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DCIT, Circle-1, Kakinada Versus M/s. Sudha Agro Oil and Chemical Industries Ltd. and Vica-Versa

2016 (3) TMI 1009 - ITAT VISAKHAPATNAM

Accrual of income - Assessment of income - nature of receipt - assessee has received power escalation charges from CSEB - department has taken a view that the said amount is taxable on accrual basis, therefore, made additions for the assessment year 2008-09 - Held that:- CIT(A) after considering the facts and circumstances of the case, held that it is settled principles of law that there cannot be double taxation of any income and set aside the issue to the file of the A.O. with a direction to c .....

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d it cannot be taxed for both the assessment years. We concurred with the decision taken by the CIT(A). It is settled proposition of law that no income shall be taxed twice. In the present case on hand, the A.O. has accepted that the income has been taxed by the department for the assessment year 2008-09. As rightly contended by the assessee it can be taxed either for the A.Y. 2008-09 or 2009-10 and it cannot be taxed for both the years. Therefore, we are of the opinion that, the CIT(A) has righ .....

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ore, we direct the A.O. to delete the additions made u/s 43B of the Act.- Decided against revenue - I.T.A.No.449/Vizag/2013, I.T.A.No.471/Vizag/2013 - Dated:- 11-2-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Smt. D. Komali Krishna, DR For The Respondent : Shri G.V.N. Hari, AR ORDER PER G. MANJUNATHA, Accountant Member: These cross appeals filed by the revenue, as well as assessee are directed against the order of CIT(A)-11, Mumbai, Camp .....

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its return of income for the assessment year 2009-10 on 29.9.2009 declaring a total income of ₹ 1,28,01,700/-. The case was selected for scrutiny under CASS and accordingly, notices u/s 143(2) & 142(1) of the Income- Tax, 1961 (hereinafter called as the Act ) were issued. In response to notice, authorized representative of the assessee appeared from time to time and furnished books of accounts and other information called for. During the course of assessment proceedings, the A.O. notic .....

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, submitted that the Chattisgarh State Electricity Regulatory Commission has passed an order on 15.1.2008 enhancing the sale price of power and accordingly awarded an amount of ₹ 3,34,41,482/- for the financial years 2006-07 & 2007-08. The CSEB has filed an appeal before the Appellate Tribunal for Electricity, New Delhi against the order of Electricity Regulatory Commission and challenged the order. The Appellate Tribunal has decided the issue in favour of the assessee on 6.11.2009 con .....

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was received. The assessee further submitted that though it has offered the said income in the financial year 2008-09 relevant to assessment year 2009-10, the same was already been taxed by the assessing officer for the assessment year 2008-09, resulting a double addition for the same income in two financial years. Therefore, requested to exclude the income admitted for the current year and to this effect, filed a revised statement of total income excluding the amount received from the Electrici .....

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ome filed along with the return of income. The A.O. further held that though assessee has offered the income for the assessment year 2009-10 and also the fact that the same income was taxed for the assessment year 2008-09, the issue is before CIT(A) and CIT(A) has not passed any order, therefore, rejected the revised statement of total income and completed the assessment based on assessee admission. Since, assesse itself credited the income in the books of account, no separate addition is made. .....

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the assessee set aside the issue to the file of the A.O. with a direction that in case, the appeal filed by the assessee for the assessment year 2008-09 on this account was dismissed, the A.O. is directed to allow the relief for the assessment year 2009-10. In case, relief is allowed in assessment year 2008-09, then no relief shall be allowed for the assessment year 2009-10. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 4. We have heard both the sides, perused the materials .....

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e assessment year 2008-09, same should be excluded for the assessment year 2009-10, otherwise it amounts to double taxation. The A.O. rejected the claim of the assessee and proceeded to assess the income as admitted by the assessee as per the statement of total income filed along with return of income. The CIT(A) after considering the facts and circumstances of the case, held that it is settled principles of law that there cannot be double taxation of any income and set aside the issue to the fi .....

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r for the assessment year 2009-10 and it cannot be taxed for both the assessment years. We concurred with the decision taken by the CIT(A). It is settled proposition of law that no income shall be taxed twice. In the present case on hand, the A.O. has accepted that the income has been taxed by the department for the assessment year 2008-09. As rightly contended by the assessee it can be taxed either for the A.Y. 2008-09 or 2009-10 and it cannot be taxed for both the years. Therefore, we are of t .....

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ts of the issue are that the assessee has made payment of ₹ 21,59,515/- towards CST and service tax under protest and claimed the deduction u/s 43B of the Act, while computing the income from business. The A.O. disallowed the amount u/s 43B of the Act, by stating that the assessee has not admitted the liability, therefore, the amount is not allowable u/s 43B of the Act. The CIT(A) upholding the order of the A.O., held that when the liability is not crystallized during the year under consid .....

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epted the liability and not recognized in the books of account, therefore, the same is not qualified to be claimed as expenditure. Once, the expenditure is not qualified to be deductible, then, no deduction is allowed under section 43B of the Act. It was the contention of the assessee that it has paid the amount, therefore, eligible for deduction u/s 43B of the Act. Whether the liability was paid without any condition or with protest, it does not change the characteristics of the expenditure. 7. .....

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cess or fee, by whatever name called, under any law for the time being in force, or] (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, [or] (c) any sum referred to in clause (ii) of sub-section (1) of section 36] [or] [(d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution [or a State financial corporation or .....

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in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him 8. From the plain reading of section 43B of the Act, it is clear that any sum payable by the assessee by way of tax, duty, cess or fee by whatever name called, under any law for the time being in force, shall be allowed only in computing the incom .....

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hand, though the assessee paid the tax under protest, the actual payment is made during the financial year relevant to assessment year 2009-10. The A.O. has misinterpreted the provisions of section 43B, by stating that the deduction is available, only when such liability was debited to profit & loss account. Therefore, we are of the opinion that the assessee is eligible for deduction for the CST and service tax paid on actual payment basis u/s 43B of the Act, whether it was paid under prote .....

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sing, sales promotion, received creative fee for creation of advertisement and commission for placement of advertisement in media from customers and had got registered itself for payment of Service tax under the category advertising agency services -Assessee had paid service tax only on the income from creation of advertisement and commission received from customers for placement of advertisements in media-However, it had not paid service tax on renegotiated prices-A survey was carried out by se .....

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