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2018 (8) TMI 1996 - AT - Income TaxDistribution of profit - Payment of rate difference after the closure of the accounting year - HELD THAT - It is an agreed position between the parties that the issue raised herein stands concluded by the decision of this Court in Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. 2009 (4) TMI 19 - BOMBAY HIGH COURT in favour of the Respondent-Assessee - question as framed does not give rise to any substantial question of law as the impugned order has merely followed the binding decision of this Court. Thus not entertained. Depreciation on fixed assets on project - Non deducting subsidy received from the National Dairy Development Board ignoring the provisions of section 43(1) and Explanation 10 to section 43(1) - HELD THAT - Issue as squarely covered by the order of Hon ble High Court in assessee s own case relating to assessment years 2007- 08 and 2008-09 2009 (4) TMI 19 - BOMBAY HIGH COURT wherein the Hon ble High Court has observed that the relief was given to assessee in earlier years against which the Revenue had not filed any ground though it had filed the appeal in respect of said orders of Tribunal. The Hon ble High Court thus dismissed the grounds of appeal raised by the Revenue in this regard.
Issues:
- Whether payment of rate difference after the closure of the accounting year amounts to distribution of profits? - Whether payment of rate difference on account of commercial expediency is justified? - Whether deletion of addition for depreciation on fixed assets without deducting subsidy received is justified? - Whether the order of the CIT(A) should be vacated and that of the Assessing Officer be restored? Analysis: Issue 1: Payment of rate difference and distribution of profits The Revenue contested the deletion of an addition of ?41,73,35,710 made in the assessment year 2012-13, arguing that the payment of rate difference after the closure of the accounting year should be considered as distribution of profits. The Tribunal referred to previous decisions by the Hon'ble Bombay High Court and held that the issue was covered by precedent. The Tribunal upheld the order of the CIT(A) based on the established legal principles, dismissing the grounds of appeal raised by the Revenue. Issue 2: Payment of rate difference for commercial expediency The Revenue also challenged the payment of ?41,73,35,710 on account of rate difference, arguing that it lacked commercial expediency due to the absence of demand from milk suppliers. The Tribunal considered the arguments presented and concluded that the issue was similar to past cases where relief was given to the assessee. Following the precedent set by the Hon'ble High Court, the Tribunal dismissed the ground of appeal raised by the Revenue on this issue. Issue 3: Deletion of addition for depreciation on fixed assets Another issue raised was the deletion of an addition of ?9,46,087 made by the Assessing Officer towards depreciation on fixed assets without deducting the subsidy received from the National Dairy Development Board. The Tribunal examined the provisions of section 43(1) of the Act and Explanation 10 to section 43(1) and upheld the decision of the CIT(A) based on the principles established in previous cases. The Tribunal dismissed the ground of appeal raised by the Revenue on this issue. Issue 4: Restoration of Assessing Officer's order The Revenue prayed for the order of the CIT(A) to be vacated and that of the Assessing Officer to be restored. However, the Tribunal, after considering all the arguments and legal precedents, dismissed both appeals of the Revenue, upholding the decisions made by the CIT(A) for the assessment years 2012-13 and 2013-14. In conclusion, the Tribunal based its judgment on established legal principles and precedent set by the Hon'ble Bombay High Court, upholding the decisions made by the CIT(A) and dismissing the appeals filed by the Revenue for both assessment years.
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