M/s. Charotar Gas Sahakari Mandli. Ltd, Anand V. ITO, Ward-2, Anand

ITA 1183/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4366 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-09-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MRS ARTI N SHAH
• Keywords: Business expenditure; Commercial expediency; TDS; Set aside

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1183/AHD/2018 / ASSESSMENT YEAR: 2014-15 M/S. CHAROTAR GAS SAHAKARI MANDLI LTD., GAS HOUSE-11, GIDC, NR. GAS STATION, V.U. NAGAR, ANAND PAN : AAATC 1831 F VS. THE INCOME-TAX OFFICER, WARD 2, ANAND / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MRS. ARTI N. SHAH, AR REVENUE BY : SHRI MUDIT NAGPAL, SR DR / DATE OF HEARING : 24/09/2019 / DATE OF PRONOUNCEMENT: 21/11/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD. CIT(A)-4, VADODARA DATED 30.01.2018 PASSED FOR ASSESSMENT YEAR 2014- 15. 2. THE ASSESSEE HAS TAKEN THREE GROUNDS OF APPEAL W HICH READ AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-4, VADODARA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE DISALLOWANCE OF RS.40,000/- IN RESPECT OF EXPENSES. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-4, VADODARA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE DISALLOWANCE OF RS.3,16,702/- PAID AS LIC PREMIUM OF THE STAFF. 3. YOUR APPELLANT PRAYS TO RESERVE THE RIGHT TO A DD, ALTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. ITA NO. 1183/AHD/2018 CHAROTAR GAS SAHAKARI MANDLI LTD VS. ITO FOR AY: 2014-15 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUND NO.1; HENCE REJECTED. 4. GROUND NO.3 IS A GENERAL GROUND OF APPEAL, WHICH DOES NOT CALL FOR RECORDING OF ANY SPECIFIC FINDING; HENCE REJECTED. 5. AS FAR AS GROUND NO. 2 IS CONCERNED, LEARNED COU NSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT IDENTICAL ISSUE A ROSE IN ASSESSMENT YEAR 2011-12 AND THE DISPUTE TRAVELLED UPTO THE TRIBUNAL . THE TRIBUNAL VIDE ORDER DATED 26 TH FEBRUARY 2018 IN ITA NO.412/AHD/2016 SET ASIDE THI S ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDIC ATION BY RECORDING FOLLOWING FINDINGS:- 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 2,64,220/- BEING PREMIUM PAID ON THE LIC POLICY OF THE EMPLOYEES. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES OF R S. 2,64,220/- ON ACCOUNT OF LIC PREMIUM IN THE NAME OF SEVERAL INDIVIDUAL. THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF PAYMENT OF LIC PREMIUM OF RS. 2, 64,220/- . IN ITS SUBMISSION, THE ASSESSEE STATED THAT THE EXPENDITUR E WAS INCURRED FOR INSURANCE OF LIFE OF STAFF MEMBERS OF THE ASSESSEE SOCIETY. IT WAS CLAIMED THAT THE EXPENDITURE SHOULD BE ALLOWED ON THE GROUNDS OF COMMERCIAL EXPEDIENCY. IT WAS BROUGHT TO THE NOTICE OF THE A.O. THAT THE N ATURE OF THE BUSINESS OF THE ASSESSEE IS SUCH THAT THE LIFE RISK OF ITS EMPLOYEE S IS VERY MUCH ON THE HIGHER SIDE AS THEY HAVE TO WORK ON THE GAS PIPELINES WHIC H IS VERY RISKY & PRONE TO FIRE. THE ASSESSEE CONTENDED THAT TO SAFEGUARD THE LIVES OF ITS EMPLOYEES, THE ASSESSEE AGREED TO PAY INSURANCE PREMIUM ON THEIR L IVE AND CLAIMED THE SAME AS EXPENDITURE ON THE GROUNDS OF COMMERCIAL EXPEDIE NCY. THE A.O. DISMISSED THE CLAIM OF THE ASSESSEE HOLDING THAT TH E LIC PREMIUM WAS NEVER CONSIDERED AS PERQUISITE IN THE HANDS OF THE EMPLOY EE AT THE TIME OF COMPUTING THE TDS LIABILITY. ONLY WHEN IT WAS POINT ED OUT TO THE ASSESSEE, THE ASSESSEE FURNISHED THE COMPUTATION OF TAXABILIT Y OF EMPLOYEES AFTER INCLUDING THE SAID PREMIUM. THE A.O. WAS NOT CONVIN CED WITH THE CLAIM OF THE ASSESSEE AND DISALLOWED RS. 2,64,220/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THERE ARE CERTAIN DOCUMENTS/DETAILS WHICH NEED TO BE FURNISHED IN SUP PORT OF THE CLAIM. 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PA ID INSURANCE PREMIUM ON THE POLICIES TAKEN IN THE NAME OF THE EMPLOYEES. TH E CLAIM OF THE ASSESSEE THAT ITA NO. 1183/AHD/2018 CHAROTAR GAS SAHAKARI MANDLI LTD VS. ITO FOR AY: 2014-15 3 THE INSURANCE POLICY IS TAKEN IN THE CATEGORY OF EM PLOYER EMPLOYEE POLICY OF THE LIC NEEDS VERIFICATION. IN OUR CONSIDERED OPINI ON, THIS IS A FIT CASE FOR RESTORATION TO THE FILES OF THE A.O. FOR DE NOVO AS SESSMENT. WE ACCORDINGLY RESTORE THE ENTIRE ASSESSMENT TO THE FILES OF THE A .O. THE ASSESSEE IS DIRECTED TO FURNISH THE DETAILS OF THE INSURANCE POLICY. THE ASSESSEE IS FURTHER DIRECTED TO SHOW THAT THE EMPLOYEES REMAINED IN EMPLOYMENT T HROUGHOUT THE YEAR AND FURTHER EXPLAINED THE PROCEDURE ADOPTED BY THE ASSE SSEE IF IN CASE, THE EMPLOYEE LEAVES THE EMPLOYMENT AND THE INSURANCE PR EMIUM IS PAID ON HIS POLICY. THE A.O. IS DIRECTED TO VERIFY THE DETAILS AFRESH AND THEN DECIDE WHETHER THE INSURANCE PREMIUM IS TO BE ALLOWED ON T HE GROUNDS OF COMMERCIAL EXPEDIENCY AS BUSINESS EXPENDITURE. 7. THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE WI TH ABOVE DIRECTIONS. 6. SINCE THERE IS NO DISPARITY ON THE FACTS, THEREF ORE, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER TO DECIDE THE SAME IN ACCORDANCE WITH THE FINDINGS OF THE TRIBUNAL IN ASSESSMENT YEAR 2011-12 (EXTRACTED SUPRA). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 21 ST NOVEMBER, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 21/11/2019 BIJU T., SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ', / ITAT, AHMEDABAD