IN INCOME TAX APPELLATE TRIBUNAL BENCH : CHENNAI [BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER] ./I.T.A.No.1957/Mds/2016 /Assessment year : 2012-13 Dy. Commissioner of Vs. Coimbatore District Co- Income Tax operative Milk Producers Union Ltd Non-Corporate Circle 4 Pachapalayam Coimbatore Kalampalayam Post, Perur Via Coimbatore 641 010 [PAN AAAAT 7787 L] ( /Appellant) ( /Respondent) / Appellant by : Mrs. Jayanthi Krishnan, CIT /Respondent by : Shri N. Vijayakumar for Shri K. Raghu, CA /Date of Hearing : 15-09-2016 /Date of Pronouncement : 23-09-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: This appeal of Revenue is directed against order of Commissioner of Income-tax (Appeals)-3, Coimbatore, dated 29.3.2016 in I.T.A.No.125/15-16 to assessment year 2012-13 passed u/s 143(3) and 250 of Income-tax Act, 1961(in short Act). 2. Revenue has raised following grounds: :- 2 -: ITA No. 1957/16 1. order of Learned CIT(A) is not acceptable on facts and circumstances of case. 2. Learned CIT(A) has erred in law, in allowing provision for liability for purchase. 3. Learned CIT(A) ought to have observed that it is not ascertained liability but is contingent upon happening of event. 4. Learned CIT(A) failed to appreciate fact that unless and until increase in procurement price is approved by Commissioner of Milk Production & Diary Development, liability is unascertained and is not crystallized. 5. Learned CIT(A) has ought to have observed that it is reported by internal audit of society that in order to avoid huge income tax liability, portion of profit had to be apportioned to milk suppliers in form of provision 6.For these reasons and other grounds that may be adduced at time of hearing, order of learned CIT(A) may be cancelled and that of Assessing Officer be restored. 3. Brief facts of case are that assessee is co- operative society and in business of milk production. It had filed its return of income electronically on 27.9.2012 declaring NIL income. Subsequently, case was selected for scrutiny under CASS and notice u/s 143(2) was issued. In compliance to notice, ld. Representative for assessee appeared from time to time and filed audited Profit & Loss Account, Balance Sheet, TDS schedule and tax audit report. During course of assessment proceedings, Assessing Officer found that assessee has disclosed amount of ` 10,02,50,298/- under sundry creditors as relates to amount payable to societies towards additional price. clarification was :- 3 -: ITA No. 1957/16 sought for which ld. Representative submitted that amount represents sum payable to societies who procured milk from farmers and societies in turn pays amounts to farmers who supply milk to society. additional price is to be paid to societies after obtaining approval from Government. proposal was sent to Government through Board constituted by District Collector as Special Officer. Assessing Officer was of opinion that as per Form 3CD, assessee society is following mercantile system of accounting and expenses accrued to assessee had to be claimed in Profit & Loss Account and they are ascertainable. Whereas additional price payable by assessee debited to Profit & Loss Account is in nature of contingent liability. He relied on judgment of Apex Court in case of M/s Indian Molasses Company Ltd vs CIT, 37 ITR 66. Assessing Officer considered submissions of ld. AR that in assessee s own case for assessment year 2009-10 in I.T.A.No. 60/Mds/2013 Tribunal vide order dated 11.4.2013 has dismissed Revenue s appeal and operating portion of order was reproduced in assessment order. Assessing Officer made finding that since Department has not accepted order of Tribunal and appeal has been filed before Jurisdictional High Court which is pending. With :- 4 -: ITA No. 1957/16 these observations, Assessing Officer made addition of `10,02,50,298/- and passed order u/s 143(3) dated 26.3.2015. 4. Aggrieved by order, assessee filed appeal before CIT(A). In appellate proceedings, ld. AR argued grounds and explained facts and submitted that order of Assessing Officer is opposed to law and unsustainable and amount of ` 10,02,50,298/- shown under sundry creditors cannot be contingent liability. He further submitted that in assessee s own case for assessment year 2009-10, Tribunal has dismissed Revenue s appeal. CIT(A) considered findings of Assessing Officer and submissions of ld.AR and found that assessee has debited said amount in March 2012 under head sundry creditors as additional price to milk supplying societies and this amount is payable for procurement of milk from farmers and this additional price has to be paid after obtaining approval from Government. ld. AR produced copy of approval in appellate proceedings. CIT(A) was of opinion that observations of Assessing Officer that amount was not crystallized and is not ascertained liability cannot be acceptable. CIT(A) has relied on decision of Tribunal in assessee s own case (supra) and deduction was allowed to assessee. :- 5 -: ITA No. 1957/16 5. Aggrieved by order of CIT(A), Revenue is in appeal before Tribunal. Before us, ld. DR argued grounds that CIT(A) has erred in allowing appeal based on order of Tribunal for earlier year and failed to appreciate that liability is unascertained liability and not crystallized. Further, Department has not accepted decision of Tribunal in assessee s own case and appeal has been filed before Jurisdictional High Court and prayed for setting aside order of CIT(A). 6. Contra, ld. AR relied on order of CIT(A) and orders of Tribunal in assessee s own case for earlier assessment years. 7. We have heard rival submissions, perused material on record and judicial decisions. ld. AR s submissions was that amount provided is not contingent liability and ascertained liability and is crystallized. ld. AR reiterated before Assessing Officer and CIT(A) that this amount is payable to societies to procure milk from farmers whereas societies in turn pay above amount to farmers who supply milk to societies and this price represents additional price to be paid to societies after obtaining approval from Government. ld. AR also reiterated other submissions made before lower authorities and relied on order of this Tribunal in assessee s own case for assessment year 2011-12 :- 6 -: ITA No. 1957/16 in I.T.A.No. 2726/Mds/2014 dated 5.2.2015 wherein Tribunal has observed that payment of additional price for procurement of milk is ascertained liability and allowed appeal by observing as under: 4. We have heard submissions made by ld. DR and have perused orders of authorities below. issue in appeal has been recurring in caaes of assessee. Co-ordinate Bench of Tribunal in I.T.A.No. 60/Mds/2013 decided on 11.4.2013 for assessment year 2009-10 has adjudicated issue in favour of assessee by observing that liability is ascertained liability. Bench also considered decision of Tribunal in assessee s own case for assessment year 2008-09 (I.T.A.No. 2002/Mds/2011 decided on 26.11.2012) wherein similar view has been taken. 5. issue in present appeal is identical to one already adjudicated by Tribunal. Tribunal has consistently held that payment of additional price for milk procurement is ascertained liability. Revenue has not brought on record any new fact, evidence or argument to force us to take different decision. We find no reason to deviate from view taken by Co-ordinate Bench. 8. Since facts are similar, respectfully following above order of Tribunal, we dismiss appeal of Revenue. Order pronounced on Friday, 23rd September, 2016, at Chennai. Sd/- Sd/- ( ) ( . ) (CHANDRA POOJARI) (G. PAVAN KUMAR) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /Chennai /Dated: 23rd September, 2016 RD :- 7 -: ITA No. 1957/16 /Copy to: 1. /Appellant 4. /CIT 2. /Respondent 5. /DR 3. ( )/CIT(A) 6. /GF Dy. Commissioner of Income-tax, Non-Corporate Circle 4, Coimbatore v. Coimbatore District Cooperative Milk Producers Union Ltd