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Facts
The assessee sought a concessional tax rate of 25% for AY 2018-19, claiming its gross receipts for PY 2015-16 were Rs.49.01 Crores. However, the AO determined the gross receipts to be Rs.54.91 Crores, applying a 30% tax rate.
Held
The Tribunal held that the term 'total turnover or gross receipts' does not allow for deductions like excise duty. Even if excise duty were excluded, the total revenue including other income would still exceed Rs.50 Crores, thus qualifying for the 30% tax rate.
Key Issues
Whether the assessee is eligible for a concessional tax rate of 25% or the applicable rate is 30% based on its gross receipts in the previous year.
Sections Cited
143(3), 154, Finance Act, 2018
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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रण वष� / Assessment Year: 2018-19) M/s. Panasonic Carbon India Company Ltd. DCIT 77, Old No.35, 3rd floor, बनाम Circle-1, LTU, Pottpatti Plaza, Nungambakkam High Road, Chennai. / Vs. Chennai-600 034. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACI-5679-J (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri P. Uttamchand Jain (CA) - Ld. AR ��थ�कीओरसे/Respondent by : Ms. R. Anita (Addl.CIT) - Ld. DR सुनवाईकीतारीख/Date of Hearing : 28-08-2024 घोषणाकीतारीख /Date of Pronouncement : 18-11-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 23-02-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 20-02-2021. The sole grievance of the assessee is application of correct rate of tax.
It emerges that the assessee was assessed u/s 143(3) on 20-02- 2021. To seek correction of certain discrepancies, the assessee sought rectification u/s 154 and Ld. AO rectified the computation of income vide order dated 12-10-2023. In this computation, Ld. AO applied tax rate of 30% as against assessee’s claim of 25%. The assessee sought concessional rate on the ground that its gross receipts during previous year (PY) 2015-16 did not exceed Rs.50 Crores, The assessee claimed that its turnover was Rs.49.01 Crores only. However, Ld. AO denied the same. The Ld. CIT(A), upon perusal of Profit & Loss Account, held that assessee’s revenue from operations for the year ending 31-03-2016 were Rs.51.25 Crores. The other income was Rs.5.90 Crores. The gross receipts were Rs.54.91 Crores and therefore, the correct rate of tax would be 30% only. Aggrieved as aforesaid, the assessee is in further appeal before us.
The Ld. AR has placed on record a copy of First Schedule of Finance Act, 2018. The rates of tax as prescribed for a company, as per paragraph-E, are as follows: - (i) Where total turnover or the gross receipt in the previous 25% of the total year 2015-16 does not exceed fifty Crores rupees; income Other than that referred to in item (i) 30% of the total income Upon perusal of the same, it could be seen that the prescribed condition for concessional rate of tax of 25% is that the total turnover or the gross receipt in the previous year 2015-16 should not exceed Rs.50 Crores. The relevant financial statements for the year ended 31-03-2016 could be extracted as under: - Particulars Year ended 31-03-2016 Revenue from Operations (Note No.16) 51,25,70,311 Less : Excise Duty 2.24.00,965 Balance 49,01,69,346 Other Income (Note No.17) 5,90,23,856 Total 54,91,93,202
The argument of Ld. AR is that excise duty should be excluded from gross receipts of the assessee on the ground that it is recoverable from customers and turnover is accounted for on net basis. However, this argument could not be accepted since the expression used is ‘total turnover or gross receipts’. No deduction is intended to be granted. Another noteworthy fact is that the assessee does not have any other source of income except business income. The other income has also been assessed as Business Income only. Therefore, even if the argument of Ld. AR is accepted, the applicable rate would still be 30% since the revenue from operations including other income would exceed Rs.50 Crores. Therefore, correct basic rate as applicable to the assessee would be 30% only.
The appeal stand dismissed. Order pronounced on 18th November, 2024. Sd/- Sd/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा�� / VICE PRESIDENT लेखा सद� / ACCOUNTANT MEMBER चे�ई Chennai; िदनांक Dated : 18-11-2024 DS आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF