9911796707
TMI Blog2009 (9) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... has not raised demand for sales-tax. 2. Short facts giving rise to this Miscellaneous Application are as under : Assessee had set up a unit in the District of Raigad, being a notified backward area eligible for incentive as per the schemes announced by the Government of Maharashtra in 1993. The incentive was in the form of deferment of payment of sales-tax in terms of a package scheme of incentives. As per this scheme, sales-tax liability up to the end of the relevant previous year was required to be paid in five equal instalments starting from April 2010. Government of Maharashtra appointed M/s. SICOM Ltd., as the implementing agency and M/s. SICOM Ltd., in the relevant year gave a premature payment option to the assessee. As per this premature payment option, against the sales-tax of Rs. 1,79,68,846 a one time payment of Rs. 59,49,288 would once for all settle the liability. The amount of Rs. 50,49,288 appears to be the present value of the deferral payments due after 10 years. This was accepted by the assessee and the amount paid to M/s. SICOM. During the course of assessment, assessee s contention was that the liability on account of deferral was akin to an unsecured loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted to an interest-free loan payable in 5 annual instalments from April 2010; ( ii )Sales-tax collected, though it was a trading receipt was, not chargeable to tax, on its non-payment, since Board Circular No. 674 clearly mentioned that conversion of sales-tax liability into a loan liability as per a deferral scheme, amounted to actual payment of the statutory liability under section 43B of the Act. ( iii )Board Circular No. 673 was clear in that where any amendment was made by the State Government to the Sales-tax Act, by which any sales-tax remittances were deferred under any scheme, it shall be treated as statutory liabilities actually paid and discharged for the purposes of section 43B. For coming to the above conclusion, this Tribunal also elaborately quoted from Circular No. 674 dated 29-12-1993 of the CBDT. Based on the above circular and also the decision of the Hon ble Apex Court in Chowrangee Sales Bureau (P.) Ltd. v. CIT [1973] 87 ITR 542, it was held that there was a discharge of liability to sales-tax when the assessee adopted the sales-tax deferral scheme and converted it into a loan liability payable in five annual instalments with effect from 2010. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any year in respect of loss, expenditure or trading liability incurred by the assessee and subsequently during any previous year, the first mentioned person, i.e., the original assessee has obtained whether cash of any other manner whatsoever any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of the benefit accruing to him shall be deemed to be the profits and gains of business or profession and accordingly chargeable to Income-tax as the income of that previous year, whether the business or profession in respect of which allowance or deduction has been made, is in existence in that year or not. In the instant case, assessee has claimed deduction under section 43B as Board Circular No. 674 read with deferral scheme launched by the State Government and this trading receipt was converted into a loan liability. The total amount of loan liability was not at all paid by the assessee as it was settled under the different schemes launched by SICOM. Since the entire liability was settled and discharge at a lesser amount, the assessee got certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it while giving its finding. If we see the order of the Sales-tax Tribunal, placed at paper book page Nos. 204-210, relevant para 6 runs as under : "We have carefully considered the rival submissions of both the parties. It is seen that appellant has made the premature payment of deferred taxes as per the scheme issued by the department of Industries, Energy and Labour Department of Mantralaya, Mumbai under Package Scheme of incentives 1993. However, the Assessing Officer had not given credit of such payments as such payment is not paid in challan prescribed for payment of sales tax under Bombay Sales Tax Act, 1959. It is observed by the appellate authority that letter dated 26-6-2000 issued by Shri J.S. Pal, General Manager, SICOM Ltd. though scheme announced them is in initial stage and necessary and applicable document will be finalized by them, and as same is not finalized no credit can be given. We find substance in the said finding. We also observed that Trade circular referred to above clearly points out that NPV payment is to be made in challan 25 which is prescribed under Bombay Act, as per the guidelines issued by the Commissioner. So also law provides that sales tax p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax liability was a current liability later converted into a long-term liability and then discharged at a lesser amount. So if the conversion into the long liability through the deferral scheme is ignored, no doubt assessee had paid a much lesser amount against its existing liability. Therefore, whether payment of net present value of future instalments would result in a benefit to the assessee is also highly debatable. The view taken by the Tribunal is therefore a possible one and, if this view is disturbed based on a Misc. Application filed, it would in effect result in a review and not a rectification of mistake. Once the arguments advanced by the assessee before the various authorities are recorded by the Tribunal and thereafter a conclusion reached by the Tribunal, it can only be considered that such arguments and pleadings were indeed considered while reaching such conclusion, though specifically not commented upon or explicitly dealt with in the order, in length. The thought process that took place while disposing of the grounds of the assessee, definitely included the aspects of the two issues viz., Sales-Tax Tribunal Order and benefit in settlement of a future dues at i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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