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2012 (7) TMI 490 - AT - Income TaxDeleting the addition made on account of deferment of Sales-tax by CIT - Held that - Joint Director, District Industries Centre, Belgium, Karnataka had issued a certificate stating that the unit is eligible to avail sales tax deferment both KST and CST for a period of eight years with effect from 14-12-2001. This shows that this unit of the assessee is eligible for the benefit of deferment of sales tax for the sales made up to 13-12-2009 and as the relevant case falls for the previous year 2006-07 and the assessment year 2007-08 which is well within the period of sanction granted by the appropriate Authorities in the State of Karnataka. Hence, the assessee is entitled to claim the benefit of deferment of sales tax for the relevant assessment year - Further no materials are produced by the Revenue to suggest that the certificate granted by the Joint Director is withdrawn or cancelled - in favour of the assessee.
Issues:
1. Whether the deletion of the addition made on account of deferment of Sales-tax by the Commissioner of Income tax (A)-XI, Ahmedabad was justified under section 43B of the Income Tax Act. Detailed Analysis: The case involved an appeal filed by the revenue against the order of the Commissioner of Income tax (A)-XI, Ahmedabad regarding the deletion of an addition of Rs.3,80,03,537/- on account of deferment of Sales-tax for the assessment year 2007-08. The appellant, a Private Limited Company engaged in manufacturing and trading, had shown a sales tax liability under the head "sales tax deferment." The assessing officer disallowed the claimed amount as deductible expenditure, citing non-production of evidence or certificate from the Commercial Department. The AO held that the claim was hit by the provisions of section 43B of the Income Tax Act and added the amount to the company's income. The assessee appealed to the CIT(A), who allowed the appeal based on previous decisions in the assessee's favor for other assessment years. The CIT(A) considered the relevant provisions and certificates issued by the authorities in Karnataka regarding deferment of sales tax. The ITAT, Ahmedabad "B" Bench had previously decided similar issues in favor of the assessee, emphasizing the eligibility of the unit for sales tax deferment as per the certificates issued by the Joint Director, District Industries Centre, Belgaum, Karnataka. The ITAT noted that the certificates confirmed the eligibility of the unit for sales tax deferment for a specified period, and the assessee had fulfilled all conditions. The ITAT upheld the CIT(A)'s decision to delete the addition of Rs.3,80,03,537/-, as the unit was entitled to claim the benefit of deferment of sales tax for the relevant assessment year based on the certificates issued by the appropriate authorities. The ITAT dismissed the appeal of the revenue, citing consistent decisions in favor of the assessee and the lack of evidence to suggest withdrawal or cancellation of the certificates. In conclusion, the ITAT upheld the decision of the CIT(A) to delete the addition made on account of deferment of Sales-tax, as the certificates issued by the authorities in Karnataka confirmed the eligibility of the unit for sales tax deferment, and the assessee had fulfilled all necessary conditions. The ITAT dismissed the revenue's appeal, emphasizing the applicability of previous decisions and the absence of evidence to challenge the validity of the certificates.
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