DCIT, COIMBATORE vs. THE COIMBATORE DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD., COIMBATORE

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ITA 3324/CHNY/2016Status: DisposedITAT Chennai31 October 2017AY 2013-144 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the fact that an appeal was filed before the High Court does not warrant a different view. Following its own previous orders on identical issues, the Tribunal confirmed the deletion of the addition.

What were the facts?

The assessee showed an amount as sundry creditors, which included additional price payable to other societies for milk procurement. The Assessing Officer treated this as a contingent liability and made an addition. The CIT(Appeals) deleted the addition, finding the liability crystallized.

What were the issues?

Whether the amount payable as additional price to societies for milk procurement, debited to the P&L account and approved by the government, constitutes a crystallized liability for the year.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI SANJAY ARORA

Hearing: 12.10.2017Pronounced: 31.10.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -3, Coimbatore, dated 21.09.2016 and pertains to assessment year 2013-14.

2.

The only issue arises for consideration is addition of `8,02,35,099/-.

3.

Shri N. Madhavan, the Ld. Departmental Representative, submitted that the assessee has shown `8,02,35,099/- as sundry creditors as on 31.03.2013, which included the amount payable towards additional price to other societies. According to the Ld. D.R., the assessee explained before the Assessing Officer that the additional price payable to societies, who procured milk from farmers, was shown as sundry creditors. The additional price has to be paid to the societies after getting approval from Government.

According to the Ld. D.R., the Assessing Officer found that the amount which was set apart to meet contingent liability cannot be allowed as expenses. However, the CIT(Appeals) found that the additional price payable to the societies for procuring milk was debited to Profit & Loss account and approved by Government, therefore, the liability was crystallized during the year under consideration. Accordingly, by placing reliance on the order of this Tribunal in the assessee's own case for assessment years 2010-11 and 2011-12, the CIT(Appeals) deleted the addition made by the Assessing Officer. According to the Ld. D.R., the Department has already filed an appeal before the High Court against the order of this Tribunal, therefore, the CIT(Appeals) is not justified in deleting the addition made by the Assessing Officer.

4.

No one appeared for the assessee inspite of issue of notice by RPAD.

5.

We have considered the submissions made by the Ld. D.R. and proceeded to dispose the appeal on merit. From the material available on record, it appears that the amount of `8,02,35,099/- was claimed as additional price payable to societies for procuring milk. On identical circumstances, a similar addition made by the Assessing Officer in the assessee's own case, for assessment years 2010-11 and 2011-12 was deleted by this Tribunal. Now, the contention of the Revenue before this Tribunal is that an appeal has already been filed before the High Court. This Tribunal is of the considered opinion that merely because an appeal was filed before the High Court, that cannot be a reason to take a different view on the issue Therefore, for the reasons stated by the co-ordinate Bench of this Tribunal for assessment years 2010-11 and 2011-12, the order of the CIT(Appeals) is confirmed.

6.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on 31st October, 2017 at Chennai.

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