The Commissioner Of Income Tax, (Central) Ii,Mumbai v. M/S.parle Beverages Ltd., Mumbai

ttm IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2792 OF 2009 The Commissioner of Income Tax, (Central) II,Mumbai .. Appellant Vs. M/s.Parle Beverages Ltd., Mumbai .. Respondent. Mr.Vimal Gupta for the appellant Mr.P.J.Pardiwala, Sr.Counsel with Mr.Atul K. Jasani for the respondent CORAM: J.P. DEVADHAR & K.K. TATED, JJ.DATE: 15TH SEPTEMBER, 2011. P.C. 1. Two questions of law raised by the Revenue in this appeal read thus: (a) “Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in allowing the appeal of the assessee by directing the Assessing Officer to give relief relating to the addition of Sales-Tax incentive of Rs.1.01 crores in the light of the legal position so settled on the basis of decision of the ITAT Spl. Bench in the case of Reliance Industries Ltd.(88 ITD 273) without appreciating the fact that the decision of the ITAT Spl.Bench in the case of Reliance Industries Ltd. for the A.Y. 1986-87 has not been attained finality; and the ITAT’s decision on the same issue for A.Y. 1985-86 in the case of Reliance Industries has not been accepted by the Revenue and an appeal u/s 260A has been filed before the Hon’ble High Court vide Lodging No.1000/2002 dated 4.12.2002? (b) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in law in deleting the addition of Rs.55 lac on account of non-accounting of Modvat credit by the assessee? 2.As regards the first question, the counsel for the parties state that similar questions raised by the Revenue in the case of Commissioner of Income Tax-3 vs. Reliance Industries Ltd. being Income Tax Appeal No.1299 of 2008 (wrongly numbered as Central Excise Appeal) has been rejected by this court on 15.04.2009. For the reasons stated therein, the first question cannot be entertained. 3.As regards the second question is concerned, the Assessing Officer sought to add the amount of Rs.55 lakhs recorded in the books of the assessee, which represented the modvat credit of the excise duty paid by the assessee on raw materials purchased for manufacture in the final products. The said addition was deleted by the ITAT. 4. It may be noted that as per the Central Excise notification dated 1.10.1987 the assessee was not entitled to avail modvat credit of duty paid on raw materials which are subject matter of this appeal. 5. It is not in dispute that the assessee had challenged the validity of the ITXA2792-09.doc said Central Excise Notification dated 1.10.1987 and this court during the pendency of the Writ Petition permitted the assessee to take into account the modvat credit in the respective year, but not utilise the said modvat credit. The counsel for the assessee informs us that the Writ Petition filed by the assessee has been subsequently dismissed by this court. In these circumstances, though the modvat credit was recorded in the books of the assessee, in view of the Central Excise Notification dated 1.10.1987, the decision of the ITAT in deleting the addition made by the Assessing Officer on the ground that the assessee was not entitled to the Modvat credit amounting to Rs.55 lakhs cannot be faulted. 6. Accordingly, the second question raised by the revenue cannot be entertained.entertained. 7. In the result, the appeal is dismissed. (J.P. DEVADHAR, J.) (K.K. TATED, J.)