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

ITA 1198/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4212 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MEENA CIT DHK
• Section: 43B; 143(3); 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 1197/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 M/S K.S. MOTORS PVT. LTD., NATIONAL MOTORS BUILDING, M.I. ROAD, JAIPUR. CUKE VS. I.T.O., WARD 2(2), JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AACCK 9273 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA NO. 1198/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 M/S K.S. MOTORS PVT. LTD., NATIONAL MOTORS BUILDING, M.I. ROAD, JAIPUR. CUKE VS. D.C.I.T., CIRCLE-2, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AACCK 9273 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. MEENA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/05/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE COMPOSITE ORDER OF LD.CIT(A)-I, JAIPUR DATED 21/08/2018 FOR THE A.Y. 2013-14 AND 2014-15 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). ITA 1197 & 1198/JP/2018_ KS MOTORS P LTD. VS ITO 2 2. IN BOTH THESE APPEALS, THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF EMPLOYEES CONTRIBUTION OF PF AND ESI BY INVOKING PROVISIONS OF SECTION 2(24)(X) R.W.S. 36(1)(VA) OF THE ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FROM THE RECORD WE FOUND THAT DURING THE COURSE OF ASSESSMENT, T HE AO OBSERVED THAT EMPLOYEES CONTRIBUTION TOWARDS PF OF RS.4,64,430/- AND ESI OF RS.6,02,133/- FOR AY 2013-14 AND ESI OF RS.4,50,434/- FOR AY 2014-15 HAS BEEN DEPOSITED BEYOND THE STIPULATED TIME AS ALLOWED U/S 36(1) R.W.S. 2(24)(X). THE ASSESSEE STATED THAT AS PER CPEC CIRCULAR GRACE PERIOD OF 5 DAYS IS ALLOWED AND RELIED ON VARIOUS CASE LAWS WHERE IT HAS BEEN HELD THAT WHERE THE EMPLOYEES CONTRIBUTION TO PF/ESI IS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN, THE SAME CANNOT BE DISALLOWED U/S 36(1)(VA). HOWEVER, THE AO, DID NOT FIND THE CONTENTION OF THE ASSESSEE ACCEPTABLE BY STATING THAT A DISTINCTION IS REQUIRED TO BE MADE BETWEEN 'EMPLOYER'S CONTRIBUTION' AND 'EMPLOYEES CONTRIBUTION' WHICH ARE DEDUCTIBLE UNDER SEPARATE PROVISIONS OF SECTION 43B AND 36(1)(VA) RESPECTIVELY. ACCORDINGLY, HE DISALLOWED DEDUCTION IN BOTH THE YEARS. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. BY RELYING ON THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED IN DB ITA ITA 1197 & 1198/JP/2018_ KS MOTORS P LTD. VS ITO 3 NO.10, 11 & 12/2018 IN ORDER DATED 13.03.2018 WHERE IT WAS HELD THAT 'WITH REGARDS TO ISSUE NOS. 2 & 3, THE CONTROVERSY IS PENDING BEFORE THE SUPREME COURT IN CIT VS. STATE BANK OF BIKANER & JAIPUR IN SLP(C) NO. 16249/2014, THEREFORE, SUBJECT TO THE DECISION OF SLP, FOR THE PRESENT, THESE ISSUES ARE DECIDED IN THE FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION IS IN THEIR FAVOUR'. 5. THE ASSESSEE IS IN FURTHER APPEALS BEFORE THE ITAT AGAINST THE ABOVE ORDER OF THE LD. CIT(A). 6. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE LD. CIT(A) HAS INCORRECTLY INTERPRETED THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED IN DB ITA NO.10, 11 & 12/2018 IN ORDER DATED 13.03.2018 (COPY ENCLOSED). THE HON'BLE HIGH COURT HAS HELD THAT 'SUBJECT TO THE DECISION OF SLP, FOR THE PRESENT, THESE ISSUES ARE DECIDED IN THE FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION IS IN THEIR FAVOUR'. THUS, WHAT THE HON'BLE COURT HAS STATED IN THE ORDER IS THAT THE HON'BLE SUPREME COURT HAS ADMITTED THE SLP IN CASE OF STATE BANK OF BIKANER & JAIPUR (WHICH WAS DECIDED IN FAVOUR OF ASSESSEE) THE APPEAL IN CASE OF RREC IS DECIDED IN FAVOUR OF ASSESSEE AND AGAINST THE ITA 1197 & 1198/JP/2018_ KS MOTORS P LTD. VS ITO 4 DEPARTMENT AND IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION OF SLP IS IN THEIR FAVOUR BUT BY MISTAKE HAS MENTIONED THAT ISSUE IS DECIDED IN FAVOUR OF DEPARTMENT AND AGAINST THE ASSESSEE. IF THE ISSUE IS TO BE DECIDED IN FAVOUR OF DEPARTMENT THEN THERE IS NO NEED OF THE SUBSEQUENT SENTENCE THAT 'IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION IS IN THEIR FAVOUR'. THEREFORE, THE DECISION SHOULD BE READ IN WHOLE AND NOT BY PICKING SOME WORDS OF THE ORDER. 7. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE LD. CIT(A) CONFIRMED THE DISALLOWANCE BY RELYING ON THE OBSERVATION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF PCIT VS M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED (SUPRA).THE ITAT, JAIPUR BENCH IN CASE OF M/S K. S. AUTOMOBILES PRIVATE LIMITED VS. ITO IN ITA NOS. 1184 & 1185/JP/2018 VIDE ORDER DATED 08.03.2019 (COPY ENCLOSED) ON SIMILAR FACTS AND WITH REGARDS TO THE DECISION OF THE LD. CIT(A) HAS HELD THAT 'THE LD CIT(A) HAS MISUNDERSTOOD THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT TO BE IN FAVOUR OF THE REVENUE THOUGH IT IS IN THE FAVOUR OF THE ASSESSEE. IN VIEW OF THE SERIES OF DECISIONS OF THE HON'BLE JURISDICTIONAL BENCH IN FAVOUR OF THE ASSESSEE AND ITA 1197 & 1198/JP/2018_ KS MOTORS P LTD. VS ITO 5 FURTHER HON'BLE SUPREME COURT IN CASE OF PCIT VS. RAJASTHAN STATE BEVERAGES CORPORATION LTD 250 TAXMANN 16 HAS DISMISSED THE SLP FILED BY THE DEPARTMENT. HENCE, THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF & ESI ARE DELETED'. 9. FROM THE RECORD IT APPEARS THAT IN AY 2013-14 THE PAYMENTS ARE MADE WITHIN THE GRACE PERIOD OF 5 DAYS AS IS EVIDENT FROM THE TABLE PLACED AT PAGE 3 OF THE ASSESSMENT ORDER. WHEREAS IN AY 2014-15, THE PAYMENTS OF ESI TOTALLING TO RS.3,00,388/- ARE MADE WITHIN THE GRACE PERIOD, OF 5 DAYS AS IS EVIDENT FROM THE TABLE PLACED AT PAGE 4 OF THE ASSESSMENT ORDER AND THEREFORE, TO THAT EXTENT NO DISALLOWANCE CAN BE MADE. ACCORDINGLY, WE RESTORE THE MATTER BACK TO THE FILE OF THE A.O. TO FIND OUT THE FACT THAT IF THE PAYMENT IS MADE WITHIN THE GRACE PERIOD, NO DISALLOWANCE IS WARRANTED. WE DIRECT ACCORDINGLY. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 TH MAY, 2019 ITA 1197 & 1198/JP/2018_ KS MOTORS P LTD. VS ITO 6 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S K.S. MOTORS PVT. LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- (I) I.T.O., WARD 2(2), JAIPUR. (II) THE D.C.I.T., CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1197 & 1198/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR