M/S K.S. AUTOMOBILES PVT. LTD., JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR

ITA 1185/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2345 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MEHLA
• Section: 37(1); 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A 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. 1184 /JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 M/S K.S. AUTOMOBILES PVT. LTD. NATIONAL MOTORS BUILDING, M.I. ROAD, JAIPUR. CUKE VS. THE ITO, WARD 2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCK 5973 A VIHYKFKHZ@ APPE LLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 1185/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 M/S K.S. AUTOMOBILES PVT. LTD. NATIONAL MOTORS BUILDING, M.I. ROAD, JAIPUR. CUKE VS. THE DCIT, CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCK 5973 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI A. K. MEHLA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/03/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 08/03/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE COMPOSITE ORDER OF THE LD. CIT(A), JAIPUR BOTH DATE D 06.08.2018 FOR THE ITA NO. 1184 &1185/JP/2018 M/S K.S. AUTOMOBILES PVT. LTD. VS. ITO/DCIT 2 ASSESSMENT YEARS 2013-14 & 2014-15 RESPECTIVELY. TH E ASSESSEE HAS RAISED COMMON GROUNDS IN THESE APPEALS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF OF RS. 11,02,343/- AND ESI OF RS. 24,035/- BY INVOKING PROVISIONS OF S ECTION 2(24)(X) R.W.S. 36(1)(VA). 2. THE ASSESSE CRAVES TO AMEND, ADD, ALTER, OR MODI FY ANY OF THE GROUND OF APPEALS. 3. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 2. THE SOLITARY COMMON ISSUE RAISED IN THESE APPEAL S IS REGARDING DISALLOWANCE OF EMPLOYEES CONSTRUCTION TO PF AND ES I WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME BUT AFTER THE DU E DATE OF PAYMENT AS PER RESPECTIVE ACTS PF & ESI. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DE CISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE DEC ISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 99 DTR 131 AS WELL AS DECISION IN CASE OF CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 363 ITR 307 AND IN CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. 366 ITR 163. WE FURTHER NOTE THAT THE LD. CIT(A) TH OUGH HAS NOT DISPUTED THE VARIOUS DECISIONS OF HONBLE HIGH COUR T HOWEVER, ITA NO. 1184 &1185/JP/2018 M/S K.S. AUTOMOBILES PVT. LTD. VS. ITO/DCIT 3 DISALLOWANCE MADE BY THE AO ARE SUSTAINED AS HE MIS UNDERSTOOD THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CA SE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED IN D B ITA NO. 10,11 & 12/2018 DATED 13.03.2018. IN THE CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED (SUPRA) THE HO NBLE HIGH COURT 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 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 ITA NO. 1184 &1185/JP/2018 M/S K.S. AUTOMOBILES PVT. LTD. VS. ITO/DCIT 4 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. THUS, IT IS CLEAR THAT THE HONBLE JURISDICTIONAL H IGH 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 OLLOWED BY THE HONBLE JURISDICTIONAL HIGH COURT AR E 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 CON TEST OF THE DECISION FOLLOWED AND THE SUBSEQUENT LINE WHICH SAYS IT WIL L BE OPENED FOR THE ITA NO. 1184 &1185/JP/2018 M/S K.S. AUTOMOBILES PVT. LTD. VS. ITO/DCIT 5 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 I T CAN RECOVER THE AMOUNT. THEREFORE, EVEN THE DECISION WHICH IS RELIE D UPON THE LD. CIT(A) THE SAME IS IN FAVOUR OF THE ASSESSEE THOUGH DUE TO TYPOGRAPHICAL MISTAKE IT WAS MISUNDERSTOOD BY THE L D. CIT(A) AS IN FAVOUR OF THE REVENUE. ACCORDINGLY, IN VIEW OF A SE RIES OF DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE AND FURTHER HONBLE SUPREME COURT IN CASE OF PCIT VS. R AJASTHAN STATE BEVERAGES CORPORATION LTD. 250 TAXMANN 16 HAS DISMI SSED THE SLP FILED BY THE DEPARTMENT THIS ISSUE IS DECIDED IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE. HENCE, DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF & ESI AR E DELETED. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/03/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08/03/2019. * SANTOSH. ITA NO. 1184 &1185/JP/2018 M/S K.S. AUTOMOBILES PVT. LTD. VS. ITO/DCIT 6 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S K.S. AUTOMOBILES PVT. LTD., JAIP UR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 2(2)/DCIT, CIRCLE-2, JAIP UR. 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.1184 & 1185/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR