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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI DR. A.L. SAINI
Aforesaid appeal by the Revenue is against order dated 22nd November 2016, passed by the learned Commissioner (Appeals)–5, Mumbai, for the assessment year 2012–13.
The Revenue has raised the following effective grounds:–
“1. Whether in the facts and in the circumstances of appeal the learned CIT(A) was right to allow notional subjudice
2 Maultipack Systems P. Ltd. deduction of unutilized cenvat / service tax of earlier years when the assessee has not accepted the stand of revenue in earlier years and the litigation is on. 2. Whether in the facts and in the circumstances of appeal the learned CIT(A) was right to allow deduction of ` 93,88,038 when returned income has been accepted by the A.O. in the order made u/s 143(3) and there is no cause for appeal.”
Brief facts are, the assessee company is engaged in the business of manufacturing of packaging machines. For the assessment year under dispute, assessee had filed its return of income on 29th September 2012, declaring total income of ` 24,32,87,719. During the assessment proceedings, the assessee stated that while completing assessment for assessment year 2008–09 and 2009–10 and 2010–11, since, additions under section 145A of the Income Tax Act, 1961 (for short “the Act”) were made on account of unutilized CENVAT credit on closing stock / service tax, in the impugned assessment year the assessee is entitled to deduction of ` 93,88,038 which has been added to the returned income by the assessee. The Assessing Officer, however, did not accept the claim of the assessee on the reasoning that in earlier years assessee has disputed the additions made by the assessing officer and the dispute is pending before the appellate forum. Accordingly, he passed the assessment order under section 143(3) of the Act accepting the returned income. Assessee challenged
3 Maultipack Systems P. Ltd. the decision of the Assessing Officer before the first appellate authority.
The learned Commissioner (Appeals) taking note of the fact that the Tribunal while deciding the issue relating to the addition of CENVAT credit in the earlier assessment years has restored the matter to the Assessing Officer with certain directions, directed the Assessing Officer to follow the decision of the Tribunal.
At the time of hearing, the learned Authorised Representative submitted that in pursuance to the directions of the Tribunal assessee’s claim in the earlier assessment years have been allowed by the Assessing Officer. Therefore, the deduction claimed by the assessee in the impugned assessment year is not allowable. In this context, the assessee has filed the following letter before the Bench.
“25th June 2018 The Registrar 'I' Benach. Income Tax Appellate Tribunal Mumbai. Sir, Re: M/s. Multipack Systems Pvt. Ltd. (Now known as Omori India P. Ltd) Rohit Chambers Janmabhoomi Marg Fort, Mumbai 400001. PAN AAACM3013E Assessment Year 2012-13 Sub: Submissions for the appeal
4 Maultipack Systems P. Ltd.
Please refer to the ITAT appeal no. ITA 95/MUM/2017 fixed for hearing on 25/06/2018. In this connection, we, on behalf of our above named clients have state/submit as follows: In all the preceding assessment years, the assessing officer has made additions u/s 145A on account of unutilized cenvat credit and servic tax (ie Closing stock - Opening stock) in earlier years. The details of the same are as under:
A.Y. Amount (`) 2006–07 36,99,440 2007–08 14,28,790 2008–09 73,36,290 2009–10 69,94,755 2010–11 94,426
Against the said addition our clients had preferred an appeal before higher authorities. In AY 2012-13 if the similar additions is made as it has been year to year in the past by the department, there is a deduction of Rs. 93,88,038/- to be granted to our clients. Accordingly our clients had during the assessment proceedings asked for the deduction of Rs. 93,88,0387- on account of unutilized cenvat credit and service tax. However the Assessing officer has not granted the deduction in the assessment order at para no. 4 at page no. 2 of the order stating that "the assessee 's contention cannot be accepted since the assessee has not accepted the departments stand in the earlier "which are still pending at various stages". As against the said order for AY 2012-13, our clients had filed an appeal before CIT(A). The learned CIT(A) has directed the Assessing officer to allow the deduction of Rs. 93,88,0387- on account of unutilized cenvat credit and service tax. In AY: 2006-07, AY: 2008-09, AY: 2009-10, the IT AT has set aside the matter to the file of the AO to make similar adjustments to the opening stock, closing stock, purchases and sales as well. The similar stand has been taken by CIT (A) in AY: 2007-08, AY: 2010-11 and AY: 2011-12 and therefore no appeal has been filed before IT AT.
5 Maultipack Systems P. Ltd.
As per the directions of Hon'ble ITAT, the Assessing officer has passed order u/s 143(3) r.w.s. 254 for AY 2008-09 and AY 2009-10 wherein the Assessing officer has deleted the additions made. Copy of the orders are enclosed herewith. As the additions made u/s 145 A on account of unutilized cenvat credit and service tax has been deleted in the earlier years, then the claim for deduction of Rs.93,88,0387- in AY 2012-13 does not stand. Thus the above referred department appeal for AY 2012-13 may be set aside to the file of the Assessing officer and directions to be given following the orders of the earlier years.”
In view of the letter filed by the assessee referred to above, and considering the fact that addition of CENVAT credit in the earlier assessment years have been deleted by the assessing officer by accepting assessee’s claim, the deduction claimed by the assessee in the impugned assessment year cannot be allowed. Assessing Officer is directed to verify this fact and decide the issue accordingly.
In the result, Revenue’s appeal is allowed for statistical purpose. Order pronounced in the open Court on 25.06.2018