Income Tax Appellate Tribunal - Mumbai
Parle Soft Drinks P.Ltd , vs Assessee on 11 July, 2014
आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ 'जे' मुंबई
IN THE INCOME TAX APPELLATE TRIBUNAL
"J" BENCH, MUMBAI
श्री सुंजय अरोडा, ऱेखा सदस्य एवुं श्री अममत शक्ऱा, न्याययक सदस्य के समक्ष
BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND
SHRI AMIT SHUKLA, JUDICIAL MEMBER
विविध आिेदन सं. / M.A. no.101/Mum./2014
(आमकय अऩीर सं. / ITA no. 5284/Mum./2001)
(ननधधायण िर्ा / Assessment Year : 1998-99)
Parle Soft Drinks Pvt. Ltd.
....................... अऩीरधथी /
Western Express Highway
Andheri (E), Mumbai 400 099 Appellant
फनधभ v/s
Jt. Commissioner of Income Tax
................... प्रत्मथी /
Special Range-6, Aayakar Bhavan
101, M.K. Road, Mumbai 400 020 Respondent
स्थधमी रेखध सं./ Permanent Account Number - AAACP420J
ननधधारयती की ओय से / Assessee by : Mr. R.R. Vora a/w
Mr. Ankit Kochar
यधजस्ि की ओय से / Revenue by : Mr. B. Yadgiri
सन
ु िधई की तधयीख / आदे श घोर्णध की तधयीख /
Date of Hearing - 04.07.2014 Date of Order - 11.07.2014
आदे श / ORDER
अममत शक्ऱा, न्याययक सदस्य के द्वारा /
PER AMIT SHUKLA, J.M.
This miscellaneous application is arising out of Revenue's appeal being ITA no.5284/Mum./2001, for assessment years 2006-07.
2. The main contention of the assessee raised in this misc. application is that, while deciding ground no.5, in Revenue's appeal, Parle Soft Drinks Pvt. Ltd.
2the Tribunal has held that the issue of liability of tax under section 115JA, has become purely academic as the overall issue of taxability of compensation received by the assessee is not taxable as it is capital receipt and it is also not taxable as capital gain and, therefore, no addition on this ground can be made in book profit.
3. Before us, the learned Counsel, Mr. Rajan Vora, on behalf of the assessee, submitted that during the course of hearing, the assessee had submitted a copy of the Tribunal order in case of Distillery Sales Ltd., ITA no.6571/Mum./2002, wherein, on similar issue, the Tribunal has decided the issue of section 115JA, in favour of the assessee and, therefore, this matter should have been decided in a similar manner. In any case, he submitted that the findings given by the Tribunal in Para-48, needs to be clarified so that there remains no ambiguity, while interpreting the issue of book profit under section 115JA.
4. The learned Departmental Representative, on the other hand, submitted that once the issue of taxability of the receipts which is the subject matter of addition in the book profit under section 115JA, has been decided, then the Tribunal has rightly held that the issue raised in section 115JA, becomes purely academic. Any further findings on merits will amount to review of the earlier decision.
5. We have heard the rival submissions and perused the material placed on record. The assessee has received net compensation of ` 15,95,82,500, from Coca Cola Company towards breach of ROFR agreement. The assessee has treated it as a capital receipt and has credited to capital reserves in the Balance Sheet i.e., it has not been taken to Profit & Loss account. Since the Assessing Officer held that the compensation received from Coca Cola Company is a taxable receipt by treating it to be a revenue receipt, he, therefore, made the Parle Soft Drinks Pvt. Ltd.
3addition while computing the book profit under section 115JA also. The learned Commissioner (Appeals), on the other hand, held that such a compensation received by the assessee is to be taxed as long term capital gain and, therefore, it does not constitute book profit under section 115JA. Besides this, he also held that the income computed by the Assessing Officer under section 115JA is less than the total income computed under the normal provisions of the Act, hence, this issue is not relevant. The Tribunal, while considering bunch of cases including that of the assessee, held that the compensation received by the assessee is not taxable, as the same constitutes capital receipts and further it is also not taxable as long term capital gain. Thus, the entire addition made on this score was deleted. It was in this context the Tribunal while adjudicating ground no.5, relating to similar addition in book profit under section 115JA, in Revenue's appeal held as under:-
"48. Since we have already decided the issue in favour of the assessee that the amount received by the assessee is not a capital gain but a capital receipt, which is not taxable and, hence, such a ground becomes purely academic."
6. Since the subject matter of dispute with regard to computation of book profit under section 115JA, was the addition on account of compensation amount of ` 15,95,82,500, which itself was deleted by the Tribunal, therefore, in that context, it was observed by the Tribunal that the issue of section 115JA, becomes purely academic. In any case, the amount of compensation has been held to be capital receipt not chargeable to tax and the said amount has not routed through Profit & Loss account but directly credited to capital reserve, therefore, the same cannot be included while computing the book profit under section 115JA. There is no requirement of further adjudicating the issue on merits or on the scope of section 115JA in the present appeal. We are Parle Soft Drinks Pvt. Ltd.
4unable to understand as to what clarification / ajudication is required as contended by the assessee in the present application. Thus, the misc. application filed by the assessee is disposed off in the manner indicated above.
7. ऩरयणधभत् ननधधारयती की विविध आिेदन खधरयज की जधती है ।
7. In the result, assessee's miscellaneous application is dismissed.
आदे श की धोर्णध खर ु े न्मधमधरम भें ददनधंक् 11 July 2014 को की गई ।
th Order pronounced in the open Court on 11th July 2014 Sd/- Sd/-
सुंजय अरोडा अममत शक्ऱा
ऱेखा सदस्य न्याययक सदस्य
SANJAY ARORA AMIT SHUKLA
ACCOUNTANT MEMBER JUDICIAL MEMBER
मुंबई MUMBAI, ददनाुंक DATED: 11th July 2014
आदे श की प्रनतलरवऩ अग्रेवर्त / Copy of the order forwarded to:
(1) ननधधारयती / The Assessee;
(2) यधजस्ि / The Revenue;
(3) आमकय आमुक्त(अऩीर) / The CIT(A);
(4) आमकय आमुक्त / The CIT, Mumbai City concerned;
(5) विबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / The DR, ITAT, Mumbai;
(6) गधर्ा पधईर / Guard file.
सत्मधवऩत प्रनत / True Copy
आदे शधनस
ु धय / By Order
प्रदीऩ जे. चौधयी / Pradeep J. Chowdhury
िरयष्ठ ननजी सधचि / Sr. Private Secretary
उऩ / सहधमक ऩंजीकधय / (Dy./Asstt. Registrar)
आमकय अऩीरीम अधधकयण, भुंफई / ITAT, Mumbai