9911796707
TMI Blog2014 (7) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... d excise duty in the P & L account and also further claimed in computation of income thereby, there was double deduction. Therefore, he initiated proceedings under section 263 and set aside assessment to the A.O. for proper verification as he was of the opinion that the claims have not been examined in the assessment completed under section 143(3) originally. Consequent to that, A.O. made the assessment in A.Y. 2007-08 and reopened assessments for A.Ys. 2005-06 and 2006-07. Assessee has come in appeal on three quantum appeals and also filed appeal against the order passed under section 263, belatedly by 771 days. In the petition filed for condonation of delay, it was submitted that the appeal could not be filed in time as the papers had been misplaced by one of the office staff and the same could be traced out only on 12.08.2013 with a delay of 771 days. 3. We have heard the Ld. Counsel and the Ld. D.R. on the condonation petition filed for admitting the appeal ITA.No.1201/Hyd/2013. 4. First of all, there is no merit in the condonation petition filed as the affidavit cannot be taken as correct one. The order under section 263 was passed on 19.04.2011 and subsequently, assessee al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessments were reopened consequent to audit objection. Nowhere in the order it was mentioned that cases were reopened on the basis of audit objection and assessee has also not placed the satisfaction recorded, which was communicated to the assessee, so that this aspect can be examined. Just because, it was contended that the reopening is on the basis of audit objection, we cannot rely on the case law alone without examining the facts. Therefore, this contention of the Ld. Counsel cannot be accepted. The major contention raised by the Ld. Counsel is with reference to the fact that the proceedings were initiated after a period of 4 years from the end of relevant A.Y. It was contended that no notice under section 148 of the Act can be issued after a period of 4 years from the end of relevant A.Y. unless there is failure on the part of the assessee to disclose fully and truly all the material facts during the course of original assessment proceedings. Ld. Counsel relied on the following case law. (i) NYK Line (India) Ltd. vs. DCIT (2012) 68 DTR 90 (Bom.) (HC) (ii) Sound Casting (P) Ltd. vs. DCIT (2012) 250 CTR 119 (Bom.) (iii) Smt. Raj Rani Gulati vs. Union of India (2010) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer believes that the objection raised by the Audit is correct and then issues the notice for reopening the assessment, such notice is perfectly in order. In the instant case, Assessing Officer agreed with audit objection and then issued notice u/s.148. 5.3. The next technical ground taken by the appellant is that the Assessing Officer did not pass any speaking order on objections raised by it against reassessment. This ground again has no merit as the Assessing Officer has clearly answered all the objections raised by the assessee in his re-assessment order itself. Whether he disposes off the objections by a separate order or they are taken care of in the reassessment order itself, is only a matter of procedure and not a matter of merit. 5.4. Regarding the fourth technical ground raised by the appellant, that there was no failure on the part of the assessee to reopen the assessment beyond 4 years, it is to be mentioned that as per Explanation (1) to section 147, mere production of books of accounts from which the Assessing Officer with due diligence would have discovered the mistake does not amount to disclosure of all material facts. Accordingly even this gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty for the A.Ys. 2004-05 to 2008-09 : 1. Till AY 2004-05 the following treatment was given by the appellant company in respect of Expenditure towards Excise Duty: The Excise Duty on closing stock is neither included in the closing stock nor is debited to the P & L A/c for the year ending 31.03.04. The assessee company has claimed the excise duty expenditure in the profit and loss account for the year ending 31.03.04 as under: Particulars Amount (Rs.) Excise Duty Expenditure XXX Less: CENVAT Input Credit XX Net Expenditure Debited to Profit and Loss Account XXX 2. It is submitted that the appellant company has followed the following accounting system in respect of the Excise Duty for the AYs 2005-06 to 2007-08 as under : a. The appellant company has included the amount of excise duty payable on closing stock in the closing stock and correspondingly this amount was debited in the profit & loss account for the AYs 2005-06 to 2007-08 as under : Asst Year ED included in closing stock and correspondingly included under the head Manufacturing & Director Expenses in the P & L A/c. (Rs.) 2005-06 1,43,47,164 2006-07 1,04,27,774 2007-08 1,97,02,642 b. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither notified in the annual account nor in the. Tax Audit Report thus the argument was not proved. Further more, the deduction as claimed if allowed in the AY 2005-06 would lead anomalous situation of allowing the deduction relatable to the Excise Duty on closing stock twice i.e., in the AY 2004-05 and also in the AY 2005-06. Seen from any angle the it is a double claim and could not allowed". 13. Before the Ld. CIT(A), assessee submitted the same table and clarifications and explained the matter to the Ld. CIT(A). However, Ld. CIT(A) rejected the same and also enhanced in A.Y. 2005-06 by stating as under : "6.2. The information on record is carefully considered. At the outset the figures given by the appellant are inconsistent. Therefore, not reliable. If the appellant's version is correct, the figures mentioned in Table-l should tally with the figures mentioned in the last column of Table-3. Therefore, the information submitted by the appellant cannot be relied upon. Further, the Authorized Representative was asked to give details of stock valuation and how the excise duty was accounted for in books of accounts. However, such details were not furnished. Therefore, the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to employees and other benefits 22,53,536 Admin & Selling Exp 1,18,58,933 Interest & Financial Charges 2,85,24,028 Excise Duty (1,35,85,330 + 1,38,77,013) 2,74,62,343 Depreciation 2,21,33,386 97,41,77,692 Profit (Loss) for the year 5,12,12,101 Here, opening stock is reduced by excise duty of Rs. 1,38,77,013/- and Actual excise duty of Rs. 2,74,62,343/- is debited in P & L. ASSESSMENT YEAR 2007-2008 Actual P&L of Abhishek Transtel Limited 31.03.2007 Particulars Amount Income Sales & Operating Receipts 1,16,18,62,075 Other Income 1,38,73,939 Increase (Decrease) in stock 6,52,70,830 1,24,10,06,844 Expenses Material Consumed/ Dealt 1,11,78,14,172 Manufacturing / Direct Expenses 3,47,26,866 Payment to employees and other benefits 25,11,511 Admin & Selling Exp 1,02,46,685 Interest & Financial Charges 2,00,75,806 Excise Duty 41,72,230 Depreciation 64,53,891 Rescheduled P&L of Abhishek Transtel Limited 31.03.2007 Particulars Amount Income Sales & Operating Receipts 1,16,18,62,075 Other Income 1,38,73,939 Increase (Decrease) in stock [6,52,70,830 + 1,03,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of a company where tax is at uniform rate, it should be of no consequence to the department if a claim is made in one year or in other year. It was the submission that over a period the amounts are correctly claimed and therefore, no addition need to be made. 16. Learned D.R. however, relied on the orders of the authorities to submit that assessee has claimed double deduction in all the years. Therefore, the orders are to be sustained. 17. We have considered the issue. In spite of clarification given by the Ld. Counsel, we are still unable to come to any conclusion on this issue for the simple reason that the revised P & L account for financial year 31.03.2005 was not placed before us, which indicates that in A.Y. 2005-06 there may be a double claim in view of the changing method of accounting. Under the provisions of section 43B, excise duty paid is allowable as deduction if it is paid on or before the relevant due dates out of the outstanding amounts at the end year. However in the computation of income the assessee has to add the amount outstanding at the end of the year and then should claim the amount as deduction. As explained in A.Y. 2005-06, assessee has added amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under the Income-tax Act, raise disputes as to the year in which the deduction should be allowed. The question as to the year in which a deduction is allowable may be material when the rate of tax chargeable on the assessee in two different years is different; but in the case of income of a company, tax is attracted at a uniform rate, and whether the deduction in respect of bonus was granted in the assessment year 1952-53 or in the assessment year corresponding to the accounting year 1952, that is in the assessment year 1953-54, should be a matter of no consequence to the Department; and one should have thought that the Department would not fritter away its energies in fighting matters of this kind. But, obviously, judging from the references that come up to us every now and then, the Department appears to delight in raising points of the character which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him whether in one year or the other." 19. While agreeing with the principles laid down by the Hon'ble High Court, we are also guided by the judgment of Hon'ble Supreme Court in the case of CIT vs. British Paints India Ltd., (19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
