Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 6803 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-04-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2014-2015
Appeal Filed On
12-09-2018
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1064/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2014-15 GOSIL EXPORTS PVT. LTD. E-70, EPIP, GEMS AND JEWELLERY ZONE, SITAPURA INDUSTRIAL AREA, JAIPUR. CUKE VS. THE ACIT, CIRCLE-1 JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACG 8920 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SHAMBHU LAL GUPTA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ANURADHA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/04/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT :25/04/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-1, JAIPUR DATED 16.08.2018 FOR THE ASSESSMEN T YEAR 2014-15 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT APPEAL ERRED LAW IN SUSTAINING THE ADDITION IN RESPECT OF THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND OF RS . 21,90,249/- U/S 36(1)(VA), DESPITE THE FACT THAT THE SAME WAS P AID BEFORE THE DUE DATE OF SUBMISSION OF RETURN U/S 139(1). ITA NO. 1064/JP/2018 GOSIL EXPORTS PVT. LTD. VS. ACIT 2 2. THE SOLITARY GROUND OF APPEAL RELATES TO DISALLO WANCE OF EMPLOYEES CONSTRUCTION TO PF AND ESI AMOUNTING TO R S 21,90,249. UNDISPUTEDLY, THE CONTRIBUTION HAS BEEN PAID WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME BUT AFTER THE DUE DATE O F PAYMENT AS PER RESPECTIVE ACTS. 3. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE DECISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 9 9 DTR 131 AS WELL AS DECISION IN CASE OF CIT VS. JAIPUR VIDYUT VITRAN NI GAM LTD. 363 ITR 307 AND IN CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAK ARI SANGH LTD. 366 ITR 163. 4. WE FURTHER NOTE THAT THE LD. CIT(A) THOUGH HAS N OT DISPUTED THE VARIOUS DECISIONS OF HONBLE HIGH COURT HOWEVER, DI SALLOWANCE MADE BY THE AO ARE SUSTAINED AS HE MISUNDERSTOOD THE DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF PCIT VS. M/S R AJASTHAN RENEWABLE ENERGY CORPORATION LIMITED IN DB ITA NO. 10,11 & 12 /2018 DATED 13.03.2018. IN THE SAID CASE, THE HONBLE HIGH COUR T HAS CONSIDERED THIS ISSUE IN PARA 4 TO 6 AS UNDER:- 4. SO FAR AS QUESTION NO. 1 IS CONCERNED, THE SAME IS NOW COVERED BY THE DECISIONS OF THIS COURT IN PRINCIPAL COMMISSIONER OF INCOME-TAX V/S RAJASTHAN STATE SEED CORPORATION LTD. [2016] 386 ITR 267 (RAJ) WHEREIN IT HAS BEEN HELD AS UNDER :- IN SO FAR AS THE EXPENDITURE INCURRED ON STATE RENE WAL FUND IS CONCERNED, THE SAID EXPENDITURE ALSO GOES TO SHOW T HAT THE ITA NO. 1064/JP/2018 GOSIL EXPORTS PVT. LTD. VS. ACIT 3 RENEWAL FUND WAS SET UP BY THE STATE GOVERNMENT AND WAS CREATED WITH THE OBJECT OF PROVIDING A SAFETY NET F OR THE WORKERS LIKELY TO BE EFFECTED BY RESTRICTING IN THE STATE P UBLIC ENTERPRISE AND THAT A FINDING OF FACT HAS BEEN RECORDED THAT T HE CONTRIBUTION MADE TO THE STATE RENEWAL FUND IS SOLELY FOR THE PU RPOSES OF THE WELFARE AND BENEFIT OF THE EMPLOYEES. IN OUR VIEW, IT IS FOR THE ASSESSEE TO DECIDE WHETHER ANY EXPENDITURE SHOULD B E INCURRED IN THE COURSE OF BUSINESS AND EXPENDITURE OF THIS NATU RE BEING FOR BUSINESS EXPEDIENCY IS CERTAINLY ALLOWABLE DEDUCTIO N UNDER SECTION 37(1) OF THE ACT. IN OUR VIEW ANY NORMAL EX PENDITURE FOR THE WELFARE AND BENEFIT OF THE EMPLOYEES IS ALLOWAB LE EXPENDITURE UNDER SECTION 37(1), THE TRIBUNAL HAS COME TO A FIN DING OF FACT THAT IT WAS A LEGAL OBLIGATION OF THE RESPONDENT-AS SESSEE TOWARDS CONTRIBUTION OF THE SAID AMOUNT TO THE STATE RENEWA L FUND AND THERE BEING A LEGAL OBLIGATION AS WELL IN OUR VIEW THE TRIBUNAL HAS COME TO A CORRECT CONCLUSION. IN VIEW OF THE ABOVE, QUESTION NO. 1 IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 6. WITH REGARD TO ISSUE NO. 2 AND 3 THE CONTROVERSY IS PENDING BEFORE THE SUPREME COURT IN C.I.T., JAIPUR VS/ MS S TATE BANK OF BIKANER AND JAIPUR IN SLP NO. 16249/2014, THEREFOR E, SUBJECT TO DECISION OF SLP, FOR THE PRESENT, THESE ISSUES ARE DECIDED ON IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF TH E DECISION IS IN THEIR FAVOUR. ITA NO. 1064/JP/2018 GOSIL EXPORTS PVT. LTD. VS. ACIT 4 5. THUS, IT IS CLEAR THAT THE HONBLE JURISDICTIONA L 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 D ECISIONS WHICH WERE FOLLOWED BY THE HONBLE JURISDICTIONAL HIGH COURT A RE 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 DEPARTMENT AND AGAINST THE ASSESSEE. THE WHOLE DEC ISION OF THE HONBLE HIGH COURT HAS TO BE CONSIDERED IN THE CONT EXT OF THE DECISION FOLLOWED AND THE SUBSEQUENT LINE WHICH SAYS IT WIL L BE OPENED FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION I N 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 RELIE D 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 I N FAVOUR OF THE REVENUE. ACCORDINGLY, IN VIEW OF A SERIES OF DECISI ONS 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 TAXM ANN 16 HAS DISMISSED THE SLP FILED BY THE DEPARTMENT, THIS ISS UE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HEN CE, DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT O F EMPLOYEES CONTRIBUTION TO PF & ESI ARE HEREBY DELETED. ITA NO. 1064/JP/2018 GOSIL EXPORTS PVT. LTD. VS. ACIT 5 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/04/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/04/2019. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- GOSIL EXPORTS PVT. LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-1, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1064/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR
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