DY. COMMISSIONER OF INCOME TAX , CIRCLE-1(1), HYDERABAD vs. ANDHRA PRADESH BEVERAGES CORPORATION LIMITED , HYDERABAD

Date of Hearing : 01/06/2021 Date of Pronouncement : 17/08/2021 O R D E R PER S.S. GODARA, J.M. This Revenue’s appeal for A.Y. 2015-16 arises against the CIT(A)- 1, Hyderabad’s order dated 31.09.2019 passed in case no. 0195/2017- 18, involving proceedings u/s 143 (3) of the Income Tax Act, 1961 [ in short ‘the Act’].

Heard both the parties. Case file perused.

M/s Andhra Pradesh Beverages Corporation Ltd., Hyd.

2. CIT (Appeals) erred in passing cryptic order on the issue, without discussing the allowability of such claim by the assessee for deduction u/s 80G.

Total tax effect : Rs.93,69,05,624/- 2.1. Both the learned Representatives next took us to CIT(A)’s detailed discussion regarding assessee’s contribution made to the Chief Minister’s Relief Fund to the tune of Rs. 275,64,15,487/- as under:

“5.5. With regard to the above ground, the appellant submitted that these amounts have been paid to the State Government, who is the owner of the Corporation, by the Appellant as per the liquor sale. The appellant submitted that this payment was made in accordance with Government Order. This itself contradicts the Appellant's submission made earlier before me. The issue has been dealt with the Hon'ble ITAT in para 22 of its order in & 545/Hyd/2013 for the AYs. 2006-07, 2008-09 & 2009-10 as under:

"22..... Furthermore, as has been rightly pointed out by the Assessing Officer the assessee has treated the amount representing payment to Chief Minister's relief fund as its income and thereafter has claimed deduction u/s. BOG of the Act. This itself falsifies the assessee's claim that the entire sale proceed from IMFL is the income of the Government. "

M/s Andhra Pradesh Beverages Corporation Ltd., Hyd.

Hence, I follow the Hon'ble ITAT, stand taken in earlier year. It is an income to be taxed in the hands of Corporation. The appellant has been claiming that the entire sale receipts are the receipts in the hands of the Government of Andhra Pradesh and an amendment by way of Amendment Act, 2012 was also made stating that the entire income of the Corporation is the income of the Government of Andhra Pradesh. If that is the case, the income of the State being exempt, there is no necessity to claim 80G deduction. Nevertheless, since the stand of the Income Tax Department, has always been that the sale proceeds are to be taxed in the hands of the Corporation. Since the submission before me. has been that the income of the Corporation is given by the state government to run the Corporation, hence taking back some funds by the state Governments after funds have been dispatched, contradicts the stand of the appellant This way the appellant has no ground. Therefore, respectfully following the hon’ble ITAT, Hyderabad bench and CIT(A) order in the appellant’s own case for the AY 2014-15, the submissions of the appellant is not accepted. I direct the AO to allow the deduction only if the wholesale proceeds are treated as income of the appellant.”

2.2. It is sufficiently clear from a perusal of the foregoing factual position that this tribunal has already decided the very issue in preceding AY 2014- 15 and the CIT(A) has followed the same, there is no distinction pin-pointed at its behest in these twin AYs. We, therefore, adopt judicial consistency to reject the Revenue’s instant sole substantive grievance.

This Revenue’s appeal is dismissed. Pronounced in Open Court on 17th August, 2021.