DCIT, Circle - 6, Kolkata, Kolkata v. M/s. GMMCO Ltd., Kolkata

ITA 580/KOL/2011 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 58023514 RSA 2011
Bench Kolkata
Appeal Number ITA 580/KOL/2011
Duration Of Justice 3 month(s) 10 day(s)
Appellant DCIT, Circle - 6, Kolkata, Kolkata
Respondent M/s. GMMCO Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-07-2011
Assessment Year 2006-2007
Appeal Filed On 12-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [ . . . . . . . . . . . . . .. . ! ! ! ! ' ' ' ' ] [BEFORE HONBLE SHRI B. R. MITTAL JM & HONBLE SHRI S.V. MEHROTRA AM] #$ #$ #$ #$ / I.T.A NO. 580/KOL/2011 %& '() %& '() %& '() %& '()/ // / ASSESSMENT YEAR : 2006-07 DY. COMMISSIONER OF INCOME TAX -VS.- M/S. G. M. M. CO. LIMITED CIRCLE-6 KOLKATA. KOLKATA [PAN : AABC 6094 C] [ + + + + /APPELLANT ] ]] ] [ ./+ ./+ ./+ ./+ / // / RESPONDENT ] ]] ] + + + + / FOR THE APPELLANT : SHRI P. P. SARKAR ./+ ./+ ./+ ./+ / FOR THE RESPONDENT : SHRI R. N. BAJORIA 0 /ORDER . . . . . .. . ! ! ! ! ' ' ' ' PER S. V. MEHROTRA A. M. THE REVENUE HAS PREFERRED THIS APPEAL FOR ASSESSME NT YEAR 2006-07 AGAINST THE ORDER OF THE LD. CIT(A)-VI KOLKATA DATED 20.10.2009. THE APPEA L HAS BEEN FILED ON 12.04.2011. 2. AT THE OUTSET LD. COUNSEL APPEARING ON BEHALF O F THE ASSESSEE SHRI R.N. BAJORIA REFERRED TO TRIBUNALS ORDER VIDE ITA NO.2145/KOL/2009 DATED 10.02.2010 FOR ASSESSMENT YEAR 2006-07 CONTAINED AT PAGES 27 TO 30 OF THE PAPER BOOK AND R EFERRED TO PARA 29 OF THE SAID ORDER. PARA 8 TO 10 OF THE SAID ORDER READS AS UNDER :- 8. GROUND NO.4 OF THE APPEAL IS AS UNDER: 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CITA) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.37 70 629/- WITH OUT CONSIDERING THE FACT THAT THE ASSESSEE WRONGLY CLAIMED THE SALES PROMOTION E XPENSES (LIABLE TO FBT) AS SELLING EXPENSES (FREE FROM FBT ). 9. DURING THE COURSE OF HEARING THE LEARNED DR S UBMITTED THAT THE DEPARTMENT IS TO FILE A SEPARATE APPEAL IN RESPECT OF THE ABOV E GROUND. THE LEARNED DR SOUGHT PERMISSION OF THE BENCH TO ALLOW TO WITHDRAW THE AB OVE GROUND FROM THIS APPEAL AND TO PERMIT THE DEPARTMENT TO FILE SEPARATE APPEA L ON THE ABOVE ISSUE. THE ITA NO. 580/KOL/20 11 2 LEARNED AR OF THE ASSESSEE SUBMITTED THAT HE HAS NO OBJECTION TO THE ABOVE SUBMISSIONS OF THE LEARNED DR. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LE ARNED REPRESENTATIVES OF THE PARTIES. IN VIEW OF THE ABOVE SUBMISSIONS WE TREAT GROUND NO.4 OF THE APPEAL AS DISMISSED AS WITHDRAWN GIVING LIBERTY TO THE DEPART MENT TO FILE A SEPARATE APPEAL IN RESPECT OF THE ABOVE GROUND IF SO ADVISED AND TH E SAME WILL BE CONSIDERED AS PER LAW. HENCE GROUND NO.4 OF THE APPEAL IS DISMIS SED AS WITHDRAWN. 2.1 LD. COUNSEL FURTHER REFERRED TO PAGES 31 TO 33 OF PAPER BOOK WHEREIN THE TRIBUNALS ORDER VIDE ITA NO.1610/KOL/2010 DATED 21.01.2011 FOR ASSE SSMENT YEAR 2007-08 IS CONTAINED AND REFERRED TO PARA 4 & 5 OF THE SAID ORDER WHICH READ S AS UNDER :- 4 ON THE OTHER HAND THE LD. COUNSEL FOR THE ASS ESSEE RELIED ON THE. ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ACTION OF THE LD. CIT(A) MAY BE UPHELD AS THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY FOLL OWING HIS ORDER FOR ASSESSMENT YEAR 2006-07 AND THE REVENUE DID NOT FILE ANY APPEA L AGAINST THE SAID ORDER. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL PLACED ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DIRECTED THE ASSESS ING OFFICER TO DELETE THE ADDITION OF RS.27 08 528/- FROM THE TOTAL FRINGE BE NEFIT VALUE BY FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2006-07. THE REVENUE DID FILE AN APPEAL AGAINST THE SAID ORDER OF THE LD. CIT(A) BEFORE THE TRIBUNAL VI DE ITA NO. 2145/K12009 FOR ASSESSMENT YEAR 2006-07 AND THIS GROUND WAS ALSO TA KEN ALONG WITH OTHER GROUNDS BUT AT THE TIME OF HEARING PERMISSION WAS S OUGHT TO WITHDRAW THE SAME AND TO FILE SEPARATE APPEAL IN RESPECT OF THIS ISSU E WHICH WAS GRANTED. SUBSEQUENTLY NO APPEAL HAS BEEN FILED BY THE DEPART MENT ON THIS GROUND FOR ASSESSMENT YEAR 2006-07. WE FURTHER FIND THAT THE L D CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 HAS OBS ERVED AS UNDER : 1 HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLA NT AND ALSO THE ORDER OF THE A.0. THE A.0. HAS ACCEPTED THAT THE SPARES SUPPLIED BY THE APPELLANT ON SALE MADE BY HIM ARE NOT TO BE CONSIDERED AS SALES PROMOTION EXPENSES. THE A 0. BROUGHT THE VALUE OF SPARES SUPPLIED BY THE APPELLANT ON EQ UIPMENTS SOLD BY THE PRINCIPAL UNDER SALES PROMOTIONAL EXPENSES AND CHARGED FBT. T HE APPELLANT IS THE DISTRIBUTOR/AGENT OF CATERPILLAR. THERE ARE TWO TYP ES OF TRANSACTIONS OF SALES UNDERTAKEN BY GMMCO. 1). SALE BY GMMCO ITSELF 2) S ALE BY PRINCIPALS AGAINST ORDER PROCURED BY GMMCO. IN THE CASE OF DIRECT SALE S BY GMMCO THERE IS A ELEMENT OF PROFIT EMBEDDED IN THE SALE PRICE. IN TH E CASE OF DIRECT SALE BY THE PRINCIPAL THERE IS AN ELEMENT OF COMMISSION TO THE APPELLANT. IN BOTH THE CASES NO SEPARATE BILLING IS DONE FOR THE SPARES SUPPLIED BY THE APPELLANT. THIS AMOUNTS TO SELLING EXPENSES. THE SPARES ARE SUPPLIED TO THE CU STOMER ONLY WHEN HE PURCHASES THE EQUIPMENT EITHER FROM THE APPELLANT OR FROM THE PRINCIPAL. THE SUPPLY OF SPARES IS ACTUAL TRANSACTION BASED AND AMOUNTS TO S ELLING EXPENSES. THE APPELLANT IS RECEIVING COMMISSION ON THE SALE MADE BY THE PRI NCIPAL ALSO. THE SALE BY THE PRINCIPAL IS ALSO THROUGH THE APPELLANT SINCE THE APPELLANT IS THE DEALER. UNDER THESE CIRCUMSTANCES IT CANNOT BE SAID THAT THE SPAR ES ARE SUPPLIED BY THE APPELLANT TO PROMOTE SALES ON BEHALF OF PRINCIPALS. THE CUSTO MERS OF THE PRINCIPAL ARE ALSO ITA NO. 580/KOL/20 11 3 THE CUSTOMERS OF THE APPELLANT BECAUSE FUTURE SERV ICING AND MAINTENANCE IS THE JOB OF THE DEALER I E THE APPELLANT. I HAVE ALSO GO NE THROUGH THE CBDT CIRCULAR NO. 8/2005 WHERE IN CBDT HAS CLARIFIED THAT ACTUAL SELLING EXPENSES DO NOT FALL WITHIN THE MEANING OF SALES PROMOTION INCLUDING PUB LICITY. IN MY OPINION THE SPARE PARTS SUPPLIED COME UNDER SELLING EXPENSES AN D ARE EXEMPT FROM THE PURVIEW OF FBT. HENCE I DIRECT THE A.O. TO DELETE T HE AMOUNT OF RS.37 70 629 FROM THE TOTAL FRINGE BENEFIT VALUE. THIS GROUND OF APPEAL IS ALLOWED. SINCE THE ABOVE FINDING OF THE LD. CIT(A) HAS NEITH ER BEEN CHALLENGED BY WAY OF FILING AN APPEAL BEFORE .THE TRIBUNAL NOR THE SAME WAS CONTROVERTED BY THE DR DURING THE HEARING OF THIS APPEAL FOR THIS YEAR BY WAY OF BRINGING ANY THING ON RECORD TO THE CONTRARY TO REBUT THE SAME WE ARE OF THE CONSIDERED OPINION THAT THIS HOLDS GOOD FOR THIS YEAR ALSO AS THE FACTS FOR BOTH THE YEARS ARE IDENTICAL. IN VIEW OF THIS WE FEEL NO NEED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS THEREFORE DISMISSED. 2.2 WITH REFERENCE TO ABOVE TWO ORDERS OF THE TRIBU NAL LD. COUNSEL SUBMITTED THAT FROM 10.02.2010 ONWARDS THE DEPARTMENT HAD SUFFICIENT TI ME TO FILE THE APPEAL AS PER SUBMISSIONS MADE IN COURSE OF PROCEEDINGS FOR ASSESSMENT YEAR 2006-0 7 NOTED ABOVE. LD. COUNSEL FURTHER SUBMITTED THAT WHEN THE APPEAL FOR ASSESSMENT YEAR 2007-08 WA S TAKEN UP FOR HEARING AGAIN THIS FACT CAME TO THE NOTICE OF THE DEPARTMENT BUT AGAIN NO APPEAL WA S PREFERRED TILL 12.04.2011. LD. COUNSEL SUBMITTED THAT THE DEPARTMENT HAS NOT FILED ANY CON DONATION PETITION AND THEREFORE DEPARTMENTALS APPEAL DESERVES TO BE DISMISSED PART ICULARLY WHEN APPEAL FOR ASSESSMENT YEAR 2007-08 ON THE SAME ISSUE HAS BEEN DECIDED BY TRIBU NAL. 3. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE AS SESSMENT ORDER. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE APPEAL. THE FACTS ARE ADMITTED. THE DEPARTMENT HAS NOT FILED ANY CONDONATION PETITION EXPLAINING THE DELAY IN FILING THE PRESENT APPEAL O N 12.04.2011 THOUGH REQUIRED TO FILE THE SAME AFTER 10.02.2010 IN TERMS OF TRIBUNALS ORDER OF EV EN DATE FOR ASSESSMENT YEAR 2006-07 (SUPRA). FURTHER WHEN THE APPEAL FOR ASSESSMENT YEAR 2007-0 8 ON THE SAID ISSUE WAS TAKEN UP FOR HEARING THE DEPARTMENT COULD ASK FOR ADJOURNMENT FOR FILING APPEAL IN TERMS OF TRIBUNALS ORDER DATED 10.02.2010. THE SAID COURSE WAS ALSO NOT ADOPTED BY THE DEPARTMENT. THE APPEAL FOR ASSESSMENT YEAR 2007-08 ON THE SAID ISSUE HAS ALREADY BEEN DEC IDED BY THE TRIBUNAL INTER ALIA OBSERVING THAT LD. CIT(A)S FINDINGS HAVE NOT BEEN CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. UNDER SUCH CIRCUMSTANCES WE ARE OF THE OPINION THAT THE DEPARTMENTAL APPEAL DESERVES TO BE DISMISSED ITA NO. 580/KOL/20 11 4 FOR WANT OF ANY EXPLANATION IN REGARD TO DELAY IN F ILING THE APPEAL FOR ASSESSMENT YEAR 2006-07 ON 12.04.2011 WHEN THE APPEAL FOR ASSESSMENT YEAR 200 7-08 HAD ALREADY BEEN DECIDED BY I.T.A.T. ON 21.01.2011. IN VIEW OF ABOVE DEPARTMENTAL APPEAL I S DISMISSED. 5. IN THE RESULT THE APPEAL FLED BY THE DEPARTMENT IS DISMISSED. 0 0 0 0 '1 '1 '1 '1 2 1% 3 4 2 1% 3 4 2 1% 3 4 2 1% 3 4 5' 5' 5' 5' ORDER PRONOUNCED IN THE COURT ON 22.07.2011. SD/- SD/- [ . . . . . . . . ] [ . . . . . .. . ! ! ! ! ' ' ' ' ] [ B. R. MITTAL ] [ S.V. MEHROTRA ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (5' 5' 5' 5') )) ) DATED : 22ND JULY 2011. 0 8 .9 :9(/ COPY OF THE ORDER FORWARDED TO: 1. + /APPELLANT : DY. COMMISSIONER OF INCOME TAX CIRCL E-6 KOLKATA. 2 ./+ / RESPONDENT : M/S. G. M. M. CO. LIMITED 9/1 R. N . MUKHERJEE ROAD KOLKATA. 3. 0% / CIT 4. 0% ()/ CIT(A) KOLKATA. 5. '3 .%/ DR KOLKATA BENCHES KOLKATA [/9 ./ TRUE COPY ] 0%1/ BY ORDER #A /ASSTT REGISTRAR [KKC 'BC %DA E' /SR.PS]