NEVITAD DISTILLERS P.LTD,NASHIK vs. ITO WD 1(3), KALYAN

सुनवाई की तायीख / Date of Hearing : 21.03.2017 घोषणा की तायीख /Date of Pronouncement : 12.04.2017 आदेश / O R D E R PER D. KARUNAKARA RAO, AM: There are two appeals under consideration and they are cross appeals for the assessment year 2006-07. Both these appeals are filed against the order of the CIT (A)-2, Mumbai dated 30.7.2015. Since, the issues raised in these appeals are inter- connected, therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise adjudication is given in the following paras of this order.

in their respective appeals revolves around the common issue relating to the allowabilty of claim of deduction of license fees for the year under consideration when the said amount constitutes pre-paid one for the business purposes of the assessee. Rest of the grounds are either not pressed or general in nature. On the core issue, Ld Counsel for the assessee brought my attention to pages 14 onwards of the paper book and mentioned that the assessee is under statutory obligation to make the license fees payments before 30th March of the earlier previous year for the AY under consideration. Ld AR further mentioned that the license fees payment were made before March, 2005 for the AY 2005-06 so that the assessee is allowed to conduct business validly for that AY.

3. On perusal of the papers filed before the Tribunal and the explanation of the assessee in this regard, I find, the assessee is consistently following this method of accounting ie making license fees in the earlier previous year for obtaining permission to conduct the business in the year under consideration. Considering the consistency in the method of accounting followed by the assessee, I am of the opinion, the claim of the assessee is proper and there is no need for disturbing the same without having any valid reasons it if the assessee is under any obligation to make such advance payments. However, in the remand proceedings, Assessing Officer shall allow the claim of the assessee subject to the finding of the fact that the assessee is under statutory obligation to make the payment well in advance ie before the end of the preceding FY and also subject to the condition that the assessee follows this method of accounting consistently over the years. Accordingly, grounds raised by the assessee are allowed protanto.

4. Considering my decision on the core issue raised by the assessee in its appeal, the grounds raised by the Revenue are required to be dismissed. Accordingly I order. Thus, the grounds raised by the Revenue are dismissed.