repute logistics private ltd chennai vs ito, income tax act, … · 2019-05-30 · inturi rama rao...
TRANSCRIPT
30/05/2019 Riverus
https://incometax.riverus.in/caseview/Repute_Logistics_Private_Ltd_Chennai_vs_ITO%2C_Corporate_Ward-5(4)_Chennai/YXBwZWFsSWQ9NzE2Mzc1JmZ… 1/3
Chennai ITAT
MembersN. R. S. Ganesan
Inturi Rama Rao
Lawyers (Assessee)T. Vasudevan
Timeline
ITAT CHENNAI
31 Aug 2017
Case �led
16 Nov 2017
Hearing
25 Jan 2018
Listed for
hearing
21 May 2019
Judgement
Repute Logistics Private Ltd Chennai vs ITO,Corporate Ward-5(4) Chennai
21.05.2019 ITA 2120 / CHNY / 2017
Text Highlight ǥ
Issues & Grounds of
appeal
Arguments Holding &
Outcome
Limited, Alwarpet, This is an appeal �led by the Assessee
directed against the order of the Commissioner of Income Tax
(Appeals)-3, Chennai
(‘CIT(A)’ for short) dated 31.05.2017 for the Assessment Year
(AY)
2. The Assessee raised the following grounds of appeal:
1. The order of the Commissioner of Income Tax (Appeals)-3,
Chennai, dated 31.05.2017 in IT No. 23/16-17/A-3 for the
Assessment Year 2013-14 is contrary to law, facts, and in the
circumstances of the case.
2. Disallowance of Write o� of input credits of VAT
Rs.7,02,977/- and Service Tax Rs.5,52,670/- under the
nomenclature Bad Debts - Total Rs.
12,55,647/-.
2.1The CIT (Appeals) failed to appreciate the Appellant's
submission explaining the reasons for which it has been
necessitated for the appellant to write o� the VAT and Service
Tax Input credit to the extent of Rs.
2.2The CIT (AppeaIs) is not justi�ed in stating that the input
credits write o� are, "only bene�t that is available to the
appellant could not be availed by it".
2.3The CIT(A)ought to have appreciated that the purchases
mad and debited to the Pro�t and Loss account are after netting
o� of the input credits (Invoice Value less VAT / Service Tax
availed as input credit), hence the purchases are lower to the
extent of the input credits claimed, which has never
Loss account and being carried in the Balance Sheet as an Asset.
2.4The CIT (AppeaIs) failed to appreciate that the write o� of
input tax credits are the taxes on the purchases made and borne
by the appellant, hence claimed as expenditure now, which was
not part of the purchases cost earlier
Law Referred
Income Tax Act, 1961
Section 143(3)
Case Map
This case refers to:
Ncs Distilleries Pvt. Ltd. Hyderabad
Vs Ito Ward-16(2) Hyderabad
SEARCH HOME COURTS SUPERSEARCH PROFILE OJASWI
INDAP -
30/05/2019 Riverus
https://incometax.riverus.in/caseview/Repute_Logistics_Private_Ltd_Chennai_vs_ITO%2C_Corporate_Ward-5(4)_Chennai/YXBwZWFsSWQ9NzE2Mzc1JmZ… 2/3
2.5The CIT (Appeals) wrongly understood the facts and not
justi�ed in stating that "the appellant was allowed deduction
and only the bene�t b way of input credit available could not be
availed by the appellant due to time limit of time or by
operation of law". The CIT (Appeals) failed to appreciate the
fact that these input credits have never been claimed as
expenditure by the appellant.
3. The appellant craves leave to �le additional
ground/arguments at the time of hearing.
3. The brief facts of the case are as under:
The appellant namely M/s.Repute Logistics Private Limited is a
company incorporated under the provisions of the Companies
Act, 1956. It is engaged in the business of providing logistics
services. The return of income for the AY 2013-14 was �led on
30.09.2013 disclosing total income of Rs.61,90,380/-. Against
the said return of income, the assessment was completed on
02.03.2016 by the Income Tax O�cer, Corporate Ward 5(4),
Chennai passed u/s. 143(3) of the
Income Tax Act, 1961 (for short ‘the Act’) declaring total
income of Rs.75,95,399/- after making disallowance to the
tune of E14,05,513/- under the following heads.
i) Bad debts disallowed : Rs.12,55,647/- ii) Van accident
expenses : Rs. 68,945/- iii) Disallowance u/s.43B : Rs.
80,421/-
4. Being aggrieved by the above additions, an appeal was
preferred before ld. CIT(A), who vide impugned order had
allowed the van accident expenses of E68,945/- and interest on
service tax E 80,421/-. However, con�rmed the addition on
account of VAT input written o� of E12,55,647/-.
5. Being aggrieved, the appellant is in appeal before us. It is
submitted that VAT component of the purchase is debited to
VAT input account and the said VAT input credit had lapsed.
Therefore this was claimed as bad debts as it is written o� in
the books of accounts which should be allowed as deduction as
in the year of purchases, all the purchases are reduced to the
extent of input credits. Alternatively, it was submitted that this
should be allowed as business loss u/s.37 of the Income Tax
Act, 1961 (in short ‘’the Act]. Ld. Authorised Representative
relied on the decision of Hyderabad Bench of the Tribunal in
the case of M/s. NCS Distilleries P. Ltd vs. ITO in ITA
No.699/Hyd/2012, dated 19.09.2014.
6. On the other hand, the ld. Sr. Departmental Representative
placed reliance on the orders of lower authorities
7. We heard the rival submissions and perused the material on
record. The issue arising in the present appeal is in respect of
deduction claimed on account of VAT Input credit and Service
tax input credit written o� in books of accounts claimed as bad
debts as the claim had lapsed. Admittedly, this input credit was
not debited as a part of purchase cost, it was lying in advance
account of the asset side of the balance sheet. Submission of
SEARCH HOME COURTS SUPERSEARCH PROFILE OJASWI
INDAP -
30/05/2019 Riverus
https://incometax.riverus.in/caseview/Repute_Logistics_Private_Ltd_Chennai_vs_ITO%2C_Corporate_Ward-5(4)_Chennai/YXBwZWFsSWQ9NzE2Mzc1JmZ… 3/3
the assessee is that the amount cannot be availed on account of
lapse of the credit and the same should be allowed as bad debts.
We are afraid that this submission of the appellant cannot be
accepted for the reason that in order to allow bad debts as
deduction, necessary condition is that it should have formed
part of the income in the earlier years, which does not stand
satis�ed in the present case. As regards to the alternative
submission that the same should be allowed as business loss,
the onus lies upon the assessee to prove that the claim had
lapsed during the previous year relevant to assessment year.
Unless and otherwise crystallization liability is established the
same cannot be allowed as business loss.
8. In the result, the appeal �led by the assessee is dismissed.
Order pronounced on 21st day of May, 2019, at Chennai.
Terms and conditions Privacy policyCopyright ©2019. Riverus Technology Solutions Pvt. Ltd. All Rights
Reserved.¯ ģ [email protected]
SEARCH HOME COURTS SUPERSEARCH PROFILE OJASWI
INDAP -