOTED THAT EXCISE DUTY ON CLOSING STOCK OF FINISHED GOODS WAS RS. 57 11 226/-. THE ASSESSING ITA NO. 1076/DEL/2010 A.Y. 2006-07 2 OFFICER ASKED FOR THE DETAIL OF PAYMENT OF THIS A MOUNT. ASESSEE EXPLAINED THAT NO PAYMENT OF EXCISE DUTY WAS MADE IN CASH AND CHEQ UE. THE AUDITORS HAD CERTIFIED THAT TOTAL FINISHED GOODS OF RS. 349.95 L AKHS LYING WITH THEM ON 31.3.2006 HAVE BEEN SOLD BEFORE 31 ST MARCH 2006 AND CORRESPONDING EXCISE DUTY OF RS. 57.11 LACS HAS BEEN ADJUSTED IN CENVET CREDIT BEFORE 31 ST OCTOBER 2006. ASSESSING OFFICER WAS OF THE OPINION THAT SINCE TH E ABOVE AMOUNT HAS NOT BEEN ACTUALLY PAID THE SAME WAS NOT ALLOWABLE AND HE D ISALLOWED THE SAME. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOM E TAX (APPEALS) DELETED THE DISALLOWANCE PLACING RELIANCE UPON THE SPECIAL BENCH DECISION OF THE ITAT IN THE CASE OF DCIT VS. GLAXO SMITHKLINE HEALTCARE LTD . (107 ITD 343) AND HELD AS UNDER:- I HAVE GIVEN A CAREFUL THOUGH TO THE SUBMISSION MADE ON BEHALF OF THE APPELLANT COMPANY AND FINDINGS RECORDED BY THE LD. ASSESSING OFFICER. ON CONSIDERATION I FIND THAT THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT COMPANY DESERVE TO SUCCEED. A PERUSAL OF PROVISO A PPENDED BELOW SECTION 43B REVEALS THAT NO DISALLOWANCE UNDER THE SAID SE CTION WAS TO BE MADE IF THE TAX DUTY CESS OR FEE (BY WHATEVER NAME C ALLED) WAS ACTUALLY PAID BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETU RN U/S 139(1) OF THE IT ACT 1961. AS STATED EARLIER THE APPELLANT COMPANY IN T HE PRESENT CASE HAS SOLD THE ENTIRE CLOSING STOCK IN QUESTION AND PAID THE E XCISE DUTY AMOUNTING TO RS. 57 11 226/- BY WAY OF SET OFF AGAINST THE CEN VET CREDIT AFTER 31.3.2006 BUT BEFORE THE DUE DATE OF FILING OF RET URN I.E. 31.10.2006. IT MAY BE STATED HERE THAT THE HONBLE SPECIAL BENCH OF IT AT CHANDIGARH IN THE CASE OF DCIT VS. SMITHKLINE HEALTHCARE LTD HAS IN N O UNCERTAIN TERMS HELD ITA NO. 1076/DEL/2010 A.Y. 2006-07 3 THAT THE CREDIT BALANCE BECOMES EQUIVALENT TO PAYME NT AT THE POINT OF TIME THE ASSESSEE EXERCISES OPTION TO SET OFF THE CREDIT AGAINST THE CENTRAL EXCISE DUTY LIABILITY. IN THE PRESENT CASE THE ASSESSING OFFICER NO WHERE DISPUTES THE FACT THAT ENTIRE DUTY LIABILITY IN RESPECT OF C LOSING STOCK AS ON 31.3.2006 WAS PAID BY WAY OF SET OFF AGAINST THE CENVET CREDI T BEFORE THE DATE OF FILING OF RETURN I.E. 31.10.2006. HER ONLY OBJECT ION IS THAT THE ASSESSEE HAS FAILED TO PAY THE EXCISE DUTY THROUGH PROFIT AND LO SS ACCOUNT AND THIS IS WHY THE SAME WAS NOT TO BE TREATED AS ACTUAL PAYMENT FO R THE PURPOSE OF SECTION 43B OF THE IT ACT. I AM AFRAID THIS IS NO T WHAT WAS DECIDED BY THE HONBLE SPECIAL BENCH IN THE CASE OF DCIT VS. GLAX O SMITHKLINE HEALTHCARE LTD. AS STATED EARLIER THE HONBLE SPECIAL BENCH HAS CLEARLY HELD THAT THE CREDIT BALANCE BECOMES EQUIVALENT TO PAYMENT AT THE TIME OF ASSESSEE EXERCISING HIS OPTION TO SET OFF THE CREDIT BALANCE IN CENVET ACCOUNT AGAINST THE CENTRAL EXCISE LIABILITY WHICH IS PRECISELY TH E POSITION IN THE PRESENT CASE. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTAT IVE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. LD. DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE SPECIAL BENCH DECISIO N IN THE CASE OF DCIT VS. GLAXO SMITHKLINE HEALTHCARE LTD. CITED ABOVE. 8. RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE W E UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ITA NO. 1076/DEL/2010 A.Y. 2006-07 4 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/5/2010 UPO N CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 13/5/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES