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TMI Blog2017 (8) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... all these issues are disposed of by this common order. 4. The assessee has filed concise grounds of appeals for all the three assessment years as follows: 1. The order of The Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. The CIT(A) erred in confirming the disallowance of entirety of special privilege fee/annual privilege fee (License Renewal fee)/vend fee/special fees paid during the relevant previous year in accordance with and in compliance with the Tami Nadu Prohibition Act 1937 read with the Tamil Nadu liquor (Supply by Whole sale) Rules, 1983. 2.1 The CIT(A) ought to have appreciated that similar payments for the earlier years from 1983-84 to 2009-10 has been allowed by the ITAT and or Hon'ble High Court of Madras and the CIT(A) grossly erred in ignoring and not following the earlier decision of the Tribunal and the High Court in assessee's own case on the very same issue. 3. The CIT(A) erred in holding that for the earlier years the Tribunal and the High Court had not specified that said fees are allowable under Section 37 grossly ignoring the fact that the question of allowability of such fees will arose only under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislated by placing before the Legislative Assembly and duly notified in the Official Gazette. 6. The CIT (A) erred in relying on the decision of the Hyderabad Tribunal in the case of Andhra Pradesh Beverages Corporation Limited ignoring the decision of the Co-ordinate Bench in assessee's own case. 6.1 The CIT(A) ought to have appreciated that the decision of the Hyderabad Tribunal was based on the Prohibition Act applicable to the State of Andhra Pradesh and the privilege fee etc., paid by Andhra Pradesh Beverages Corporation Ltd., and the Tribunal held that there was no specific provision charging privilege fee etc., under the Act. Thus, the decision of the Hyderabad ITAT is not applicable to the facts of the present case. 6.2 The CIT(A) ought to have appreciated that the ITAT, Hyderabad themselves have indicated that the decision of the Chennai Tribunal was not applicable to the case of the Andhra Pradesh Beverages Corporation is a fact prevailing were different in both the case. 6.3 The CIT(A) erred in not adjudicating the ground relating to disallowance of a sum of Rs. 40,75,34,247/- being annual privilege fee for FY 2010-11 not pertaining to this AY 2012-13, ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Sec.43B applied. It was a submission that this issue of vend fee had come in appeal before the Hon'ble Supreme Court in the case of Travancore Sugars & Chemicals Ltd., reported in Civil Appeal No.2558/2005, wherein the Hon'ble Supreme Court by an order dated 07.05.2015 had held that the 43B did apply and if the vend fee was paid by the assessee to the state before the due date for filing return then it is allowable as it would fall under fee "by whatever name called", even if the vend fee is called "privilege". The Hon'ble Supreme Court had held that if the payment had been made before the due date of the filing of the return, the same was allowable and alternatively, it was allowable in the year in which it is actually paid. It was a submission that for the AYs 2004-05 to 2008-09, the AO had disallowed the various fees paid by the assessee to the State Government holding that no retrospective levy was permissible. It was a submission that various fee more specifically the privilege fee had been directed by the government to be paid after the end of the relevant assessment year. It was submitted by the Ld.AR that this issue has also now been held in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld.CIT(A) in respect of the various fees paid by the assessee to the State Government was liable to be allowed. 8. In reply, the Ld.DR submitted that the levy of the fee has put the assessee into a loss and loss is an artificial loss and is basically a bogus loss on account of the unreasonable fees levied by the State Government on the assessee's company for the purpose of stripping the assessee company of all its profits. It was a further submission that the Managing Director of the assessee's company, though a government servant had written to the government in regard to the strong financial position of the assessee and had also suggested the quantification of the fees to be levied on the assessee and the same was also levied as per the request of the Managing Director. It was a further submission that when the costing of the liquor as sold by the assessee is verified, it is noticed that the same includes the basic price plus excise duty plus Sales Tax levied by the manufacturer plus the wholesale and retail margins and the Sales Tax paid by TASMAC. It did not include the various levies by State Government on the assessee's company which showed that the levy was not Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee's company are also appointees by the State Government. Admittedly, the assessee is also the monopoly dealer of liquor in the state of Tamil Nadu on account of the Tamil Nadu Prohibition Act, 1937. The levy on the assessee company is not by way of any demand but by way of a statutory compulsion in so far as the GOs are modifying the Rule 15 of the Tamil Nadu IMFS (Supply by wholesale) Rules, 1983. This being so, it cannot be said that there is a colourable device or that any attempt is being made to strip the assessee's company of its profits. The assessee company cannot do its business unless it pays the demands raised on it via statutory substitution of the levies. If at all these levies are to be challenged, it is to be done by the assessee. If the Income Tax Department desires to challenge these levies on the ground that it is encroaching upon the profits of the assessee company thereby affecting the levy of Income Tax on the profits of the assessee company, it would have to do so by writ before the Hon'ble Jurisdictional High Court. The Revenue cannot disallow the payments made by the assessee company in compliance to statutory levies holding the levies by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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