Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 922 - AT - Income TaxDisallowance of expenditure - Payment of Privilege fees - Nature of expenditure - Exclusive privilege for wholesale trade of Indian made Foreign Liquor & Beer - Held that:- The Excise Department on the basis of granting license to the buyers of the products sold by the assessee is entitled to license which privilege fees is demanded by the Excise Department. Therefore at no point of time can the assessee claim that it was not the part of expenditure for the purpose of its sales and it’s direct link - It was a controlled item for the purpose of decentralization and the procurement was from outside the State of Orissa was to be considered for sale in Orissa under the sharp eye of Excise Department not because Orissa Sate Beverages Corporation Ltd without having suffered production cost was the wholesale distributor only. This Excise Duty therefore is a privilege of the Excise Department as the Central Excise alone will jeopardize the sale of liquor of the same brand elsewhere causing undue illicit trade from outside the State of Orissa. Incidentally, this issue also takes care of the fact as pointed out by the learned Counsel for the assessee, that the jeeps were procured for the Excise Department were not to be used by the assessee independently had shown the ownership in their books of account and claimed deprecation on it which the learned Counsel for the assessee agreed that the depreciation cannot be allowed to it as the same were put to use by the Excise Department and not the assessee. The depreciation therefore was not to be claimed by the assessee as having not fulfilled the twin conditions being “ownership” and “put to use by the assessee”. Privilege fees therefore becomes integral part and parcel of expenditures to be allowed to the assessee insofar as it is linked to the sale which sale figures are on the basis of license granted by the Excise Department who are in full control in the State and therefore is directly linked to the turnover of the assessee which volume increases the license fees including the payment of privilege fees which remain intact at the threshold. CIT(A) merely followed the earlier decision when the Assessment Year 2003-04 on the actual fact finding he only considered it to be allowed and the license fees which was already claimed as revenue expenditure stood allowed by the Assessing Officer earlier and later as well. The privilege fee therefore is directed to be allowed for all the respective AYs - Following decision of Rajasthan State Beverages v. ACIT [2013 (9) TMI 557 - ITAT JAIPUR] - Decided in favour of assesee. Validity of proceedings u/s.147 - Held that:- cash discount available was rendered to tax in the Assessment Year 2005-06 therefore could not have been claimed in the Assessment Year 2001-02 validates the reopening of the assessment - Decided against assessee.
|