M/s G. Drugs Pharnaceuticals Ltd., Ludhiana v. DCIT, Ludhiana

ITA 1215/CHANDI/2010 | 2004-2005
Pronouncement Date: 28-02-2011 | Result: Partly Allowed

Appeal Details

RSA Number 121521514 RSA 2010
Assessee PAN AACCG2098P
Bench Chandigarh
Appeal Number ITA 1215/CHANDI/2010
Duration Of Justice 4 month(s) 10 day(s)
Appellant M/s G. Drugs Pharnaceuticals Ltd., Ludhiana
Respondent DCIT, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 28-02-2011
Date Of Final Hearing 31-01-2011
Next Hearing Date 31-01-2011
Assessment Year 2004-2005
Appeal Filed On 18-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NOS. 1214 & 1215/CHD/2010 ASSESSMENT YEARS: 2003-04 & 2004-05 M/S G. DRUGS PHARMACEUTICALS LTD. VS. THE DCIT CI RCLE VII LUDHIANA LUDHIANA PAN NO. AACCG2098P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY: SMT JAISHREE SHARMA ORDER PER BENCH BOTH THE APPEALS BY THE ASSESSEE ARE AGAINST THE S EPARATE ORDERS OF CIT(A)-II LUDHIANA BOTH DATED 10.9.2010 RELATING T O ASSESSMENT YEARS 2003-04 AND 2004-05 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2. BOTH THE APPEALS OF THE ASSESSEE INVOLVING THE S IMILAR ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE 3. THE FIRST ISSUE RAISED IN BOTH THE APPEALS FILED BY THE ASSESSEE ARE IDENTICAL AND READS AS UNDER:- 2 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH THE LD . CIT(A)-II LUDHIANA WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN TREATING THE AMOUNT OF RS. 60 23 729/- (ASSESSMENT YEAR 2003-04) AND RS. 39 27 344/- (ASSESSMENT YEAR 2004-05) ON ACCOUNT OF SALES TAX SUBSIDY AS A REVENUE RECEIPT. 4. THE GRIEVANCE OF THE ASSESSEE IN THIS REGARD IS THAT AN APPLICATION WAS MOVED BEFORE THE CIT(A) U/S 158 A(1) OF THE INC OME TAX ACT IN FORM NO.8 AND IT WAS PRAYED THAT AN SLP HAS BEEN FI LED AGAINST THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD AND THE SAME SHOULD BE DIRE CTED TO BE FOLLOWED 5. FROM THE PERUSAL OF THE APPELLATE ORDER WE FIND THAT THE CIT(A) TO HAVE HELD THAT IN VIEW OF THE RATIO LAID DOWN BY HO N'BLE PUNJAB & HARYANA HIGH COURT IN ABHISHEK INDUSTRIES LTD. (ITA NO. 110 OF 2005 ORDER DATED 4.8.2006) SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS REVENUE RECEIPT AND NOT CAPITAL IN NATURE AND HENCE THE ISSUE IS SETTLED AGAINST THE ASSESSEE. 6. WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) AN D FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. ABHISHEK INDUSTRIES LTD (SUPRA) THE SAID RECEIPT IS TO BE TREATED AS INCOME OF THE ASSESSEE. HOWEVER CIT(A) HAS ERRED IN NOT TAKING COGNIZANCE OF THE APPLICATION MOVED U/S 158A(1) OF THE ACT. THE ASSESSEE HAS FILED BEFORE US AN APPLICATION IN FORM NO. 8 WI TH A PRAYER THAT AS THE QUESTION OF LAW PENDING BEFORE THE HON'BLE SUPREME COURT BEING IDENTICAL TO THE QUESTION OF LAW RAISED BEFORE US THE ASSESS ING OFFICER MAY BE 3 DIRECTED TO FOLLOW THE SAME IN THE CASE OF THE ASSE SSEE RELATING TO ASSESSMENT YEARS 2003-04 AND 2004-05. THE SAID APP LICATION MOVED BY THE ASSESSEE WAS FORWARDED TO THE ASSESSING OFFICER . THE ASSESSING OFFICER HAS REPORTED THAT THE ASSESSEE COMPANY HAD FILED AN INTERLOCUTORY APPLICATION FOR INTERVENTION BEFORE THE HON'BLE SUP REME COURT IN THE CASE OF M/S ABHISHEK INDUSTRIES LTD (SUPRA) AND THE SAME HAD BEEN ADMITTED. THE ASSESSING OFFICER HAS ALSO MADE A REFERENCE TO THE QUESTION OF LAW PENDING BEFORE THE HON'BLE SUPREME COURT IN THE CAS E. 7. UNDER THE PROVISIONS OF SECTION 158 A(1) OF THE ACT WHERE THE ASSESSEE CLAIMS THAT AN IDENTICAL QUESTION OF LAW I S PENDING BEFORE THE HON'BLE HIGH COURT OR SUPREME COURT AND A DECLARATI ON IS FURNISHED IN FORM NO.8 THE PROCEDURE TO BE FOLLOWED IS PRESCRIB ED U/S 158A WHICH PRESCRIBES THE SPECIAL PROVISIONS FOR AVOIDING REPE TITIVE APPEALS. IN THE FACTS OF THE PRESENT CASE BEFORE US IDENTICAL QUES TION OF LAW IS PENDING BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF ABH ISHEK INDUSTRIES VS. CIT IN CIVIL APPEAL NO. 244 OF 2007 IN WHICH THE AP PLICANT HAS BEEN ADMITTED AS AN INTERVENOR. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO FOLLOW THE RATIO LAID DOWN BY THE HON'BLE SUPREM E COURT IN M/S ABHISHEK INDUSTRIES LTD (SUPRA) AS AND WHEN THE SAM E IS AVAILABLE AND AMEND THE ORDER ACCORDINGLY. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED SUBJECT TO THE OUTCOME OF HIS APPLICATION MOVED U/S 158A(1) OF THE ACT. THE GROUND NOS. 1 & 2 RAISED B Y THE ASSESSEE ARE THUS DECIDED AS INDICATED ABOVE 8. THE SECOND ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE DISALLOWANCE OF RS. 30 000/- (ASSESSMENT YEAR 2003- 04) AND RS. 50 000/- (ASSESSMENT YEAR 2004-05) OUT OF TRAVELING AND CONV EYANCE AND 4 ENTERTAINMENT EXPENSES. THE ASSESSING OFFICER HAD MADE ADDITION FOR NON MAINTENANCE OF THE PROPER VOUCHERS WHICH WAS CONFI RMED BY THE CIT(A). IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES WE REST RICT THE DISALLOWANCE TO RS. 15 000/- IN ASSESSMENT YEAR 2003-04 AND RS. 25 000/- IN ASSESSMENT YEAR 2004-05. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS PARTLY ALLOWED. 9. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF FEBRUARY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH FEBRUARY 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR