TaxTMI 
TaxTMI 
2025 (6) TMI 1927
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....ion 143(1) dated 16-07-2019 was passed wherein a demand of Rs. 31,24,800/- was raised by calculating tax at 30% instead of 25%. On filing rectification petitions, orders dated 24-06-2020 and 03-09-2020 were passed by A.O., who accepted that tax has to be computed @ 25% instead of 30%. It is thereafter Assessment Order dated 05-02-2021 was passed u/s 143(3) of the Act, wherein addition of Rs. 2,255/- was made and demand of Rs. 62,50,957/- was raised by calculating tax of 30% instead of 25% without considering that in previous Rectification Orders passed by the AO. 3. Aggrieved against the assessment order, assessee filed appeal before CIT(A) against the tax rate applied in the computation sheet accompanying the Assessment Order. The Ld CIT(A) dismissed the Assessee's appeal after considering the two rectification orders passed by the A.O. and held that the applicable tax rate is 30% instead of 25% since the turnover including excise duty of Rs. 50,61,62,243/- as against turnover of Rs. 48,84,65,642/= claimed by the assessee by observing as follows: "... 5.3.4. I find that the above contention of the appellant is misleading by claiming the actual turnover at Rs. 48,84....
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....oncerned. 5.3.7 About the rectification orders u/s 154 passed in the appellant's case on various dates, I would say that the AO has passed these orders, which are exactly similar in nature in addressing the issue, relying on the mere statement about the turnover in the assessment order dated 15/11/2018 without much analysis of the details and verification of the facts about the issue. Therefore I held these rectification orders u/s 154 of the Act dated 23/06/2020, 24/06/2020 and 03/09/2020 as erroneous herewith and any effect of these orders ceases to exist 5.3.8 In view of the above it is concluded that the turnover of the appellant company exceeds fifty crores rupees for FY 2015-16, thereby CPC has correctly applied the tax rate of 30% for AY 2018-19 in the appellant's case, Hence, ground no 1 and 2 of the appeal are dismissed herewith." 4. Aggrieved against the appellate order, assessee is in appeal before us raising the following Grounds of Appeal : 1. Your Appellant submits that CIT(Appeals) i.e. National Faceless Appeal Centre Delhi erred in passing order by calculating tax at the rate of 30 percent instead of 25 Percent as per the Comput....
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....his case, since the decision relates to Sale Tax Act and is not applicable to provisions of Income-tax Act. Ld Counsel further made following submissions which reads as follows: a) As per the assessee, the turnover for the financial year 2016-17 is Rs. 48.85 crore, which is less than Rs. 50 crores excluding excise duty which is also not disputed by the revenue. But it is alleged by the revenue to include the excise duty as a part of the turnover in pursuance to the provisions of section 145A. b) The provision of section 145A mandates to include the amount of tax, duty, cess or fee (In the case on hand excise duty) in the turnover, while determining the income under the head profits and gains of business or profession. The provision of section 145A was brought under the statute by the Finance (No.2) Act, 1998. The purpose of bringing such amendment in the provision under the law was to avoid the controversy in relation to the inclusion of MODVAT credit relating to opening and closing Inventory which can be verified from the CBDT Circular No.772 of 1998, dated 23- 12-1998. c) From the Circular No. 772 of 1998, dated 23-12-1998, it is transpired that the pur....
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....wo interpretations of a charging provision are possible, then benefit should go to the Assessee. 6. Per contra Ld SR DR appearing for the Revenue supported the orders passed by lower authorities and requested to sustain the addition. 7. We have heard rival submissions and perused the materials available on records including the Paper Book filed by the assessee. The short issue before us is turnover declared by the assessee whether it should be inclusive of excise duty are not so as to find the rate of tax in pursuance to the First Schedule of Finance Act, 2018. This issue was considered by the Assessing Officer in its second Rectification order dated 03-09-2020 by observing as follows: "....2. The assessee has filed an application dated 13.01.2020 for A.Y. 2018-19 stating that it has filed ROI for A.Y 2018-19 on 21.09.2018 showing total income of Rs. 15,95,14,140/- and claimed refund of Rs 61,06,910/-. However, CPC has. processed the ITR vide order passed u/s 143(1) of the Act dated 16.07.2019 with a demand of Rs. 31,24,800/- instead of the refund of Rs. 61,06,910/- The CPC has calculated tax @30% instead of 25% since the turnover of the assessee for FY 2015-16 is le....
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....s. 226.49 crore, which is less than 250 crores excluding excise which is also not disputed by the Revenue. But it is alleged by the revenue to include the excise duty as a part of the turnover in pursuance to the provisions of section 145A of the Act. In this regard, we find pertinent to refer the provision of section 145A of the Act which reads as under: 145A. For the purpose of determining the income chargeable under the head "Profits and gains of business or profession",- (i) the valuation of inventory shall be made at lower of actual cost or net realisable value computed in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145; (ii) the valuation of purchase and sale of goods or services and of inventory shall be adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods or services to the place of its location and condition as on the date of valuation; **** ***** **** Explanation 1.-For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time b....
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....urnover and vice-versa if the assessee follows exclusive method of accounting i.e. that the taxes such as GST, Excise duty etc. collected from customers on behalf of Government is shown under separate account and payment of the taxes to government is debited in such separate account, then the value of taxes should be excluded from the turnover. In the present case, the assessee claimed to have maintained accounts using exclusive method of accounting which is not disputed by the Revenue. Thus, the ICAI does not mandate to include the excise in the amount of turnover as alleged by the Revenue. 12.5 Subsequently, the Finance (No. 2) Act 2019 has brought the provisions in its First schedule stating that tax liability on the corporate assessee shall be 25% of its income provided the turnover does not exceed Rs. 250 crores in the financial year 2016-17. With reference to the financial statement of the assessee for the financial year 2016-17, it is revealed that the turnover of the assessee excluding excise duty stands at Rs. 226,49,17,098/- crores and after inclusion of the excise duty stands at Rs. 255,42,36,561/- only. Accordingly, the revenue while processing the return of in....