2012 (9) TMI 1248 - AT - Income Tax

Tribunal Upholds CIT(A)'s Decision, Deletes Rs.2.44 Crore Sales Tax Addition, Consistent with Prior Rulings.

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to delete the addition of Rs.2,44,70,672/- related to the deferment of sales ... Deductibility of sales tax deferment under section 43B - Disallowance under section 43B for unpaid sales tax collected - Deletion of addition made on account of sales tax deferment - Followed precedent in assessee's own caseDeductibility of sales tax deferment under section 43B - Disallowance under section 43B for unpaid sales tax collected - Followed precedent in assessee's own case - Deletion of the addition of Rs.2,44,70,672 made on account of sales tax deferment was sustained and the Revenue's appeal was dismissed. - HELD THAT: - The assessing officer treated sales tax of Rs.2,44,70,672 (out of sales tax collected) as unpaid and invoked the provisions of section 43B to disallow the amount. The first appellate authority deleted the disallowance following an earlier Tribunal decision in the assessee's own case. The Tribunal, after hearing parties, noted that in the assessee's own earlier appeals the issue had been decided in favour of the assessee and accordingly dismissed the Revenue's ground for the current year, thereby upholding the deletion made by the CIT(A). [Paras 4, 5]The Revenue's appeal is dismissed and the deletion of the addition on account of sales tax deferment is upheld.Final Conclusion: The Tribunal dismissed the Revenue's appeal and sustained the deletion of the addition made for sales tax deferment, following precedent in the assessee's own earlier decisions. Issues involved: Appeal filed by Revenue challenging deletion of addition on account of deferment of sales tax.Summary:The appeal was filed by the Revenue against the order of the ld.CIT(A)-XI, Ahmedabad dated 15.06.2010. The main issue was the addition of Rs.2,44,70,672/- on account of deferment of sales tax. The assessee-company was involved in manufacturing and trading of various products including starch, tapioca, chemicals, maize grain, and allied products. The AO noted that the assessee had shown a sales tax liability of Rs.14,54,26,795/- under 'sales tax deferment' and that Rs.2,44,70,672/- of this liability remained unpaid. The AO invoked section 43B of the Act to tax this amount. The ld.CIT(A) decided in favor of the appellant based on a previous Tribunal decision in the appellant's own case for an earlier assessment year. The Tribunal, following past decisions, dismissed the Revenue's appeal, upholding the deletion of the addition on account of sales tax deferment.In conclusion, the Tribunal dismissed the appeal of the Revenue, affirming the decision to delete the addition related to the deferment of sales tax.