ACIT, Circle-2(2), Hyd, Hyderabad V. GVK Technical & Consultancy Pvt. Ltd., Sec'bad, Secunderabad

ITA 1248/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5900 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: V SIVA KUMAR
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.1248/HYD/2015 ASSESSMENT YEAR 2012-2013 THE ACIT, CIRCLE - 2(2), HYDERABAD. VS. M/S. GVK TECHNICAL AND CONSULTANCY P. LTD., SECUNDERABAD 003 PAN AACCG1259Q (APPELLANT) (RESPONDENT) FOR REVENUE : MR. M. SITARAM FOR ASSESSEE : MR. V. SIVAKUMAR DATE OF HEARING : 16 . 03 .201 6 DATE OF PRONOUNCEMENT : 24 .03.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y. 2012- 2013. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY T HE ORDER OF THE CIT(A) IN ALLOWING THE APPEAL OF THE A SSESSEE ON THE ISSUE OF REMITTANCE OF ESI AND P.F. UNDER SE CTION 36(1)(VA) OF THE I.T. ACT, 1961, THOUGH THE EXPLANA TION OF THE SAID SECTION SPECIFIES DUE DATE FOR REMITTANCE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF ENGINEE RING AND PROJECT CONSULTANCY, FILED ITS RETURN OF INCOME FOR THE A.Y. 2012-2013 ON 28.09.2012 DECLARING TOTAL INCOME OF RS.4,41,85,000. DURING THE ASSESSMENT PROCEEDINGS 2 ITA.NO.1248/H/2015 M/S. GVK TECHNICAL AND CONSULTANCY PVT. LTD., SECUNDERABAD. UNDER SECTION 143(3) OF THE I.T. ACT, THE A.O. OBSE RVED THAT THE ASSESSEE HAS PAID EMPLOYEES SHARE OF CONTRIBUTI ON OF P.F. BELATEDLY TO THE EXTENT OF RS.75,56,654. OBSER VING THAT THE ASSESSEE HAS TO REMIT THE SAID SUM TO THE EMPLOYEES ACCOUNT IN THE P.F. ON OR BEFORE THE DUE DATE AS PRESCRIBED UNDER THE PROVIDENT FUND ACT, HE HELD THAT IT IS NOT ALLOWABLE UNDER SECTION 36(1)(VA) OF THE ACT. ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE AS TO WHY T HE ABOVE MENTIONED SUM OF RS.75,56,654 SHOULD NOT BE DISALLOWED UNDER SECTION 36(1)(VA). IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, THE ASSESSEE, VIDE LETTER DATED 21.01.2015, SUBMITTED THAT THE EMPLOYEES CONTRIBUTI ON TO P.F. AND ESI ARE ALSO COVERED UNDER SECTION 43B AND NO DISALLOWANCE IS REQUIRED IF THE PAYMENTS ARE MADE B EFORE THE DUE DATE OF FILING OF THE INCOME TAX RETURN. TH E ASSESSEE ALSO RELIED UPON VARIOUS JUDICIAL PRECEDEN TS TO THE EFFECT THAT EMPLOYEES CONTRIBUTION ARE ALSO TO BE ALLOWED, IF PAID BEFORE THE DUE DATE OF FILING OF T HE INCOME TAX RETURNS SINCE THEY COME UNDER SECTION 43B OF TH E INCOME TAX ACT. THE A.O. HOWEVER, WAS NOT SATISFIED WITH THE ASSESSEES CONTENTIONS AND HOLDING THAT THE PRO VISIONS OF SECTION 36(1)(VA) AND SECTION 43(B)(B) OF THE AC T ARE DISTINCT, THE EMPLOYEES CONTRIBUTION IS NOT ALLOWAB LE UNDER SECTION 43(B)(B) OF THE ACT. HE, ACCORDINGLY, DISALLOWED THE SUM OF RS.75,56,654 AND BROUGHT IT T O TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE SAME BY FOLLOWING THE FOLLOW ING DECISIONS 3 ITA.NO.1248/H/2015 M/S. GVK TECHNICAL AND CONSULTANCY PVT. LTD., SECUNDERABAD. (I) CIT VS. SABARI ENTERPRISES (2007) 298 ITR 141 (KAR.). (II) MAGUS CUSTOMERS DIALOG P. LTD., (2015) 371 ITR 242 (KAR.) (III) YUM RESTAURANT INDIA P. LTD., (2015) 371 ITR 139 (DEL.) (IV) CIT VS. NIPSO POLY FABRIKS LTD., (2013) 350 ITR 327 (HP) (V) CIT VS. NUCHEM LTD., (2015) 371 ITR 164 (P&H). 3. AGAINST THE RELIEF GRANTED BY THE LD. CIT(A), T HE REVENUE IS IN APPEAL BEFORE US. THE LD. D.R., REITE RATED THE FINDINGS OF THE A.O. WHILE THE LD. COUNSEL FOR THE ASSESSEE, RELIED UPON THE ORDER OF THE LD. CIT(A). THE LD. D.R. HAS ALSO PLACED RELIANCE UPON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF MERCHEM LT D., (2015) 61 TAXMANN.COM 119 (KERALA) IN SUPPORT OF HI S CONTENTION. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE HONBLE SUPREM E COURT IN THE CASE OF ALOM EXTRUSIONS 319 ITR 306 HA S HELD THAT THE CONTRIBUTIONS TO P.F. AND ESI ARE ALL OWABLE UNDER SECTION 43B OF THE ACT IF THEY ARE PAID BEFOR E THE DUE DATE OF FILING OF THE RETURN OF INCOME. THEREAF TER, THE ISSUE AROSE AS TO WHETHER THE DECISION OF ALOM EXTR USIONS (CITED SUPRA) WAS APPLICABLE ONLY TO THE EMPLOYERS CONTRIBUTION AND NOT TO THE EMPLOYEES CONTRIBUTION. VARIOUS HIGH COURTS HAVE HELD THAT THE DECISION OF 4 ITA.NO.1248/H/2015 M/S. GVK TECHNICAL AND CONSULTANCY PVT. LTD., SECUNDERABAD. HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION S (CITED SUPRA) IS APPLICABLE TO BOTH THE EMPLOYERS AS WELL AS EMPLOYEES CONTRIBUTION TO P.F. AND ESI. THE RES PECTIVE HIGH COURTS, IN THE FOLLOWING CASES, HAVE HELD THAT THE EMPLOYEES CONTRIBUTION IS ALSO AN ALLOWABLE DEDUCTI ON, PROVIDED, IT IS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN. (I) CIT VS. SABARI ENTERPRISES (2007) 298 ITR 141 (KAR.). (II) MAGUS CUSTOMERS DIALOG P. LTD., (2015) 371 ITR 242 (KAR.) (III) YUM RESTAURANT INDIA P. LTD., (2015) 371 ITR 139 (DEL.) (IV) CIT VS. NIPSO POLY FABRIKS LTD., (2013) 350 ITR 327 (HP) (V) CIT VS. NUCHEM LTD., (2015) 371 ITR 164 (P&H). 4.1. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF VBC INDUSTRIES LIMITED, HYDERABAD VS. DCIT, CIRCLE-3(3), HYDERABAD IN ITA.NOS.143 & 144/H/2013 ETC., DATED 08.05.2015 AND ALSO IN THE CASE OF M/S. VELJAN DENISON LIMITED, HYDERABAD VS. ADDL. CIT, RANGE-3, HYDERABAD IN ITA.NO.1251/HYD/2015 DATED 16.12.2015, HAS FOLLOWED THE HONBLE KARNATAKA, RAJASTHAN AND HIMACHAL PRADE SH HIGH COURTS TO HOLD THAT THE CONTRIBUTION OF THE EMPLOYEES CONTRIBUTION TO P.F. AND ESI IS ALSO ALLO WABLE IF IT IS PAID BEFORE THE DUE DATE OF FILING OF THE INC OME TAX 5 ITA.NO.1248/H/2015 M/S. GVK TECHNICAL AND CONSULTANCY PVT. LTD., SECUNDERABAD. RETURN. IN THE CASE BEFORE US, WE FIND THAT THE ASS ESSEE HAS FILED ITS RETURN OF INCOME ON 28.09.2012 I.E., BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME WHIL E THE PAYMENTS WERE MADE BY 05.01.2012. THEREFORE, THE AB OVE JUDGMENTS ARE APPLICABLE TO THE FACTS OF THE CASE B EFORE US AND WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.03.2016. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 24 TH MARCH, 2016 VBP/- COPY TO : 1. THE ACIT, CIRCLE - 2(2), 8 TH FLOOR, B BLOCK, ROOM NO.824, I.T. TOWERS, A.C. GUARDS, HYDERABAD-004. 2. M/S. GVK TECHNICAL AND CONSULTANCY PVT. LTD., PAIGAH HOUSE, 156-159, SARDAR PATEL ROAD, SECUNDERABAD 500 003. 3. CIT(A) - I I , HYDERABAD. 4. PR. CIT - II, HYDERABAD. 5. D.R. I TAT A BENCH, HYDERABAD. 6. GUARD FILE