ACIT, Jaipur V. RAJASTHAN STATE BEVERAGES CORPORATION LTD., Jaipur

ITA 1000/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5230 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLLY AGARWAL
• Assessee Lawyers: B M DASOT; AJAY JAIN C AS DHK
• Keywords: Business expenditure
• Section: 43B; 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 1000/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S. RAJASTHAN STATE BEVERAGES CORPORATION LTD., 1 ST FLOOR, D-BLOCK, VITTA BHAWAN, JANPATH, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCR 9522 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLLY AGARWAL (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.M. DASOT & SHRI AJAY JAIN (C.AS.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15.06.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 17/06/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD.CIT(APPEALS)-2, JAIPUR DATED 28.10.2015 PERTAINING TO A.Y. 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE DISALLOWANCE OF THE PAYMENT OF PRIVILEGE FEES OF RS . 52.00 CRORES MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT S AID PAYMENT WAS APPLICATION OF INCOME OR APPROPRIATION OF PROFI T AND ALSO THE FACT THAT THESE EXPENSES ARE OF CAPITAL NATURE. (II)(A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND IN LAW, THE LD.CIT (APPEALS) HAS ERRED IN DELETING ADDITION OF RS. 1,87,286/- MADE FOR DEPOSITING THE EMPLOYEES CONTR IBUTION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE ACTS. 2 ITA NO. 1000/JP/2015 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN. LTD. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD. CIT (APPEALS) HAS ERRED IN HOLDING THAT EMPLOYEES CONTRIBUTION TO PF ARE GOVERNED BY THE P ROVISION OF SECTION 43B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(2 4)(X) OF I.T. ACT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) THE AO VIDE ORDER DATED 31.12.2014 DISALLOWED THE PRIVILEGE FEE PAID TO STATE GOVERNMENT OF RAJASTHAN, WHICH HAS BEEN CLAIMED BY THE ASSESSEE A S BUSINESS EXPENDITURE. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED APP EAL BEFORE LD. CIT (A), WHO AFTER DETAILED DISCUSSION OF THE MATTER, ALLOWED THE CLAI M OF THE ASSESSEE. 3. NOW THE REVENUE IS IN APPEAL BEFORE US. 4. GROUND NO. (I) RELATES TO DELETION OF DISALLOWAN CE OF PAYMENT OF PRIVILEGE FEES OF RS. 52 CRORES PAID TO STATE GOVERNMENT OF RAJAST HAN. 4.1. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE ITAT JAIPUR IN ASSESSEES OWN CASE IN ITA NOS. 901/JP/2009 FOR THE A.Y. 2006-07, 540/JP/2011 FOR THE A.Y. 2007-08, 166/JP/2012 FOR THE A.Y. 2008-09, 968/JP/2013 FOR THE A.Y. 2010- 11 AND 795/JP/2014 FOR THE A.Y. 2011-12. HE, THERE FORE, REQUESTED THAT THE ORDER OF LD. CIT (A) BE CONFIRMED. 3 ITA NO. 1000/JP/2015 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN. LTD. 4.2. THE LD. D/R, HOWEVER, SUPPORTED THE ORDER OF T HE AO, INSISTED TO SET ASIDE THE FINDING OF LD. CIT (A) ON THIS GROUND AND RESTORE T HE ORDER OF THE AO. 4.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE L D. CIT (A) HAS DECIDED THIS ISSUE IN PARA 2.4. OF HER ORDER WHICH READS AS UNDER :- 2.4. I HAVE PERUSED THE FACTS OF THE CASE, ASSESSM ENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THIS ISSUE HAS ALSO A RISEN IN THE CASE OF THE APPELLANT IN A.Y. 2006-07, 2007-08, 2008-09, 20 09-10, 2010-11 AND 2011-12. THIS ISSUE IS COVERED IN FAVOUR OF THE APPELLANT BY THE ORDERS OF THE ITAT JAIPUR AND CIT (A)-II, JAIPUR. I N A.Y. 2006-07 AND 2007-08, THE ITAT (IN ITA NO. 901/JP/2009, DATED 20 .8.2010 FOR A.Y. 2006-07 AND IN ITA NO. 540/JP/2011 DATED 21.10.2011 FOR A.Y. 2007- 08 RESPECTIVELY) HAVE HELD THAT PRIVILEGE FEES PAID BY THE ASSESSEE TO THE GOVT. OF RAJASTHAN IS ALLOWABLE AS REVENUE EXPE NDITURE. IN A.Y. 2008-09, 2009-10, 2010-11 AND 2011-12, THE CIT (A) -II, JAIPUR HAS ALSO HELD THE ABOVE EXPENDITURE TO BE REVENUE IN NA TURE. THE FACTS OF THIS YEAR ARE SIMILAR TO THE FACTS OF THE ABOVE YEA RS. FOLLOWING THE ABOVE JUDGMENTS OF ITAT, JAIPUR AND CIT (A)-II, JAI PUR, PRIVILEGE FEES OF RS. 52,00,00,000/- IS HELD TO BE ALLOWABLE AS RE VENUE EXPENDITURE. THE ABOVE ADDITION MADE BY THE ASSESSING OFFICER IS , THEREFORE, NOT UPHELD. THE GROUND OF APPEAL IS ALLOWED. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF COOR DINATE BENCH IN ITA NO. 901/JP/2009, DATED 20.8.2010 FOR A.Y. 2006-07 AND I N ITA NO. 540/JP/2011 DATED 21.10.2011 FOR A.Y. 2007-08, WE AFFIRM THE ORDER OF LD. CIT (A) AND THE GROUND OF THE REVENUE IS HEREBY REJECTED. 5. GROUND NO. (II)(A) & (B) RELATES TO DELETION OF ADDITION OF RS. 1,87,286/- ON ACCOUNT OF LATE DEPOSIT OF EMPLOYEES CONTRIBUTION TO PF AND ESI. 5.1. ON PERUSAL OF THE TAX AUDIT REPORT AND BALANCE SHEET, THE AO NOTICED THAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUT ION TO PF AND ESI BEYOND THE 4 ITA NO. 1000/JP/2015 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN. LTD. PRESCRIBED TIME LIMITS, WHICH IS NOT IN ACCORDANCE WITH LAW. ON BEING ASKED TO EXPLAIN THE LATE DEPOSIT OF THE CONTRIBUTION, THE A SSESSEE EXPLAINED THAT THESE SUMS HAVE BEEN PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME AND HENCE ALLOWABLE AS DEDUCTION. THE AO COULD NOT FIND THE EXPLANATION AC CEPTABLE AND THUS DISALLOWED RS. 1,87,286/- AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), WHO A LLOWED THE A CLAIM OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HONBLE J URISDICTIONAL HIGH COURT RENDERED IN THE CASE OF JAIPUR VIDHYUT VITHRAN NIGAM LTD., 2 65 CTR 62 (RAJ.) AND CIT VS. STATE BANK OF BIKANER & JAIPUR (2014) 99 DTR 131 (R AJ.) AND OTHER CASE LAWS ON THE ISSUE. 6. NOW THE REVENUE IS IN APPEAL BEFORE US. 6.1. THE LD. D/R SUPPORTED THE ORDER OF AO AND REQU ESTED TO SET ASIDE THE ORDER OF LD. CIT (A) AND RESTORE THE ORDER OF AO. 6.2. ON THE OTHER HAND, THE LD. A/R SUPPORTED THE O RDER OF THE LD. CIT (A) AND REITERATED THE SUBMISSIONS AS ARE MADE IN THE WRITT EN SUBMISSION. 6.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE COORDINATE BENCH OF THE TR IBUNAL IN ITA NO. 166/JP/2012 BY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT, 213 CTR 268 (SC) HAS DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE. THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASES OF JAIPUR VIDHYUT VITHRAN NIG AM LTD., 265 CTR 62 (RAJ.) AND CIT VS. STATE BANK OF BIKANER AND JAIPUR (2014) 99 DTR 131 (RAJ.). IN THE LIGHT OF 5 ITA NO. 1000/JP/2015 ACIT VS. RAJASTHAN STATE BEVERAGES CORPN. LTD. ABOVE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT (A), WHICH IS HEREBY AFFIRMED. THE GROUND OF THE REVENUE IS REJECTED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 17/06/2016 . SD/- SD/- VH-VKJ-EHUK] ( DQY HKKJR ) ( T.R. MEENA) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 17/06/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR. 2. THE RESPONDENT- M/S. RAJASTHAN STATE BEVERAGES C ORPORATION LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1000/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR