AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 1225
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....e mobile application as well as a real time alert through SMS, as required by clause 11 of the National Faceless Appeal Scheme (NFAS), so that the order cannot be regarded as served on 28.6.2022, the date of the impugned order and its uploading. It was only later, in December, 2022, while accessing it's account on the Revenue's portal that the assessee became aware of the passing of the impugned order and took immediate steps for filing the appeal. The facts averred per the petition, i.e., non-uploading on the mobile application and non-receipt of the alert, are not contested by the Revenue. Under the circumstances, we have no hesitation in accepting the explanation. The delay was accordingly condoned, and the appeal admitted. This effectively also answers the assessee's Gd. 2 - not pressed before us, assailing the validity of the impugned order on account of its transmission being not as per NFAS; Gd. 1 being general in nature, not warranting any adjudication. 3. The appeal raises two issues, which we shall take up in seriatim. The first and the principal adjustment to the returned income is an addition on account of lapsed liability in respect of refundable deposits. The asses....
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....e, would submit that it represents the Revenue's understanding of the matter. And, that there was, further, no dispute as to the matter under appeal being identical to that for the earlier years, decided by the Tribunal and having since attained finality, pre-empting any further query by the Bench. Secondly, the issue being claimed to be decided by the Tribunal, we shall, where indeed so, be bound to follow the same in view of judicial precedence. Where, however, unable to persuade ourselves to follow the same, the matter is to, stating reasons, be referred for consideration by a larger Bench. 5.2 The first issue before us is, accordingly, qua precedence; it being a common ground during hearing that the issue arising for adjudication on merits, delineated at para 3 above, and toward which we may also reproduce the assessee's relevant Ground, being the only ground qua the impugned addition, i.e., besides para 3.1 of the assessment order, as under: "Lapsed liability on freezer deposit 3.1. In the assessment of earlier years in the case of the assessee, the issue involved is addition made on account of lapsed liability in respect of freezer deposits taken by the a....
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....) Ltd. and Cream Packs (P.) Ltd. (ITA Nos. 654& 655/Coch/2010, dated 25.5.2012), and which in turn again extracts from the Tribunal's order in the assessee's case, also read out during hearing: "7. Since the co-ordinate bench has already taken a view on identical issue, by following the said decision, we hold that the deposits collected from vendors cannot be considered as the income of the assessee so long as the agency agreement continues. Accordingly, we set aside the order of Ld. CIT(A) on this issue in the hands of both the assessees and direct the AO to delete the addition made on this issue in the hands of both the assessees herein". The Tribunal's order for AY 2011-12 and, indeed, that followed by it, is again not the parent order; the latter again referring to and following another order by it's Division Bench in the assessee's case, details of which are not specified. While this clarifies the issue arising for adjudication on merits to be the same as that for the current year, removing the confusion arising due to reference to s. 41(1), clearly inapplicable, by the Tribunal for AY 2014-15, even as it purportedly follows the orders for the earlier years, which ....
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....T.Act in respect of freezer deposit on proportionate basis as lapsed liability. The view taken by the A.O. was confirmed by the CIT(A). 4. Aggrieved, the assessee is in appeal before the Tribunal. The learned AR submitted that the issue in question is decided in favour of the assessee by the order of the Tribunal in assessee's own case in ITA No.199/Coch/2016 (order dated 16.11.2016) for assessment year 2011-2012. 5. The learned Departmental Representative supported the orders of the Income Tax Authorities. 6. We have heard rival submissions and perused the material on record. On identical facts, the Tribunal in assessee's own case (supra) by following the earlier Tribunal order, had held that addition u/s 41(1) of the I.T. Act is not warranted. The relevant finding of the Tribunal for assessment year 2011- 2012 (supra), reads as follows:- "3.4 We have heard the rival parties and perused the material on record. In assessee's own case, the division bench of the Tribunal have decided the matter in favour of the assessee, by following the earlier orders of the Tribunal. The relevant findings of the Tribunal in assessee's own case read as follows: ....
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....cided in favour of the assessee by setting aside the orders of the authorities. Besides, the assessee never treated this as income in the books. The assessee consistently holding it so as the amount attached with a liability to refund. The assessee never admitted this amount as income in the books. Only accrued income arose to the assessee during the relevant previous year also can be brought to tax under the Income-tax provisions which is a settled law. In other words, there must be a debt owned to the assessee and until this is created in favour of the assessee as a debt due to the assessee, it cannot be said as income accrued. Hence, the decision relied by the Jr. D.R. in the case of CIT vs. T.V. Sundaram Iyengar and Sons cited supra, is clearly distinguishable on facts. In that case, assessee itself admitted this as income as per the book entries. Hence, it is distinguishable. The decision relied by the ld. counsel for the assessee in the case of CIT vs. Realest Builders and Services Ltd. - 307 ITR 202 (SC) in addition to the following cases - (a) Siddheswar Sahakari Sakhar Karkhana Ltd. vs. CIT & Others - 270 ITR 1 (SC); (b) Bharat Petroleum....
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....the same is confirmed. 7. In the result, all the appeals filed by the revenue stand dismissed." 3.5 Admittedly, the issue in question is covered in favour of the assessee by the order of the division bench of the Tribunal, cited supra. Both the parties have submitted that the issue is pending for adjudication before the Hon'ble jurisdictional High Court. No contrary High Court judgment has been cited. Hence, respectfully following the order of the division bench of the Tribunal, in assessee's own case (supra), we uphold the order of the first appellate authority as correct and in accordance with law and no interference is called for. It is ordered accordingly." 7. Though the above order of the Tribunal was challenged by the Revenue before the Hon'ble High Court of Kerala, it is confirmed that the Revenue has withdrawn the appeal pending before the Hon'ble High Court on account of low tax effect. Since the Tribunal has decided the issue in favour of the assessee, we delete the addition made u/s 41(1) of the I.T. Act. It is ordered accordingly." (emphasis, ours) Why we wonder the parent order, which is, as stated, in the assessee's own case, not adduced,....
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....allowed to the assessee in the computation of its business income, i.e., upon the liability in its respect, inter alia, ceasing. True, mere non-mention or wrong mention of the provision of law, as long as there is power for the relevant action, would not defeat it in law. The principle has no application here inasmuch as the finding is rather to the contrary, i.e., of a provision being not applicable. It is nobody's case that the section cited in the 'precedent' is wrong, nor could be inasmuch as, as afore-noted, there is nothing therein (or in the orders further relied upon) stating the reason for the non-maintainability of the applicable provision, i.e., s. 28(i). 5.4 Continuing further, even as we have, in the absence of any reason for it's decision, i.e., of accrual of income being only on the termination of the agreement, stated of absence of a ratio decidendi, which only constitutes the judicial precedent and is binding (Sree Bhagavathi Textiles Ltd. v. CIT[2000] 244 ITR 496 (Ker)), it is, strictly speaking, not the case. Though generally regarded as it's ratio, the reason for the decision, absent in the instant case, may not necessarily be the ratio of a decision, whic....
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....refundable deposits, to secure the assessee's interest, are accepted from it's dealer by the assessee on provision of equipment to them, which is though subject to depreciation. Though refundable only on termination of the agreement, the amount refundable reduces at a definite rate for each year (or part thereof) of the agreement, corresponding with the rate of depreciation, i.e. @25% p.a. The amount refundable thus reduces at a defined rate each passing year. This ascertained reduction in the amount refundable and, thus, the ceasing of the assessee's liability qua deposit is regarded as it's income by Revenue. How, one wonders, being axiomatic, could that be disputed, signify as it does the right to receive, case law on which is legion, viz. Keshav Mills Ltd. vs. CIT (1953) 23 ITR 230 (SC) Turner Morrison & Co. Ltd. v. CIT [1953] 23 ITR 152 (SC) E.D.Sassoon & Co. Ltd. v. CIT[1954] 26 ITR 27 (SC) Morvi Industries Ltd. v. CIT[1971] 82 ITR 835 (SC) R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC) CIT v. Excel Industries Ltd. [2013] 358 ITR 295 (SC) The amount having been already received, income arises to that extent; the ....