Shriram Chits(Karnataka)Pvt Ltd, ... vs Assessee
- CitationITA No.1199/Bang/2014
Ratio decidendi
The rule this decision rests on
The Tribunal's reasoning rests on the following principles, in the order the court takes them: Where a coordinate Bench of the Tribunal has decided an identical issue in the same assessee's case for earlier assessment years, and the parties do not dispute that the issue is covered, that decision is to be followed in the later assessment year; a pending appeal against the earlier order before the High Court is not a ground for departing from it, and the Revenue remains free to take appropriate steps should the High Court later decide in its favour. Where the Tribunal has already held, in the same assessee's case for earlier years, that a particular item is not to be interfered with on appeal, and the issue is identical, the Tribunal will respectfully follow that decision and dismiss the appeal on that ground without independent reconsideration of the merits.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s.Shriram Chits (Karnataka) Pvt. Ltd. 259/31, 1st floor, 10th Cross, Wilson Garden, Bangalore-560027. ... Appellant PAN:AACCS2078R
Vs.
Asst. Commissioner of Income-tax, Circle 12(3), Bangalore. ... Respondent
AND
ITA Nos.1293/Bang/2014 (Assessment year: 2009-10)
Deputy Commissioner of Income-tax, Circle 12(3), Bangalore. ... Appellant
Vs.
M/s.Shriram Chits (Karnataka) Pvt. Ltd. Bangalore-560027. ... Respondent
Assessee by: Shri S.Ananthan, CA. Respondent by: Shri T.S.N.Murthy, CIT(DR).
Date of hearing : 19-03-2015. Date of pronouncement: 17-04-2015.
O R D E R
Per ABRAHAM P GEORGE, AM:
These are appeals of the assessee and Revenue
respectively, directed against an order dated 14/06/2013 of
CIT(A)-III, Bangalore, for the impugned assessment year.
ITA No.1199 & 1293/Bang/203 M/s.Shriram Chits (Karnataka), Bangalore. Page 2 of 5
2. Assessee's appeal has been filed late by 382 days.
Assessee has filed a condonation petition, in which it is stated that
appeal papers were, by mistake, filed in the office of the
CIT(ITAT) on 02/09/2013. It is mentioned that this fact came to
the notice of the assessee, when its application for clubbing was
filed on 09/09/2014 pursuant to the hearing notice received on
the Departmental appeal. As per the assessee, it was only at that
point it recognized that the appeal has not been filed in Tribunal
office. Thereupon, without further delay i.e. on 19/9/2014 the
appeal was filed.
3. We find from the affidavit that assessee was under a
bona-fide belief of having filed the appeal in time and the delay
had occurred only due to a mistake of filing in the wrong office. It
was not due to any negligence. We therefore condone the delay
and admit the appeal.
4. Learned counsel for the assessee at the outset itself
submitted that the issues raised by the Department and the
assessee in the respective appeals were covered by the decision
dated 14/08/2013 of this Tribunal in assessee's own case for
assessment years 2003-04 to 2008-09 in ITA Nos.1314, 1315,
1281 & 1282/Bang/2012. Learned Departmental Representative
fairly admitted that the issues were covered by this Tribunal order
mentioned supra.
ITA No.1199 & 1293/Bang/203 M/s.Shriram Chits (Karnataka), Bangalore. Page 3 of 5
5. We have heard the contentions and carefully gone
through the orders. Issue raised by the Revenue in its appeal is
on allowance given by ld.CIT(A) for bid losses incurred on chits.
Similar issue was there before this Tribunal in assessee's own case
for assessment years 2003-04 to 2008-09 mentioned supra,
wherein it was held as under at paras.3 to 5:
"3. The assessee is a company which is engaged in the business of conducting chits. While completing the assessment for the A.Y. 2008-09, the AO held that the bid loss claimed in the memo of income cannot be allowed as a deduction. The Assessee is in the business of conducting chits. The Assessee on its own bids at the auction. When the Assessee succeeds in his bid, the difference between the value of the chit and the amount at which the Assessee bids at the auction is booked as a loss. The remaining tenure of the chit in respect of which the assessee is a successful bidder might extend beyond the previous year. The Assessee books the loss and spreads it over the remaining period of the chit group. In the books of accounts the Assessee books only the loss that is apportioned for the period relevant to the previous year. In the return of income however the loss from own bidding for the whole tenure of the chit group is claimed as a deduction. In the present A.Y. the manner in which the Assessee claimed loss on bidding was as follows:
Profit as per P & L Account Rs.3,24,197
Less:Bid loss accrued during the year Rs.6,47,16,536
Less:Bid loss debited to P & L A/C. Rs.5,96,73,493 Rs.50,43,043
4. The AO allowed the bid loss to the extent debited in the profit and loss account and refused to allow the claim for deduction of the sum of Rs.50,43,043/- which is the bid loss referable to the period beyond the previous year. On appeal by the assessee, the CIT(Appeals) after taking note of the submissions of the assessee on the bid loss and the decision of the Tribunal in assessee's own case in A.Y. 2005-06, deleted the addition made by the AO observing as follows:-
"4.3. I have considered the submissions of the learned counsel for the appellant and the reasons given by the AO in his order for rejecting the claim of Bid Loss. The AO has disallowed the additional bid loss claimed in the computation of income on the grounds that accounting standards 1 & 2 are violated by the practice followed by the appellant, and that the "matching principle" of accounting is ignored. The dispute ITA No.1199 & 1293/Bang/203 M/s.Shriram Chits (Karnataka), Bangalore.
Page 4 of 5 is with regard to the period to which this loss relates. The appellant insists that the claim amount pertains fully to the financial year relevant to this appeal itself, and that the AO is incorrect in understanding the same to pertain to a future period involving the remaining period of the chit.
4.4. I find that the issue has been decided in the appellant's favour for the AY: 2005-06 by my predecessor CIT(A) after due examination of the accounting process involved. This order has been upheld by the ITAT Bangalore in ITA No.1547/B/2010. I see that the issue involved in the present appeal is identical to the one raised for that AY 2005-
06. I also note that no addition was made on this point by the AO for AY 2006-07. With respect to AY: 07-08, the addition made by the AO was deleted by the CIT(A), against which order the department did not file any second appeal before the ITAT. In view of the written submissions of the appellant on this issue, and on a review of the facts of the case, I find that the appellant's claim has merit. The treatment given to the bid loss over the years has been consistent. In the circumstances, I hold that the appellant is entitled to succeed in this point and the AO is directed to allow the sum of Rs.50,43,043/- as Bid Loss as a deduction in computing the total income."
5. As can be seen from the grounds of appeal, the only grievance of the revenue is that the decision of the Tribunal has not been accepted and an appeal has been preferred by the revenue before the Hon'ble High Court. We are of the view that the decision of the coordinate Bench of the Tribunal on an identical issue has to be followed. In the event of any decision by the Hon'ble High Court supporting the view taken by the revenue, the revenue is at liberty to take appropriate steps. Pendency of an appeal before the High Court cannot be a ground not to following the earlier order of the Tribunal. Accordingly, we do not find any merits in the appeal by the revenue and the same is dismissed."
Issue raised by the assessee in its appeal is that foreman's
dividend was considered as taxable income in its hands. Similar
issue was there before this Tribunal in assessee's own case
mentioned (supra) wherein it was held as under at paras.6 to 7:
"6. As far as this appeal is concerned, the grounds of appeal raised by the assessee reads as follows:-
"1. The order of the learned Commissioner (Appeals) is bad in law and against the facts of the case.
ITA No.1199 & 1293/Bang/203 M/s.Shriram Chits (Karnataka), Bangalore.
Page 5 of 5 2. The learned Commissioner of Income tax (Appeals) erred in sustaining the addition on account of Foreman's dividend amounting to Rs.52,09,740/-.
3. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the Foreman's dividend is not taxable on grounds of mutuality.
For all these and other grounds which may be urged at the time of the hearing of this appeal, the appellant prays that its appeal be allowed."
7. It was fairly submitted by the parties before us that in view of the decision of the coordinate Bench in assessee's own case on an identical issue in ITA No.601/Bang/07 for AY 03-04 order dated 23.5.2008, wherein similar was decided issue against the assessee, there are no grounds to interfere with the order of the CIT(Appeals). As a result, the appeal by the assessee is also dismissed."
Respectfully following the above, we dismiss both the appeal of
the Revenue as well as that of the assessee.
Pronounced in the open court on 17th April, 2015.
sd/- sd/- (Rajpal Yadav) (Abraham P.Jeorge) JUDICIAL MEMBER ACCOUNTANT MEMBER eksrinivasulu
Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file By order
Assistant Registrar Income-tax Appellate Tribunal Bangalore
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free