M/s Brandix India Apparel India (P) Ltd., Visakhapatnam V. THE DCIT, Visakhapatnam

CO 18/VIZ/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2587 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K SETHI
• Section: 43B

Judgement Text

ITA NO.64/VIZAG/2015 & CO 18/VIZAG/2016 M/S. BRANDIX INDIA PVT. LTD., VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.64/VIZAG/2015 ( / ASSESSMENT YEAR: 2010-11) DCIT, CIRCLE - 5(1), VISAKHAPATNAM VS. M/S. BRANDIX APPAREL INDIA (PVT) LTD., VISAKHAPATNAM [PAN: AACCB6569L ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NO.18/VIZAG/2016 (ARISING OUT OF I.T.A.NO.64/VIZAG/2015) ( / ASSESSMENT YEAR: 2010-11) M/S. BRANDIX APPAREL INDIA (PVT) LTD., VISAKHAPATNAM VS. DCIT, CIRCLE - 5(1), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.K. SETHI, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 20.09.2016 / DATE OF PRONOUNCEMENT : 26.10.2016 ITA NO.64/VIZAG/2015 & CO 18/VIZAG/2016 M/S. BRANDIX INDIA PVT. LTD., VSKP 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST T HE ORDER OF CIT(A)-1, VISAKHAPATNAM DATED 9.12.2014 FOR THE ASS ESSMENT YEAR 2010-11 AND THE CROSS OBJECTION FILED BY THE ASSESS EE IS IN SUPPORT OF THE ORDER PASSED BY THE CIT(A). 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS THE PA YMENT MADE TOWARDS PROVIDENT FUND ACCOUNT AFTER DUE DATE AS PR ESCRIBED UNDER THE PROVIDENT FUND ACT BUT PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED AS 'THE ACT'), ALLOWABLE AS A DEDUCTION OR NOT. 3. THE LD. CIT(A) BY FOLLOWING THE VARIOUS JUDICIAL PRECEDENTS, HE HAS DIRECTED THE A.O. TO ALLOW THE DEDUCTION U/S 43B OF THE ACT. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER : 5. I HAVE CONSIDERED THE SUBMISSIONS MADE. THE ASSE SSEE HAS RAISED VARIOUS GROUNDS BUT THE ISSUE FOR RESOLUTION IS WHE THER THE AMOUNT OF RS.83,98,238/- REPRESENTING EMPLOYEES CONTRIBUTION TO PF WAS ALLOWABLE DEDUCTION, EVEN IT WAS PAID INTO THE PF ACCOUNT BY THE EMPLOYER AFTER THE DUE DATE PRESCRIBED UNDER THE PF ACT BUT BEFORE THE DUE DATE FOR FILING OF THE RETURN OF INCOME U/S.139(1) OF THE INCOME-TAX A CT. THE CONSEQUENT ISSUE IS WHETHER SUCH DISALLOWANCE COULD BE ASSESSE D UNDER THE HEAD OTHER SOURCES, SO AS TO DENY EXEMPTION U/S.10AA IN RESPECT OF SUCH AMOUNT. IT WOULD BE RELEVANT TO REFER TO SOME OF THE JUDICIAL PRONOUNCEMENTS ON THE MAIN ISSUE. ITA NO.64/VIZAG/2015 & CO 18/VIZAG/2016 M/S. BRANDIX INDIA PVT. LTD., VSKP 3 5.1 IT IS NOTED THAT IN THE CASE OF ESSAE TERAOKA (P ) LTD VS. DCIT 43 TAXMANN 33, THE HONOURABLE KARNATAKA HIGH COURT TOO K THE VIEW THAT THE WORD CONTRIBUTION OCCURRING IN SECTION 43B OF THE I. T. ACT WOULD INCLUDE EMPLOYEES CONTRIBUTION TO PF, IN THE LIGHT OF THE D EFINITION OF THE WORD, 'CONTRIBUTION' BY SECTION 2(C) OF P.F. ACT, AS PER WHICH CONTRIBUTION WOULD MEAN BOTH THE EMPLOYERS CONTRIBUTION AND EMPLOYEES CONTRIBUTION. ACCORDINGLY, IT WAS HELD THAT THE PROVISION OF SECT ION 43B ALLOWING DEDUCTION FOR PAYMENT MADE BEFORE THE FILING OF THE INCOME-TAX RETURN CANNOT BE IGNORED. IN THE CASE OF CLI VS. KICHHA SUG AR CO.LTD, 35 TAXMANN 54, THE HONOURABLE HIGH COURT OF UTTARAKHAN D HELD THAT THE DUE DATE REFERRED IN SECTION 36(V)(A) SHOULD BE READ IN CONJUNCTION WITH SECTION 43B(B) OF THE INCOME-TAX ACT, AND THAT DEDU CTION SHOULD BE ALLOWED FOR PAYMENT MADE BEFORE THE DUE DATE FOR FI LING OF THE RETURN OF INCOME. IN THE CASE OF CIT VS. UDAIPUR RAJASTHAN AF TER, REFERRING. TO THE APEX COURT DECISION IN THE CASE OF CIT VS. EXTRUSIO NS LTD (319 ITRA 306) & CIT VS. VINAY CEMENT LTD., HELD THAT THE DEDUCTIO N SHOULD BE ALLOWED FOR THE PAYMENT OF EMPLOYEES CONTRIBUTION MADE BEFO RE THE DUE DATE OF FILING OF RETURN. SIMILARLY IN THE CASE OF CIT VS. STATE BANK OF BIKANER, THE HONOURABLE RAJASTHAN HIGH COURT HELD THAT THE P.F. CONTRIBUTION PAID AFTER THE DUE DATE UNDER THE RESPECTIVE ACT BUT BEFORE FI LING OF THE RETURN OF INCOME U/S.139(1) CANNOT BE DISALLOWED U/S,43B OR U /S.36(1)(V)(A) OF THE INCOME-TAX ACT. SIMILAR VIEWS WERE TAKEN BY THE HONO URABLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIJAY SHREE LTD., 43 TAXMANN 396, THE HONOURABLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARMENDRA SHARMA 297 ITR 328, THE HONOURABLE MADRAS HIGH COURT IN TH E CASE OF CIT VS. NEXUS COMPUTER PVT. LTD., 313 ITR 144 AND THE HONOU RABLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS. NIPSO POL Y FABRIC PVT LTD. THE HONOURBLE ITAT, MUMBAI, PUNE, CHENNAI HAVE TAKEN SI MILAR VIEWS. IN THE LIGHT OF THE ABOVE JUDICIAL PRONOUNCEMENTS, IT IS H ELD THAT THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION OF THE EMPLOYEES CO NTRIBUTION OF R.F. MADE BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S.139(1) OF THE INCOME-TAX ACT. THE ASSESSING OFFICER IS DIRECTE D TO RECOMPUT2 THE TOTAL INCOME ACCORDINGLY. AS THE IMPUGNED AMOUNT IS HELD TO BE ALLOWABLE AS DEDUCTION U/S,43B, THE OTHER ISSUE RELATING TO C LAIM OF EXEMPTION U/S.1OAA BECOMES ACADEMIC. 4. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE L D. CIT(A). THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED . 5. THE CROSS OBJECTION RAISED BY THE ASSESSEE IS TI ME BARRED BY 275 DAYS. NO REASONABLE EXPLANATION IS GIVEN AND NO AF FIDAVIT IS FILED FOR THIS DELAY. THUS, THE SAME IS DISMISSED. ITA NO.64/VIZAG/2015 & CO 18/VIZAG/2016 M/S. BRANDIX INDIA PVT. LTD., VSKP 4 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 TH OCT16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 26.10.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE DCIT, CIRCLE-5(1), VISAKHAPA TNAM 2. / THE RESPONDENT M/S. BRANDIX APPAREL INDIA (P) LTD., PUDIMADAKA ROAD, ATCHUTHAPURAM, VISAKHAPATNAM 3. ) / THE CIT, VISAKHAPATNAM 4. ) ( ) / THE CIT(A)-1, VISAKHAPATNAM, 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM