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

ITA 1062/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9669 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI
• Assessee Lawyers: AJAY JAIN CA DHK
• Keywords: Depreciation; Business expenditure; Revenue 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 HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NO. 1062/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S. RAJASTHAN STATE BEVERAGES CORPORATION LTD., D-BLOCK, FIRST FLOOR, VITT. 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 : SHRI D.S. KOTHARI (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI AJAY JAIN (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10.03.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20/03/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR DATED 15.09.2016 PERTAINING TO ASSESSMENT YE AR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT (APPEALS) WAS JUSTIFIED IN DELE TING THE ADDITION OF RS. 19,00,00,000/- MADE BY THE AO BY DI SALLOWING THE PAYMENT OF PRIVILEGE FEES WITHOUT APPRECIATING THE FACT THAT THE SAID EXPENSES ARE OF CAPITAL IN NATURE. 2(A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE ITAT WAS JUSTIFIED IN DELETING THE ADDI TION OF RS. 8884/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUT ION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN TH E RESPECTIVE ACTS. 2 ITA NO. 1062/JP/2016 RAJASTHAN STATE BEVERAGES CORPORATION LTD. (B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE HONBLE ITAT WAS JUSTIFIED IN HOLDING THAT THE EMPLOYEES CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVIS IONS OF SECTION 43B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(2 4)(X) OF THE INCOME TAX ACT, 1961. 3. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 20.02.2016. WHILE FRAMING THE ASSESSMENT, THE AO O BSERVED THAT A PERUSAL OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE CORPORATION SHOWS THAT THE ASSESSEE CORPORATION HAS PAID A SUM OF RS. 19,00,00,000/- TO THE GOVERNMENT OF RAJASTHAN AS PRIVILEGE FEE. THE BASIC ISSUE INVOLVED IN THE CASE IS REGARDING THE ALLOWABILITY OF PAYMENT OF PRIVILEGE FEE BY THE ASSESSEE CORPORATIO N TO THE STATE GOVERNMENT OF RAJASTHAN AMOUNTING TO RS. 19,00,00,000/- WHICH HAS BEEN CLAIMED BY THE ASSESSEE CORPORATION AS BUSINESS EXPENDITURE. THE AO DID NO T ACCEPT THE EXPLANATION OF THE ASSESSEE AND MADE DISALLOWANCE OF RS. 19,00,00,000/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER, THE AO ALSO MADE ADDITION OF RS. 8,884/- ON ACCOUNT OF LATE DEPOSIT OF PF & ESI CONTRIBUTION. THE AO ALSO MADE DISALLOWANCE OF DEPRECIATION ON DATA CENTRE AND SOFTWARE INSTALLATI ON OF RS. 19,85,349/-. AGGRIEVED BY THIS, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CI T (A), WHO AFTER CONSIDERING THE SUBMISSIONS, PARTLY ALLOWED THE APPEAL THEREBY THE LD. CIT (A) FOLLOWING THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE ASS ESSEES OWN CASE DELETED THE DISALLOWANCE IN RESPECT OF PRIVILEGE FEE AND ALSO D ELETED THE DISALLOWANCE MADE ON ACCOUNT OF LATE DEPOSIT OF PF & ESI CONTRIBUTION BY FOLLOWING THE JUDGMENTS OF 3 ITA NO. 1062/JP/2016 RAJASTHAN STATE BEVERAGES CORPORATION LTD. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JA IPUR VIDHYUT VITHRAN NIGAM LTD.,265 CTR 62 (RAJ.), CIT VS. STATE BANK OF BIKAN ER & JAIPUR (2014) 99 DTR 131 (RAJ.) AND ALSO THE DECISION OF ITAT IN THE ASSESSE ES OWN CASE. AGGRIEVED BY THIS, THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. THE LD. D/R FAIRLY CONCEDED THAT BOTH THE ISSUES ARE AGAINST THE REVENUE BY THE JUDGMENTS OF HONBLE RAJASTHAN HIGH COURT. 3.1. ON THE CONTRARY, THE LD. A/R HAS SUPPORTED THE ORDER OF LD. CIT (A) AND SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE . 3.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE IDENTICAL ISSUE WAS ALSO AGITATED BY THE REVENUE IN THE ASSESSEES OWN CASE IN ITA NO. 1000/JP/2015 WHEREIN THE COORDINATE BENCH BY FOLLOWING THE JUDGMENT OF HONBLE RAJASTHAN HIGH CO URT DELETED THE DISALLOWANCE BY OBSERVING IN PARA 4.3 AS UNDER :- 4.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE LD. CIT (A) HAS DECIDED THIS ISSUE IN PARA 2.4. OF HER ORDER WH ICH READS AS UNDER :- 2.4. I HAVE PERUSED THE FACTS OF THE CASE, ASSESSM ENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THIS ISSUE HA S ALSO ARISEN IN THE CASE OF THE APPELLANT IN A.Y. 2006-07, 2007- 08, 2008-09, 2009-10, 2010-11 AND 2011-12. THIS ISSUE IS COVERED IN FAVOUR OF THE APPELLANT BY THE ORDERS OF THE ITAT JAIPUR A ND CIT (A)-II, JAIPUR. IN A.Y. 2006-07 AND 2007-08, THE ITAT (IN I TA 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 RESPE CTIVELY) HAVE HELD THAT PRIVILEGE FEES PAID BY THE ASSESSEE TO THE GOVT. OF RAJASTHAN IS ALLOWABLE AS REVENUE EXPENDITURE. I N 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 YEARS. FOLLOWING THE ABOVE JUDGMENTS OF ITAT, JAIPUR AND C IT (A)-II, 4 ITA NO. 1062/JP/2016 RAJASTHAN STATE BEVERAGES CORPORATION LTD. JAIPUR, PRIVILEGE FEES OF RS. 52,00,00,000/- IS HEL D TO BE ALLOWABLE AS REVENUE EXPENDITURE. THE ABOVE ADDITIO N MADE BY THE ASSESSING OFFICER IS, THEREFORE, NOT UPHELD. TH E 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 A ND IN ITA NO. 540/JP/2011 DATED 21.10.2011 FOR A.Y. 2007-08, WE A FFIRM THE ORDER OF LD. CIT (A) AND THE GROUND OF THE REVENUE IS HEREBY REJECTED. TAKING A CONSISTENT VIEW OF THE MATTER, WE AFFIRM T HE ORDER OF LD. CIT (A) AND GROUND NO. 1 OF THE REVENUE IS HEREBY REJECTED. 4. REGARDING GROUND NO. 2, WE FIND THAT THE ISSUE R ELATING TO DEPOSIT OF CONTRIBUTION TO ESI AND PF IS SQUARELY COVERED BY T HE VARIOUS JUDICIAL PRONOUNCEMENTS OF HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE AS CITED BY THE LD. COUNSEL. THE COORDINATE BENCH OF T HE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 1000/JP/2015 HAS DECIDED THE ISSUE IN PARA 6.3 OF ITS ORDER BY OBSERVING AS UNDER :- 6.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE COORDINATE BE NCH OF THE TRIBUNAL 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 FAVOUR OF THE ASSESSEE. TH E HONBLE JURISDICTIONAL HIGH COURT HAS ALSO DECIDED THIS ISS UE 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 ABOVE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT (A), WHICH IS H EREBY AFFIRMED. THE GROUND OF THE REVENUE IS REJECTED. THEREFORE, PLACING RELIANCE ON THE JUDGMENTS OF HON BLE RAJASTHAN HIGH COURT AND ALSO FOLLOWING THE DECISION OF COORDINATE BENCH, WE FIND NO REASON TO INTERFERE IN THE 5 ITA NO. 1062/JP/2016 RAJASTHAN STATE BEVERAGES CORPORATION LTD. ORDER OF LD. CIT (A), THE SAME IS HEREBY UPHELD. TH E GROUND OF THE REVENUE IS REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20/03/201 7. SD/- SD/- ( HKKXPUN] ( DQY HKKJR ) (BHAG CHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 20/03/2017. D/ 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 CORPORATION LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1062/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 1062/JP/2016 RAJASTHAN STATE BEVERAGES CORPORATION LTD.