V.R. POWER EQUIPMENTS PVT. LTD, Jaipur V. DEPUTY COMMISSOINER OF INCOME TAX, CIRCLE-3, Jaipur

ITA 1056/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5171 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANURADHA JCIT DHK
• Assessee Lawyers: SHRAVAN KR GUPTA
• Section: 143(3); 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 1056/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 M/S V.R. POWER EQUIPMENT PVT. LTD., B-25, LOHIYA COLONY, VAISHALI NAGAR, JAIPUR. C UKE VS. D.C.I.T., CIRCLE-3, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AACCV 8974 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI SHRAVAN KR. GUPTA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : MS. ANURADHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/08/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/10/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A)-I, JAIPUR DATED 06/08/2018 FOR THE A.Y. 2014-15 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THE GROUND NO.1 OF THE APPEAL, THE ASSESSEE HAS ALLEGED THAT THE ASSESSMENT IS BARRED BY LIMITATION, THEREFORE, NULL AND VOID AND DESERVES TO BE QUASHED. IN THE GROUND NO. 3, THE ASSESSEE HAS ALLEGED ITA 1056/JP/2018_ M/S VR POWER EQUIPMENT PVT. LTD. VS DCIT 2 DISALLOWANCE OF RS. 71,508/- ON ACCOUNT OF LOSS CLAIMED ON SALE OF VEHICLES. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE DID NOT PRESS GROUNDS NO. 1 AND 3 OF THE APPEAL, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. IN THE GROUND NO. 2 OF THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF RS. 7,85,045/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AND RS. 1,54,088/- ON ACCOUNT OF ESI CONTRIBUTION. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF OPERATION AND MAINTENANCE OF TELECOMMUNICATION AND NETWORK TOWERS AND TRADING OF SMALL D.G. SETS AND POWER OF EQUIPMENT. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. FOUND THAT THERE WAS DELAY OF 2 TO 7 DAYS IN PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND ESI. WE ALSO FOUND THAT BOTH THE PAYMENTS WERE MADE BEFORE LAST DATE OF FILING RETURN, THEREFORE COVERED BY THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF PCIT VS RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED. WE FOUND THAT THE LD. CIT(A) HAS WRONGLY RELIED THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT BECAUSE IN CONCLUSION IN PARA 5.6, THERE WAS TYPOGRAPHICAL MISTAKE WHEREIN IT WAS ITA 1056/JP/2018_ M/S VR POWER EQUIPMENT PVT. LTD. VS DCIT 3 STATED THESE ISSUES DECIDED IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. THUS, WE FOUND THAT EVEN THE DECISION RELIED BY THE LD. CIT(A) IS IN FAVOUR OF THE ASSESSEE. THOUGH, DUE TO TYPOGRAPHICAL MISTAKE, IT WAS MISUNDERSTOOD BY THE LD. CIT(A) AS IN FAVOUR OF THE REVENUE. MOREOVER, THE HONBLE SUPREME COURT IN THE CASE OF PCIT VS RAJASTHAN STATE BEVERAGES CORPORATION LIMITED HAS DISMISSED THE SLP FILED BY THE DEPARTMENT AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 5. WE FURTHER OBSERVE THAT THIS MATTER IS DIRECTLY COVERED BY THE RECENT DECISION OF THIS TRIBUNAL IN THE CASE OF GOSIL EXPORTS PVT. LTD V/S THE ACIT CIRCLE-1 JAIPUR IN ITA NO. 1064/JP/2018 DATED 25.04.2019 WHEREIN THE BENCH HAS DELETED THE DISALLOWANCE UNDER THE SAME FACTS AND CIRCUMSTANCE AGAINST THE ORDER OF SAME LD. CIT(A) AND ON SAME BASE APPLIED BY HIM. THE BENCH HAS FULLY EXPLAINED THE DECISION OF HONBLE RAJASTHAN HIGH COURT AS REFERRED BY THE ID. CIT(A) AND FURTHER HELD THAT 5. THUS, IT IS CLEAR THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS FOLLOWED THE EARLIER DECISIONS IN CASE OF PCIT VS. RAJASTHAN STATE SEED CORPORATION LIMITED 386 ITR 267 AS WELL AS DECISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR (SUPRA). ALL THESE DECISIONS WHICH WERE FOLLOWED BY THE HONBLE JURISDICTIONAL HIGH COURT ARE IN FAVOUR OF THE ASSESSEE HOWEVER, IN THE CONCLUSION IN PARA 6 THERE IS A TYPOGRAPHICAL MISTAKE WHEREIN IT IS STATED THESE ISSUES DECIDED IN FAVOUR OF THE ITA 1056/JP/2018_ M/S VR POWER EQUIPMENT PVT. LTD. VS DCIT 4 DEPARTMENT AND AGAINST THE ASSESSEE. THE WHOLE DECISION OF THE HONBLE HIGH COURT HAS TO BE CONSIDERED IN THE CONTEXT OF THE DECISION FOLLOWED AND THE SUBSEQUENT LINE WHICH SAYS IT WILL BE OPENED FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION IN THEIR FAVOUR WHICH MEANS THAT IN CASE OF FURTHER APPEAL BEFORE HONBLE SUPREME COURT IF DECISION IS DELIVERED IN FAVOUR OF THE DEPARTMENT, IT CAN RECOVER THE AMOUNT. THEREFORE, EVEN THE DECISION WHICH IS RELIED UPON THE LD. CIT(A), IT IS IN FAVOUR OF THE ASSESSEE THOUGH DUE TO TYPOGRAPHICAL MISTAKE IT WAS MISUNDERSTOOD BY THE LD. CIT(A) AS IN FAVOUR OF THE REVENUE. ACCORDINGLY, IN VIEW OF A SERIES OF DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE AND FURTHER, IN VIEW OF THE FACT THAT THE HONBLE SUPREME COURT IN CASE OF PCIT VS. RAJASTHAN STATE BEVERAGES CORPORATION LTD. 250 TAXMANN 16 HAS DISMISSED THE SLP FILED BY THE DEPARTMENT, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HENCE, DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF & ESI ARE HEREBY DELETED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DIRECT THE A.O. TO DELETE BOTH THE DISALLOWANCES SO MADE. 6. THE ASSESSEE IS ALSO AGGRIEVED FOR UPHOLDING DISALLOWANCE OF RS. 50,000/- ON ACCOUNT OF VARIOUS EXPENSES CLAIMED IN THE P&L ACCOUNT WITHOUT REJECTING BOOKS OF ACCOUNT. 7. FROM THE RECORD, WE FOUND THAT THE A.O. HAS DISALLOWED LUMP SUM EXPENDITURE OF RS. 1.00 LAC OUT OF VARIOUS EXPENSES CLAIMED IN THE P&L ACCOUNT UNDER THE HEAD TELEPHONE EXPENSES RS. 4,99,520/-, POSTAGE AND ITA 1056/JP/2018_ M/S VR POWER EQUIPMENT PVT. LTD. VS DCIT 5 COURIER EXPENSES OF RS. 48,350/-, PRINTING AND STATIONERY EXPENSES OF RS. 2,05,478/-, REPAIR AND MAINTENANCE EXPENSES OF RS. 1,59,382/- AND OFFICE EXPENSES OF RS. 3,04,500/-. DURING THE VERIFICATION OF THESE EXPENSES IT WAS NOTICED THAT SOME OF THE EXPENSES WERE NOT SUPPORTED BY PROPER BILLS, SOME OF THE EXPENSES WERE CLAIMED WITH HANDMADE SLIPS/BILLS AND SOME OF THE PAYMENTS WERE MADE IN CASH. 8. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF RS. 50,000/- OUT OF DISALLOWANCE OF RS. 1.00 LAC MADE BY THE A.O. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANCE OF RS. 50,000/- IN VIEW OF THE CATEGORICAL FINDINGS RECORDED BY THE A.O. WHICH HAS NOT BEEN CONTROVERTED BY THE LD AR DURING THE COURSE OF HEARING BEFORE US. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS [KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH OCTOBER, 2019 *RANJAN ITA 1056/JP/2018_ M/S VR POWER EQUIPMENT PVT. LTD. VS DCIT 6 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S V.R. POWER EQUIPMENT PVT. LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CIRCLE-3, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1056/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR