Income Tax Appellate Tribunal - Delhi
The Hindustan Times Limited, Delhi vs Assessee on 28 May, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'H
'H' : NEW DELHI
BEFORE SHRI G.D.AGRAWAL,
G.D.AGRAWAL, VICE PRESIDENT AND
SHRI CHANDRA MOHAN GARG,
GARG, JUDICIAL MEMBER
ITA No.3826/Del/2010
No.3826/Del/2010
Assessment Year : 2002-
2002-03
Assistant Commissioner of Vs. M/s The Hindustan Times Limited,
Income Tax, 9th Floor, HT House,
Circle-
Circle-16(1), 18-
18-20, K.G. Marg,
New Delhi. New Delhi - 110 001.
PAN : AAACT4962F.
(Appellant) (Respondent)
ITA No.3380/Del/2010
No.3380/Del/2010
Assessment Year : 2002-
2002-03
M/s The Hindustan Times Vs. Assistant Commissioner of
Limited, Income Tax,
9th Floor, HT House, Circle-
Circle-16(1),
18-
18-20, K.G. Marg, New Delhi.
New Delhi - 110 001.
PAN : AAACT4962F.
(Appellant) (Respondent)
Revenue by : Shri Sameer Sharma, Sr.DR.
Assessee by : Shri Sanat Kapoor, Advocate.
ORDER
PER G.D.AGRAWAL, G.D.AGRAWAL, VP :
ITA No.3826/Del/2010 :-This appeal by the Revenue is directed against the order of learned CIT(A)-XIX, New Delhi dated 28th May, 2010 for the AY 2002-03.
2. The Revenue has raised the following ground :-
"The ld.CIT(A) has erred on facts and in law by deleting disallowance of `92,81,500/- being amount paid towards house tax ignoring the fact that the house tax demand had 2 ITA Nos.3826 & 3380/D/2010 been disputed by the assessee with the NDMC and had been paid under protest."
3. At the time of hearing before us, it was stated by the learned DR that during the course of appellate proceedings, the assessee has stated that out of the total demand raised by NDMC at `92,81,500/-, the disputed demand is only `69,748/-. Learned CIT(A) accepted the assessee's version and sustained the addition to the extent of `69,748/- allowing relief of `92,11,752/-. That the assessee has not produced any documentary evidence in support of its assertion that the disputed demand is only `69,748/-. He, therefore, submitted that the order of learned CIT(A) should be reversed and that of the Assessing Officer should be restored. Alternatively, the matter may be sent back to the Assessing Officer for examining the exact amount of the disputed demand.
4. The learned counsel for the assessee, on the other hand, pointed out that the entire demand of `92,81,500/- was raised by NDMC vide bill dated 24.09.2001. That the said demand is paid by the assessee vide cheque No.035693. However, while forwarding the cheque, the assessee only mentioned 'under protest'. He, therefore, submitted that the entire demand raised by NDMC in respect of the property tax has been duly paid by the assessee and even if the assessee disputed the same, the liability has already accrued. He also stated that the addition sustained by the learned CIT(A) has also been challenged by the assessee in the cross-appeal.
5. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that the issue is squarely covered in favour of the assessee by the decision of Hon'ble Apex Court in the case of Kedarnath Jute Mfg. Co.Ltd. Vs. CIT(Central), Calcutta - [1971] 82 ITR 363 (SC). In the said case, the assessee had disputed the liability of sales tax and, therefore, the same was 3 ITA Nos.3826 & 3380/D/2010 disallowed by the Assessing Officer on the ground that (i) the assessee had contested the liability of sales tax in appeals, and (ii) no provision has been made by the assessee in the books of account. The order of the Assessing Officer was upheld till the High Court. On appeal, Hon'ble Apex Court allowed the assessee's appeal holding as under:-
"That the moment a dealer made either purchases or sales which were subject to sales tax, the obligation to pay the tax arose. Although that liability could not be enforced till quantification was effected by assessment proceedings, the liability for payment of tax was independent of the assessment. The assessee, which followed the mercantile system of accounting, was entitled to deduct from the profits and gains of its business liability to sales tax which arose on sales made by it during the relevant previous year. The assessee was entitled to the deduction of the sum of Rs.1,49,776 being the amount of sales tax which it was liable under the law to pay during the relevant accounting year. That liability did not cease to be a liability because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail."
(emphasis by underlining provided by us)
6. That the ratio of the above decision of Hon'ble Apex Court would be squarely applicable to the case of the assessee. At page 42 of the assessee's paper book, there is a bill of property tax raised by NDMC raising the demand of `92,81,500/- for the FY 2001-02 i.e., relevant to the assessment year under appeal. That the assessee, vide cheque No.035693 dated 11.10.2001, made the payment of entire demand of `92,81,500/-. Thus, we find that the demand of property tax was raised during the accounting year relevant to the assessment year under consideration, it pertained to the previous year under consideration and the payment for the same has also been made during the year under consideration. Now, as per Assessing Officer, the assessee has disputed the demand. Though at the time of hearing before us it is stated by the learned counsel that in the forwarding 4 ITA Nos.3826 & 3380/D/2010 letter only the assessee has mentioned that the demand raised is contrary to law and the assessee is making payment under protest, however, thereafter, the assessee has not challenged the above demand before any court of law. However, in view of the above decision of Hon'ble Apex Court, it is evident that even if the assessee has disputed the liability, it will be no bar in allowing the deduction for the same unless and until the assessee got relief in this regard. It is not in dispute that there was no reduction in liability of property tax during the accounting year relevant to the assessment year under consideration. We, therefore, respectfully following the above decision of Hon'ble Apex Court, hold that the assessee is entitled to deduction for the entire liability of `92,81,500/-. Accordingly, we find no merit in the Revenue's appeal. The same is dismissed. We also allow the disallowance sustained by the learned CIT(A) amounting to `69,748/- thereby allowing ground No.3 of the assessee's cross-appeal.
7. Ground Nos.1 & 2 of the assessee's cross-appeal i.e. ITA No.3380/Del/2010 is with regard to validity of issue of notice under Section 148. However, at the time of hearing before us, it is stated by the learned counsel that if the deduction of liability is allowed on merits, ground Nos.1 & 2 may be treated as not pressed. As we have allowed the entire deduction for liability, ground Nos.1 & 2 of the assessee's appeal are treated as not pressed and rejected as such.
8. In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is partly allowed.
Decision pronounced in the open Court on 31st October, 2013.
Sd/- Sd/-
(CHANDRA MOHAN GARG)
GARG) (G.D.AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 31.10.2013
VK.
5 ITA Nos.3826 & 3380/D/2010
Copy forwarded to: -
1. Revenue : Assistant Commissioner of Income Tax,
Circle--16(1), New Delhi.
Circle Delhi.
2. Assessee : M/s The Hindustan Times Limited,
9th Floor, HT House, 18-
18-20, K.G. Marg,
New Delhi - 110 001.
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar