HSBC INVEST DIRECT SECURITIES LTD ( PREVIOUSLY KNOWN AS IL & FS INVESTMENT SECURITIES LTD), MUMBAI V. DCIT 10(1), MUMBAI

ITA 1006/MUM/2011

• Counselvise Citation: 100619914 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 24-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Assessee Lawyers: D V LAKHANI
• Keywords: Question of law
• Section: 43B; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 1006/MUM/2011 (ASSESSMENT YEAR: 2007-08) M/S. HSBC INVEST DIRECT SECURITIES DY. COMMISSIONR OF INCOME (INDIA) LTD . (PREVIOUSLY IL&FS TAX - 10(1), MUMBAI INVESTSMART SECURITIES LTD.) VS. DHANASINGH PROCESSOR PREMISES J.B. NAGAR, ANDHERI (E) MUMBAI 400059 PAN - AABCI4793G APPELLANT RESPONDENT APPELLANT BY: SHRI D.V. LAKHANI RESPONDENT BY: SHRI PITAMBER DAS DATE OF HEARING: 24.03.2014 DATE OF PRONOUNCEMENT: 24.03.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01.12.2010 PASSED BY CIT(A)-21, MUMBAI AND IT PERTA INS TO A.Y. 2007-08. 2. THE APPELLANT MADE PAYMENT OF PROVIDENT FUND OF ` 15,87,729/- AND ESIC OF ` 1,47,862/- BEING EMPLOYEES CONTRIBUTION BEYOND THE SPECIFIED DATE BUT BEFORE THE DUE DATE FOR FILING THE RETURN. THER E WAS A CLEAVAGE OF OPINION OF VARIOUS FORUMS ON THE ISSUE AT THE TIME OF FILIN G THE RETURN OF INCOME AND THEREFORE THE ASSESSEE THOUGHT IT FIT TO DECLARE TH E SAME AS INCOME CHARGEABLE UNDER SECTION 2(24)(X) OF THE ACT BUT IN THE WAKE OF LATER JUDGEMENT OF THE HON'BLE SUPREME COURT THE ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE SAME CANNOT BE TREATED AS INCOME IN THE HANDS OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE PAYMENTS AR E MADE BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME AND THESE FACT S WERE ALREADY ON RECORD BEFORE THE AO. BEFORE THE CIT(A) THE LEARNED COUNSE L FOR THE ASSESSEE HAS ALSO PLACED THE DECISIONS OF VARIOUS BENCHES OF ITA T WHEREIN IT WAS HELD ITA NO. 1006/MUM/2011 M/S. HSBC INVEST DIRECT SECURITIES (I) LTD. 2 THAT IN THE LIGHT OF THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. 319 ITR 306 EMPLOYEES CONTRIBUTION TO PF, ETC. PAID IN THE GOVERNMENT ACCOUNT BEFORE THE DUE DATE FOR FILING T HE RETURN OF INCOME IS ALLOWABLE AS DEDUCTION. HOWEVER, THE LEARNED CIT(A) WAS OF THE OPINION THAT THE ISSUE INVOLVED IN THE CASE OF ALOM EXTRUSIONS L TD. WAS IN RESPECT OF PAYMENTS OF EMPLOYERS CONTRIBUTION AND THERE WAS NO ISSUE OF EMPLOYEES CONTRIBUTION AND THUS HE CONCLUDED THAT THE PAYMENT IS GOVERNED BY THE PROVISIONS OF SECTION 43B R.W.S. 36(1)(VA) OF THE A CT AND THUS THE SAME HAS TO BE TREATED AS INCOME UNDER SECTION 2(24)(X) OF THE ACT. THUS, THE LEARNED CIT(A) OBSERVED THAT THE ADDITIONAL GROUND IS NOT M AINTAINABLE SINCE IT DID NOT EMANATE FROM THE ASSESSMENT ORDER AND CONSEQUENTLY IT IS NOT ALLOWABLE. 3. FURTHER AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEF ORE THE APPELLATE TRIBUNAL CONTENDING, INTER ALIA, THAT THE ISSUE INV OLVED HEREIN IS A PURE LEGAL ISSUE AND THE FACTS BEING ALREADY AVAILABLE ON RECO RD (AS PER THE ANNEXURE TO ANNUAL REPORT THE DATES OF PAYMENT ARE NOT IN DISPU TE) AND THUS THE SAME DESERVES TO BE ADMITTED AND TO BE DECIDED IN FAVOUR OF THE ASSESSEE. HE RELIED UPON THE FOLLOWING DECISIONS OF VARIOUS HIGH COURTS AND ALSO THE ITAT IN SUPPORT OF HIS CONTENTION THAT EVEN IN RESPECT O F EMPLOYEES CONTRIBUTION, SO LONG AS THE PAYMENT IS MADE BEFORE THE DUE DATE FOR FILING THE RETURN, IT IS NOT HIT BY SECTION 43B OF THE ACT AND CONSEQUENTLY IT CANNOT BE ASSESSED TO TAX AS INCOME OF THE ASSESSEE: - I. CIT VS. M/S. KICHHA SUGAR COMPANY LTD. ITA NO. 50 O F 2009 (CALCUTTA HIGH COURT) II. ITO VS. LKP SECURITIES LTD. IOTA NO. 638/MUM/2012 ( MUM) III. CIT VS. AIMIL LTD, DELHI HIGH COURT IV. HARRISONS MALAYALAM LTD. VS. ACIT 32 SOT 497 (COCHI N) V. CIT VS. M.N. CHARI 310 ITR 445 (KARN) VI. CIT VS. P.M. ELECTRONICS LTD. 313 ITR 161 (DEL) VII. CIT VS. ANZ INFORMATION TECHNOLOGY P. LTD. 318 ITR 123 (KARN) VIII. CIT VS. AIMIL LTD. ITA NO. 1603 OF 2009 (DELHI HIGH COURT) HE ALSO SUBMITTED THAT BEING A PURE LEGAL ISSUE THE SAME DESERVES TO BE ADMITTED AND THE LEARNED CIT(A) ERRED IN NOT FOLLOW ING THE DECISIONS OF THE ITAT, WHICH ARE BINDING ON HIM. ITA NO. 1006/MUM/2011 M/S. HSBC INVEST DIRECT SECURITIES (I) LTD. 3 4. ON THE OTHER HAND, THE LEARNED D.R. STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. HE SUBMITTED THAT TH E ASSESSEE HAS OFFERED TO TAX IN THE RETURN OF INCOME AND HENCE THE ASSESSEE COMPANY SHOULD NOT BE PERMITTED TO RAISE THIS PLEA AT A LATER STAGE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. VARIOUS BENCHES OF THE TRIBUNAL AS WELL AS THE HIGH COURTS HAVE CONSISTENTLY TAKEN A VIEW THAT IN THE LIGHT OF THE JUDGEMENT OF THE APEX COUNT IN THE CASE OF VINAY CEMENTS 213 CTR 268 IF E MPLOYEES/EMPLOYERS CONTRITION IS PAID BEFORE THE DUE DATE OF FILING TH E RETURN NO DISALLOWANCE CAN BE MADE UNDER SECTION 43B OF THE ACT. NO CONTRARY D ECISION WAS PLACED BEFORE US ON THIS ISSUE AFTER THE DECISION OF THE A PEX COURT WHICH IN TURN WAS FOLLOWED BY VARIOUS FORUMS AS LISTED ABOVE. CON SISTENT WITH THE VIEW TAKEN THEREIN, WE ARE OF THE VIEW THAT THE ADDITION AL GROUND DESERVES TO BE ADMITTED SINCE IT GIVES RISE TO A PURE QUESTION OF LAW BACKED BY FACTS WHICH ARE ALREADY PLACED BEFORE THE AO. FURTHER, IN THE L IGHT OF THE DECISIONS CITED ABOVE, WE ARE OF THE VIEW THAT THE IMPUGNED PAYMENT S ARE NOT HIT BY SECTION 43B AND CONSEQUENTLY IT CANNOT BE TREATED AS INCOME UNDER SECTION 2(24)(X) OF THE ACT. WE, THEREFORE, DECIDE GROUND NO. 1 & 2 ACCORDINGLY. 6. VIDE GROUND NO. 3 ASSESSEE CONTENDS THAT THE CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. THIS IS CONSEQUENTIAL IN NATURE AND, THEREFORE, WE SET ASID E THIS ISSUE TO THE FILE OF THE AO WHO IS DIRECTED TO ALLOW CONSEQUENTIAL RELIE F TO THE ASSESSEE. 7. GROUND NO. 4 IS GENERAL IN NATURE AND, THEREFORE, D ID NOT REQUIRE ANY ADJUDICATION. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE COM PANY IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH, 2014. SD/- SD/- (RAJENDRA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 24 TH MARCH, 2014 ITA NO. 1006/MUM/2011 M/S. HSBC INVEST DIRECT SECURITIES (I) LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 21, MUMBAI 4. THE CIT 10, MUMBAI CITY 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.