DCIT, Circle-3(1), Kolkata, Kolkata V. Shri Ramesh Prasad Sao, Kolkata

ITA 1299/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7964 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-07-2020
• Assessment Year: misc
• Appeal Filed On: 28-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Depreciation; Business expenditure; Search and seizure
• Section: 143(3); 22; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NOS.1875, 1300 & 1299/KOL/2019 ( / ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13) DCIT, CIRCLE-3(1), KOLKATA VS. SHRI RAMESH PRASAD SAO 91A/1. AVANI SIGNATURE, PARK STREET, 2 ND FLOOR, KOLKATA-700016 ./ ./PAN/GIR NO.: ALAPS 8363 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SUPRIYO PAL, ADDL. CIT RESPONDENT BY :SHRI MIRAJ D SHAH, A.R / DATE OF HEARING : 09/07/2020 /DATE OF PRONOUNCEMENT : 24/08/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED THREE APPEALS FILED BY THEREVENUE, PERTAINING TO ASSESSMENT YEARS2016-17, 2015-16 & 2012-13 RESPECTIVELY, ARE D IRECTED AGAINST THE SEPARATE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (AP PEAL), KOLKATA, WHICH IN TURN ARISE OUT OF SEPARATE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. SINCE THESE THREE APPEALS FILED BY THE REVENUE F OR ASSESSMENT YEARS 2016-17, 2015-16 & 2012-13 RESPECTIVELY CONTAIN COMMON AND I DENTICAL GROUNDS THEREFORE, THESE APPEALS HAVE BEEN CLUBBED AND HEARD TOGETHERA ND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVIT Y. SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. FIRST WE SHALL TAKE REVENUES APPEAL IN ITA NO. 1875/KOL/2019, FOR A.Y. 2016- 17,WHEREIN THE GROUNDS OF APPEAL RAISED BY THE REVE NUE ARE AS FOLLOWS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 2,63,708/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PERIPHERY DEVELOPMENT EXPENSES WHERE ASSESSEE HAS FAILED TO FURNISH ANY E VIDENCES TO ESTABLISH THAT THE ABOVE EXPENSES ARE RELATED TO BUSINESS EXPENSES AS PER THE MINING PROVISIONS AS THE ASSESSEE HAD MADE THOSE EXPENSES DIRECTLY WITHO UT CONTRIBUTING THE SAME IN PERIPHERY DEVELOPMENT FUND UNDER THE AEGIS OF THE PERIPHERY DEVELOPMENT SOCIETY AND PERIPHERY DEVELOPMENT COMMITTEE. 2. THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 1,84,620/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE EXCHANGE RATE FLUCTUATION. AS PER THE DETAILS SUBMISSION FILED BY THE ASSESSEE, THE ASSES SEE HAD NOT EXPORTED ANY RAW MATERIALS TO OVERSEAS COUNTRY IN WHICH THE EXCHANGE LOSS HAD ACCRUED. 3. THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2,54,61,464/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECI ATION WHERE THE ASSESSEE HAD NO ACTIVITY OF MINING DURING THE RELEVANT YEAR AND WAS ENGAGED ONLY IN LIFTING OF CLOSING STOCK DURING THE PERIOD AS PER ORDER OF THE HONBLE HIGH COURT, ODISHA. 4. THE APPELLANT CRAVES LEAVE TO MAKE ANY ADDITION, ALTERATION OR MODIFICATION ETC. OF THE GROUNDS EITHER BEFORE THE APPELLATE PROCEEDI NGS, OR IN THE COURSE OF APPELLATE PROCEEDINGS. 4. NOW, WE SHALL TAKE THESE GROUNDS ONE BY ONE 5.GROUND NO. 1 RAISED BY THE REVENUE IN ITA NOS.187 5, 1300 & 1299/KOL/2019, IS COMMON AND RELATES TO PERIPHERY D EVELOPMENT EXPENSES. 6. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE SC RUTINY PROCEEDINGS THE ASSESSING OFFICER NOTICED THATASSESSEE HAS DEBITED A SUM OF R S.2,63,708/- UNDER THE HEAD PERIPHERY DEVELOPMENT EXPENSES. PERIPHERY MEANS THE ENTIRE DISTRICT WHERE A PARTICULAR INDUSTRY OR MINING INDUSTRY IS SET UP. F OR KEONJHAR DISTRICT THERE IS A PERIPHERY DEVELOPMENT FUND (PDF) WHICH FUNCTIONS TH ROUGH TWO MAIN MECHANISMS - THE PERIPHERY DEVELOPMENT COMMITTEE (P DC) AND THE PERIPHERY DEVELOPMENT SOCIETY (PDS). THE PDS IS RESPONSIBLE F OR THE COLLECTION OF THE PERIPHERY DEVELOPMENT CONTRIBUTIONS FROM THE MINING COMPANIES AND FOR IMPLEMENTATION AND SUPERVISION OF THE DEVELOPMENT A CTIVITIES APPROVED BY THE PDC AND FUNDED FROM THE PERIPHERY DEVELOPMENT CONTR IBUTIONS. THE DIRECTOR OF MINES SERVES A DEMAND NOTICE TO INDIVIDUAL COMPANIE S TO COLLECT THEIR SHARE OF PERIPHERY DEVELOPMENT CONTRIBUTION AND THE ACTUAL C OLLECTION PROCEEDS ALONG THE SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 SAME ROUTE AS DOES ANY REVENUE COLLECTION BY THE DI STRICT ADMINISTRATION. THE PROJECTS ARE DIRECTLY IMPLEMENTED BY THE PDS OR THR OUGH THEIR LINE AGENCIES LIKE PWD. THE ASSESSING OFFICER EXAMINED THE LEDGER COP Y OF PERIPHERY DEVELOPMENT EXPENSES FILED BY ASSESSEE AND NOTICED THAT THESE E XPENSES WERE DIRECTLY MADE BY ASSESSEE ON FOOD RELIEF MATERIALS, BUILDING OF ROAD S AND TEMPLES ETC. INSTEAD OF CONTRIBUTION TO THE PDF. THE MODE OF EXPENDITURE FO R PERIPHERY DEVELOPMENT AS PER GOVERNMENT SCHEME, IS DIFFERENT THAN WHAT THE A SSESSEE CLAIMED. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THESE EXPENS ES WERE NOT BONAFIDE BUSINESS EXPENSES THEREFORE RS. 2,63,708/- WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 7. I HAVE GONE THROUGH THE ORDER OF THE ID. A.O. A ND SUBMISSIONS MADE BY THE LD. A.R. OF THE ASSESSEE. THERE IS NO DOUBT THAT CSR AC TIVITIES ARE BUSINESS EXPENDITURE. HOWEVER, EXPENSES AGAINST MALARIA ERAD ICATION, DISTRIBUTION OF MOSQUITO NETS, ETC. DO NOT APPEAR TO BE THE EXPENDI TURE IN THE CASE IN HAND AS CLAIMED BY ASSESSEE. AS NOTED BY THE LD. A.O., THEY ARE TOWARDS THE ORISSA FLOOD RELIEF AND BUILDING OF TEMPLE, ROAD, ETC. THIS EXPE NDITURE IS ALSO PART OF THE LEDGER ACCOUNT OF THE ASSESSEE. IT IS DONE IN CONSULTATION WITH STATE GOVERNMENT AUTHORITIES. THE LD. A.R. HAS SUBMITTED DETAILS OF VOUCHERS INCURRED TOWARDS PERIPHERAL DEVELOPMENT EXPENSES. THE ID. A.O. HAS N OT DOUBTED ANY OF THE VOUCHERS OR MEMOS. HE IS ONLY DOUBTING THE EXPENDIT URE ON ACCOUNT OF THE PROVISIONS OF INCOME-TAX ACT, 1961. HE HAS STATED T HAT EXPENDITURE ABOVE 5% IS NOT PERMITTED. 8. I AM AFRAID THE STAND OF THE A.O. CANNOT BE ACCE PTED. THE PERIPHERY DEVELOPMENT EXPENSES, IF INCURRED HAVE TO BE TAKEN AS A BUSINESS EXPENDITURE. THE MAXIMUM THAT WAS TO BE EXPLAINED AS PER THE ID. A.O. WAS 5%. HE HAS SORT OF ACCUSED THE ASSESSEE FOR SPENDING MORE THAT 5%. THI S STAND OF THE ID. A.O. CANNOT BE ACCEPTED IN AS MUCH AS HOW MUCH THE ASSESSEE SPE NDS LEGITIMATELY IS THE DECISION OF THE ASSESSEE. THE REVENUE CANNOT QUESTI ON THIS EXPENDITURE AS PER THE DECISION OF THE APEX COURT IN 288 ITR 1. 1 MAY CLAR IFY THAT THE DECISION IN THAKUR PRASAD SAO AND SONS PVT. LTD. WAS ON THE PROVISIONS OF SECTIONS 36 & 37 OF THE INCOME-TAX ACT, 1961. THERE IS NO DOUBT THAT CORPOR ATE SOCIAL RESPONSIBILITY IS VERY MUCH A BUSINESS EXPENDITURE AND COME WITHIN TH E REALM OF SECTIONS 36 AND 37 OF THE INCOME-TAX ACT, 1961. THE FAMOUS DECISION OFN. M. D.C LTD [ ITA NO. 1791/HYD/2008 DATED 30.09.2009] WOULD COME TO THE R ESCUE OF THE ASSESSEE. SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 9. I HAVE TAKEN THE SAME STAND IN A CONSOLIDATED OR DER IN THE CASE OF M/S. THAKUR PRASAD SAO AND SONS PVT. LTD. FOR THE ASSESSMENT YE ARS 2013-14 & 2014-15 AND THE SAME ASSESSEE, SHRI RAMESH PRASAD SAO FOR THE A SSESSMENT YEARS 2012-13, 2014-15 AND 2015-16. THERE IS NO REASON FOR ME TO D IGRESS. FOR THE SAKE OF CONSISTENCY, THE SAID MOUND IS ALLOWED. 8. AGGRIEVED THE ORDER OF THE LD. CIT(A) THE REVENU E IS IN APPEAL BEFORE US . 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GON E THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIAL AVAILABLE ON RECORD. BEFO RE US, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE S AME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND THE LD. C OUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD CIT(A). WE NOTE THAT THE PER IPHERY DEVELOPMENT EXPENSES ARE FOR THE PURPOSES OF WELFARE OF THE PEOPLES RESI DING NEARBY MINING ACTIVITIES AND IT IS RESPONSIBILITY OF THE COMPANY WHICH WAS CARRY ING OUT THE BUSINESS OF MINING AND IT IS MANDATORY FOR THE MINING INDUSTRY TO LOOK AFTER THE DEVELOPMENT OF THE AREA IN WHICH THE MINES AREOPERATING.THESE EXPENSES WERE WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE. THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HERE BY UPHELD AND THE GROUND NO. 1 RAISED BY THE REVENUE IN ITA NOS.1875, 1300 & 1299/ KOL/2019ARE DISMISSED. 10. GROUND NO. 2 RAISED BY THE REVENUE RELATES TO ADDITION ON ACCOUNT OF EXCHANGE RATE FLUCTUATION OF RS. 1,84,620/-. 11. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE S CRUTINY PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED AN AM OUNT OF RS. 1,84,620/- UNDER THE HEAD OF EXCHANGE RATE FLUCTUATION. THE AO WAS OF THE VIEW THAT THE ASSESSEE COMPANY HAD NOT EXPORTED ANY RAW MATERIALS TO OVERS EAS COUNTRY IN WHICH THE EXCHANGE LOSS HAD ACCRUED. THE ID. A.O. ALSO DISTIN GUISHED THE DECISION OF CIT VS. SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 WOODWARD GOVERNOR INDIA (P) LTD. 312 ITR 0254 (SC), AND MADE ADDITION OF RS. 1,84,620/-. 12. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 17. I HAVE GONE THROUGH THE ORDER OF THE ID. A.O. AND THE SUBMISSIONS MADE BY THE ASSESSEE. THERE IS NO DOUBT THERE WAS AN EXCHAN GE RATE FLUCTUATION ON PURCHASE OF PARTS OF AIRCRAFT. THE SAID SPAREPARTS WERE CHANGED AS PER THE RULES OF DGCA. THIS IS A MANDATORY REQUIREMENT. THUS, ONC E THE MANDATORY LOSS ARE BEING PURSUED, FOR A CAPACITY WHICH IS AS PER THE R EGULATIONS, THE SAID LOSS DOES NOT LEAD TO TRADING ACTIVITIES. IN MY VIEW, THE ID. A.O. HAS ERRED IN DISTINGUISHING WITH THE CASE OF WOODWARD GOVERNOR INDIA (P) LTD. O NCE AN ASSET IS PURCHASED, THE SAME GOES INTO THE BLOCK OF ASSETS. MOREOVER, T HE USE OF AIRCRAFT WAS A MANDATORY REQUIREMENT. IT IS IMPORTANT TO NOTE THAT THE ASSESSEE HAD STOPPED WORKING AS PER THE ORDER OF THE SUPREME COURT. THUS , THE ADDITION MADE BY THE ID. A.O. HAS NO LEGS TO STAND. THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO. 8. 13. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE R EVENUE IS IN APPEAL BEFORE US. 14. THE LD. DR FOR THE REVENUE BEFORE US, HAS PRIMA RILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTE D IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THELD CIT(A). 15. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE EXCHANGE LOSS WAS INCURRED ON ACCOUNT OF PURCHASE OF SPARE PARTS OF THE AIRCRAFT AND THE SAME HAD BEEN CAPITALIZED DURING THE RELEVANT YEAR. THE ASSESSEE OWNED AN AIRCRAFT ON WHICH EXPENSES WERE INCURRED EVERY YEAR TO ITS MAIN TENANCE AND SUCH EXPENSES WERE REVENUE IN NATURE AND ANY LOSS INCURRED FROM S UCH ACTIVITY IS ALSO REVENUE IN NATURE. AS PER POLICY OF DGCA, CERTAIN INTERNAL SPA RE PARTS OF AIRCRAFT ARE TO BE REPLACED. THE EXCHANGE LOSS WHICH AROSE ON ACCOUNT OF PURCHASE OF SPARE PARTS WAS CAPITALIZED AND EXCHANGE LOSS AROSE ON ACCOUNT OF UNDERTAKING REGULAR SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 6 66 6 MAINTENANCE HENCE IT IS A REVENUE EXPENSES.THAT BEI NG SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED . 16. GROUND NO. 3 RAISED BY THE REVENUE IN ITA NO.18 75/KOL/2019 AND ITA NO. 1300/KOL/2019 RELATES TO ADDITION OF RS. 2,54,61,46 4/- ON ACCOUNT OF DEPRECIATION. 17. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE A SSESSMENT PROCEEDINGS THE LD. A.O. EXAMINED THE TAX AUDIT REPORT AND BALANCE SHEE T AS WELL AS SUBMISSION GIVEN BY THE ASSESSEE. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS NOT FOLLOWED EXTRACTION OF IRON ORE DURING THE RELEVANT YEAR AND HE HAD NO ACTIVITY OF MINING DURING THE RELEVANT YEAR AND WAS ENGAGED ONLY LIFT ING OF CLOSING STOCK DURING THE YEAR, THEREFORE, ASSESSING OFFICER MADE AN ADDITION OF RS.2,54,61,464/-. 18. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 13. I HAVE GONE THROUGH THE ORDER OF THE ID. A.O. AND THE SUBMISSIONS MADE BY THE ASSESSEE. THE ISSUE HERE IS THAT THE MINING COM PANY WAS A RUNNING COMPANY. IT HAD STOPPED PRODUCTION FOR THE TIME BEING IN ORD ER TO CATER TO THE DECISION OF THE HONBLE SUPREME COURT. IMPORTANTLY, WHEN AN ASS ET IS PROCURED, IT GOES INTO THE BLOCK OF ASSETS. THE ONLY ASPECT IS THE USE. IF AN ASSET GOES INTO THE BLOCK OF ASSETS, THE SAME GOES INTO DEPRECIATION. THERE IS N O DOUBT THAT THE ASSESSEE WAS ALSO THE OWNER OF THE MACHINERY. THE DECISION OF TH E CALCUTTA HIGH COURT IN CIT VS. NORPLEX OAK INDIA REPORTED IN 198 TAXMAN 0470 CLEARLY DECIDES THE CASE IN FAVOUR OF THE ASSESSEE. IN PARA NOS. 11 TO 17, THE ISSUE HAS BEEN DEALT AT LENGTH AND IN FAVOUR OF THE ASSESSEE. IN THE LIGHT OF THE ABOVE DISCUSSION, THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO.7 19. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 20. THE LD. DR FOR THE REVENUE BEFORE US, HAS PRIMA RILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTE D IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD CIT(A). SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 7 77 7 21. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE ORDER OF LD CIT(A) AND WE NOTE THAT THERE IS NO ANY INFIR MITY IN THE ORDER OF LD CIT(A).THAT BEING SO, WE DECLINE TO INTERFERE IN TH E ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY UPHELD A ND THE GROUND NO. 3 RAISED BY THE REVENUE IN ITA NO.1875/KOL/2019 AND ITA NO. 1300/KO L/2019 ARE DISMISSED. 22. NOW WE SHALL TAKE REVENUES APPEAL IN ITA NO. 1 300/KOL/2019 FOR A.Y. 2015- 16 WHEREIN GROUND NO. 2 RAISED BY THE REVENUE READS AS FOLLOWS: 2. THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2,93,237/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE EMPLOYEE S CONTRIBUTION TO PF. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AS BECAUSE IT VIOLATES THE PROVISION OF SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) OF THE I. T . ACT AND IT CONTRADICTS THE BOARDS CIRCULAR NO. 22/2015 DATED 17.12.2015, PARA NO. 5 W HERE IT IS CLARIFIED THAT THIS CIRCULAR DOES NOT APPLY TO CLAIM OF DEDUCTION RELAT ING TO EMPLOYEES CONTRIBUTION TO WELFARE FUND WHICH ARE GOVERNED BY SECTION 36(1) (VA) OF THE ACT. 23. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE S CRUTINY PROCEEDINGS THE ASSESSING OFFICER EXAMINED THE TAX AUDIT REPORT AND NOTICED T HAT EMPLOYEES CONTRIBUTION TO PF WAS DEPOSITED TO THE RESPECTIVE ACCOUNTS BEYOND THE GRACE PERIOD OF 5 DAYS, THEREFORE HE MADE ADDITION OF RS. 2,93,237/-. 24. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 11. I HAVE CONSIDERED THE ARGUMENTS OF THE ID. A.O . AS WELL AS THE CONTENTIONS MADE BY THE ID. A.R. OF THE ASSESSEE. THIS ISSUE HAS BEEN DECID ED BY THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF ANIMESH SADHU VS. A.C.I.T. IN ITA NO . 11/KOLKATA./2013 WHEN IT HAS BEEN STATED IN PARA 3, 4 AND 5 AS UNDER:- 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE ID. A.R. THAT IN GROUND NO.1 THE ASSESSEE HAS CHALLENGED THE ACTION OF THE ID. CIT(APPEALS) IN CONFIRMING THE DISALLOWANCE OF THE EMPLOYEES CONTR IBUTION TO THE PROVIDENT FUND WHICH WAS PAID WITHIN THE PRESCRIBED DUE DATE. IT WAS THE SUBMISSION THAT THE EMPLOYEES CONTRIBUTION TO PROV IDENT FUND WAS PAID SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 8 88 8 ON 14.02.2008 FOR WHICH HE SHOWED THE COPY OF THE C HALLANS AT PAGE 23 OF THE PAPER BOOK. IT WAS THE SUBMISSION THAT THE ASSE SSMENT YEAR WAS 2008- 09. IT WAS THE SUBMISSION THAT IN VIEW OF THE DECIS ION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT -VS.- VIJAY SHREE LIMITED REPORTED IN 224 TAXMAN 12 (CAL.) THE DISALLOWANCE W AS LIABLE TO BE DELETED. 4. IN REPLY, THE ID. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND HAS B EEN PAID BEFORE THE DUE DATE OF FILING OF THE RETURN AS ALSO BEFORE 31 ST MARCH, 2008, IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF VIJAY SHREE LIMITED REFERRED TO SUPRA, THE DISALLOWANCE A S MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE ID. CIT(A PPEALS) STANDS DELETED. CONSEQUENTLY GROUND NO. 1 OF THE ASSESSEE' S APPEAL STANDS ALLOWED. 12. CONSIDERING THE FACT THAT THE JURISDICTIONAL HI GH COURT AS WELL AS JURISDICTIONALTRIBUNAL HAS DECIDED THE ISSUE THAT T HE ASSESSEE MAY CONTRIBUTE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, THERE CAN B E NO ARGUMENT ON THE ISSUE. THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO. 3. 25. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 26. THE LD. DR FOR THE REVENUE BEFORE US HAS PRIMAR ILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTE D IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD CIT(A). 27. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT CONTRIBUTION TOWARDS PF WAS MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING RETURN OF INCOME AND BEFORE 31 ST MARCH, 2008.WE NOTE THAT HONBLE JURISDICTIONAL HI GH COURT OF CALCUTTA IN THE CASE OF CIT -VS.- VIJAY SHREE LIMIT ED REPORTED IN 224 TAXMAN 12 (CAL.), HAS HELD THAT IF THE PF CONTRIBUTION IS MAD E BY THE ASSESSEE BEFORE THE DUE DATE OF FILING RETURN OF INCOME THEN IT WOULD BE S UFFICIENT COMPLIANCE AND NO SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 9 99 9 ADDITION SHOULD BE MADE.THAT BEING SO, WE DECLINE T O INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HERE BY UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 28. NOW WE SHALL TAKE REVENUES APPEAL IN ITA NO. 1299/KOL/2019 FOR A.Y. 2012-13 WHEREIN GROUND NO. 2 RAISED BY THE REVENUE READS AS FOLLOWS: 2. THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2,35,89,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRES SION OF SALE. AS PER BALANCE SHEET AND TAX AUDIT REPORT THE ASSESSEE HAD SHOWN S HORTAGE OR WASTAGE OF 7863 M. T. IRON ORE, WHILE AS PER H-1 FORM THERE WAS NO ENTRY OF WASTAGE OR SHORTAGE OF IRON ORE. 29. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF MINING OF IRON ORE. THE ASSESSING OFFIC ER OBSERVED THAT IN WRITTEN SUBMISSION SHORTAGE TO THE EXTENT OF RS. 7863 MT OF IRON ORE, HAS BEEN SHOWN WHICH IS ALSO SHOWN IN THE AUDITED ACCOUNTS, THEREF OREASSESSING OFFICER ADDED A SUM OF RS. 3,14,52,000/- AT THE MARKET APPARENT PRI CE AND ON THE BASIS OF IRON ORE. 30. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICE R, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 8. I HAVE GONE THROUGH THE ORDER OF THE LD. ASSESS ING OFFICER AND THE ASSESSEE. THERE IS NO DOUBT THAT THE BALANCE SHEET AND H1 ANA LYSIS HAVE BEEN PREPARED ON TWO DIFFERENT STATES AND PERIOD. THUS, TAKING THEM AS THE DIFFERENCE WOULD BE AN ERROR. I HAVE CHECKED THE TWO ANALYSIS AND THE BOOK S OF ACCOUNTS CAREFULLY U/S 250(4) OF THE INCOME TAX ACT, 1961. I HAVE FOUND NO DIFFERENCE. AS SUCH, ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO. 3. 31. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE R EVENUE IS IN APPEAL BEFORE US. 32. THE LD. DR FOR THE REVENUE HAS PRIMARILY REIT ERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OU R EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON T HE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD CIT( A). SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 33. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY G ONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE DIFFERENCE WAS BASICALLY DUE TO REC ONCILIATION OF OPENING BALANCE AS SHOWN IN THE BALANCE SHEET AND FORM H1. THE LATTER IS PREPARED IN THE MONTH OF MAY AND STOCK TAKEN IN H1 IS ON THE BASIS OF VOLUME TRIC ANALYSIS. WE NOTE THAT LD CIT(A) EXAMINED THE RECONCILIATION STATEMENT SUBMIT TED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND HE FOUND IT CORRECT.T HAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HI S ORDER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE I S DISMISSED. 34. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 24.08.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 24/08/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-3(1), KOLKATA 2. SHRI RAMESH PRASAD SAO 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES SHRI RAMESH PRASAD SAO ITA NOS. 1875,1300 & 1299/KOL/2019 ASSESSMENT YEARS:2016-17, 2015-16 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1