M/s Ray International, Aligarh V. J.A.O., Circle-4(1)(1), Aligarh

ITA 114/AGR/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5878 (ITAT-AGRA)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 01-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘DB’, AGRA BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. LALIET KUMAR, JUDICIAL MEMBER ITA No. 114/AGR/2021 (for Assessment Year : 2019-20) M/s. Ray International A-8, Sector-1, UPSIDC, Talanagari, Ramghat Road Aligarh PAN No. AADFR 6497 D Vs. ITO CPC, Banglore (APPELLANT) (RESPONDENT) Assessee by Shri Pankaj Gargh, Adv. Revenue by Mr. Waseem Arshad, Sr. D.R. Date of hearing: 22.03.2022 Date of Pronouncement: 29.03.2022 ORDER PER ANIL CHATURVEDI, AM : This appeal filed by the assessee is directed against the order dated 30.09.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi relating to Assessment Year 2019-20. 2. Brief facts of the case as culled out from the material on record are as under:- 2 3. Assessee is a partnership firm stated to be engaged in the business of manufacturing of electronic components. Assessee filed its return of income for A.Y. 2019-20 declaring total income of Rs.1,03,13,004/-. In the intimation issued u/s 143(1) of the Act by CPC, Bangalore vide intimation No. CPC/1920/A5/1975054389 dated 10.05.2020, the total income was determined at Rs.1,52,56,420/- as against the return income of Rs.1,03,13,004/-. Aggrieved by the intimation issued u/s 143(1) of the Act, assessee carried the matter before CIT(A), NFAC. CIT(A), NFAC vide order dated 30.09.2021 in DIN & Order No.ITBA/NFAC/S/250/2021-22/1036052018(1) dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), NFAC, assessee is now in appeal before us and has raised the following grounds: “1. That the appellant denies its liability to be assessed at total income of Rs.1,52,56,460/- as against returned income of Rs. 1,03,13,004/-and accordingly denies its ability to pay tax, cess and interest demand thereon 2. That the Ld. CIT(A) has erred in law and as well on facts by ignoring the jurisdictional Allahabad High Court’s Decision in the case of Sagun Foundary (P) Ltd vs. CIT 97 CCH 0160 which was followed by the Honorable ITAT, Agra Bench in Appeal No.41 and 42 /2021 in the case of Mahadev Cold Storage (P) Ltd. allowing the deduction for labour welfare dues if deposited before the Due Date specified j.der section 139(1) of the Income Tax Act. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making adjustments u/s 43(1)(a) of the Income Tax Act, 1961 by disallowing the contribution received from employees towards ESI and EPF amounting to Rs. 25,43,415/- by wrongly 3 applying the amendments made by Finance Act, 2021 in section 43B and section 36(1)(va) which are applicable with effect from 01.04.2021 only. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 24.00,000/- under the head income from Business and Profession ignoring the fact that Rs.24,00,000/- being rent received from Building has already shown in the return under the Head Income from House Property and again adding the same Rent in the Business Income tantamount to Double taxation. 5. That the appellant craves leave to add, amend, alter, modify or delete any or all of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other.” 4. Before us, at the outset, Learned AR submitted that Ground No.1 is general in nature and requires no adjudication. In view of the aforesaid submissions, Ground No.1 is dismissed. 5. Ground No.2 & 3 are interconnected and are with respect to the disallowance of delayed payment towards ESI and EPF aggregating to Rs.25,43,415/-. 6. CPC Bangalore vide intimation issued u/s 143(1) of the Act dated 10.05.2020 disallowed amount of Rs.25,43,415/- on account of delay in deposits of the employees’ contribution towards PF/ESIC before the prescribed due dates. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who dismissed the ground of assessee. Aggrieved by the order of 4 CIT(A), assessee is now in appeal before us and has raised the following grounds: 1. “That the appellant denies its liability to be assessed at total income of Rs. 1,52,56,460/- as against returned income of Rs.1,03,13,004/- and accordingly denies its liability to pay tax, cess and interest demand thereon. 2. That the Ld. CIT(A) has erred in law and as well on facts by ignoring the Jurisdictional Allahabad High Court’s Decision in the case of Sagun Foundary (P) Ltd vs. CIT 97 CCH 0160 which was followed by the Honorable ITAT, Agra Bench in Appeal No.41 and 42 /2021 in the case of Mahadev Cold Storage (P) Ltd. allowing the deduction for labour welfare dues if deposited before the Due Date specified under section 139(1) of the Income Tax Act. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making adjustments u/s 143(1)(a) of the Income Tax Act, 1961 by disallowing the contribution received from employees towards ESI and EPF amounting to Rs. 25,43,415/- by wrongly applying the amendments made by Finance Act, 2021 in section 43B and section 36(1)(va) which are applicable with effect from 01.04.2021 only. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 24,00,000/- under the head income from Business and Profession ignoring the fact that Rs.24,00,000/- being rent received from Building has already shown in the return under the Head Income from House Property and again adding the same Rent in the Business Income tantamount to Double taxation. 5. That the appellant craves leave to add, amend, alter, modify or delete any or all of the grounds of appeal before or at the time of hearing and all the without prejudice to each other.” 5 7. Before us, at the outset, Learned AR reiterated the submissions made before the CIT(A) and pointed to the chart of payment reproduced by the CIT(A) at page 5 to 7 of the order and from that table he pointed out that though there has been slight delay in deposit of the employees’ contribution of PF/ESIC but the fact remains that the entire contributions received by the assessee have been deposited with the appropriate authorities by the assessee before the filing of return of income. He further submitted that the issue is also covered in assessee’s favour by the decision of Hon’ble Allahabad High Court in the case of Sagun Foundry (P.) Ltd. vs. CIT (97 CCH 0160). He further submitted that recently the Agra Bench of Tribunal in group of cases Krishna Kanha Shelters Pvt. Ltd. vs. ACIT (ITA No.53/Agr/2021) and others has deleted the addition when the amounts of ESI and EPF were deposited before the due date of filing of return of income. He therefore submitted that the addition to be deleted. 8. Learned DR on the other hand supported the order of lower authorities and further submitted that the submissions made by him by arguing the bunch of appeals in the case of Krishna Kanha Shelters Pvt. Ltd. and others (supra) be considered as his submissions. 9. We have heard the rival submissions and perused the materials on record. The issue in the present ground is with respect to disallowance under section 36(1)(va) of the Act. It is an 6 undisputed fact that there has been slight delay in the deposit of employees’ contribution of PF and ESI by the assessee and the contribution have been deposited beyond the due date prescribed by the relevant authorities but at the same time it is also a fact that the amounts have been deposited with the appropriate authorities by the assessee before filing the return of income for the relevant assessment year. The Co-ordinate Bench of Agra Tribunal in the case of Krishna Kanha Shelters Pvt. Ltd. & Others vs. ACIT (supra), recently, after considering the various decisions cited therein (which are not reproduced herein for the sake of brevity) have held that when the employees contribution towards ESIC & PF have been deposited belatedly, but before filing the return of income, the same cannot be disallowed. We therefore following the decision of High Courts cited hereinabove and the decision of the Co-ordinate Bench of Tribunal are of the view that no addition u/s 36(1)(va) of the Act is called for in the present case. Thus the grounds of assessee are allowed. 10. Ground No.4 is with respect to the addition of Rs.24,00,000/-. 11. Before us, Learned AR submitted that during the year assessee has received rental income of Rs.24 lakh from M/s. Radish Technologies which were shown in the Profit and Loss account of the firm. He submitted that while filing the return of income, the rental income received by the assessee was deducted 7 from the Profit shown in the Profit and Loss account and the same was shown under the head “Income From House Property”. He submitted that the CPC while processing the return of income had added a sum of Rs.24 lakh under the head “Income from Business and Profession” which has resulted into double addition of the same income i.e. once under the head business income and again under the “Income from House Property”. He therefore submitted that the AO be directed to delete the double addition made. 12. Learned DR on the other hand submitted that from the details furnished by the assessee, it is not clear that assessee’s income has being taxed twice; once under the head income from Business and Profession and secondly; under the head income from house Property. He therefore submitted that the issue may be remitted to the file of AO for necessary verification. 13. Learned AR did not object to the submissions of Learned DR of remitting the issue to the file of AO 14. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the addition of Rs.24 lakh. It is the contention of the assessee that the rental income received by the assessee has been taxed twice; once under the head “Income from Business and Profession” and secondly; under the head “Income from 8 House Property”. Considering the submissions of both the parties, we are of the view that the matter needs re-verification. We therefore restore back the issue to the file of AO. AO is directed to verify the submissions of the assessee and thereafter determine the income in accordance with law. Assessee is also directed to promptly furnish all the required details called for by the assessee. Thus the ground of assessee is allowed for statistical purposes. 15. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29.03.2022 Sd/- Sd/- (LALIET KUMAR) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 29.03.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT AGRA