Industrial Security And Allied Services Pvt. Ltd., Bhubaneswar V. ITO, Ward-1(1), Bhubaneswar

ITA 131/CTK/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7236 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P K SAHOO
• Keywords: Business income
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 131 /CTK/201 8 ASSESSMENT YEAR : 201 4 - 2015 INDUSTRIAL SECURITY AND ALLIED SERVICES PVT LTD.,F - 3/F - 5, INDRADHANU MARKET, IRC VILLAGE, BHUBANESWAR. VS. ITO, WARD 1(1), BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.SAHOO, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 31 /0 7 / 2018 DATE OF PRONOUNCEMENT : 31 /0 7 / 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 20.2.2018 FOR THE ASSESSMENT YEAR 2014 - 15. 2. GROUND NO.1 OF APPEAL READS AS UNDER: 1. THE ORDER OF LD CIT(A) CONFIRMING THE ADDITION OF EPF OF RS.43,66,585/ AND ESI OF RS.8,53,870/ - UNDER SECTION 36(1)(VA) MADE BY THE ITO WARD 1(1), BHUBANESWAR IN COMPUTING THE BUSINESS INCOME OF THE ASSESSEE IS ARB ITRARY TO LAW AND THE FACTS OF THE CASE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT DEPOSITED AN AMOUNT OF RS.43,66,585/ - TOWARDS EMPLOYEES CONTRIBUTION TO PF AND RS.8,53,870/ - TOWARDS EMPLOYEES 2 ITA NO.131/CTK/2018 ASSESSMENT YEAR : 2014 - 2015 CONTRIBUTION TO ESI U/S.36(1)(VA) OF THE ACT WITHIN THE PRESCRIBED UNDER THE RESPECTIVE ACT AND, THEREFORE, MADE ADDITION OF RS.52,20,455/ - TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION, 366 ITR 170(GUJ) AND THE CBDT CIRCULAR NO.22 OF 2015 DATED 17.12.2015. 5. BEFORE US, LD A.R. SUBMITTED THAT AS THE EMPLOYEES CONTRIBUTION TO PF AND ESI IS DEPOSITED IN THE RESPECTIVE AUTHORITIES BEFORE THE DUE DATE OF FILING RETURN OF INCOME U/S.139(1), THEREFORE, SAME DESERVES TO BE ALLOWED. 6. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORIT IES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS OBSERVED THAT AN AMOUNT OF RS.43,66,585/ - TOWARDS EMPLOYES CONTRIBUTION TO PF AND RS.8,53,870/ - TOWARDS EMPLOYEES CONTRIBUTION TO ESI U/S.36(1)(VA) OF THE ACT WAS NOT DEPOSITED WITHIN THE PRESCRIBED DUE DATE UNDER THE RESPECTIVE ACT AND, THEREFORE, MADE ADDITION OF RS.52,20,455/ - TO THE INCOME OF THE ASSESSEE. 8. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 9. ON PERUSAL OF ASSESSMENT ORDER AT PAGE 1 TO 2 , WE FIND THAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUTION TO PF AND ESI BEFORE 3 ITA NO.131/CTK/2018 ASSESSMENT YEAR : 2014 - 2015 FILING OF THE RETURN OF INCOME U/S.139(1) OF THE ACT. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF PR. CIT V S RAJASTHAN BEVERAGE CORPORATION LTD., (2017) 84 TAXMAN. COM 185 (SC), HAS HELD AS UNDER: SECTION 43B, READ WITH SECTION 36(1)(VA), OF THE INCOME TAX ACT, 1961 - BUSINESS DISALLOWANCE - CERTAIN DEDUCTION TO BE ALLOWED ONLY ON `ACTUAL PAYMENT (PF & ESI CONSTRU CTION) - HIGH COURT BY THE IMPUGNED ORDER HELD THAT AMOUNT CLAIMED ON PAYMENT OF PF AND ESI HAVING BEEN DEPOSITED ON OR BEFORE DUE DATE OF FILING OF RETURNS, SAME COULD NOT BE DISALLOWED UNDER SECTION 43B OR UNDER SECTION 36(1)(VA) - WHETHER SLP AGAINST SAID IMPUGNED ORDER WAS TO BE DISMISSED - HELD YES (PARA 2) IN FAVOUR OF ASSESSEE. 10. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN BEVERAGE CORPORATION LTD., (SUPRA), WE DELETE THE ADDITION OF RS .52,20,455 / - MADE BY TH E ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 11. GROUND NO.2 OF APPEAL READS AS UNDER: 2. THE ORDER OF THE CIT(A) CONFIRMING THE ADDITION OF RENT PAID AMOUNTING TO RS.3,78,000/ - WITHOUT DEDUCTION OF TDS U/S.40(A)(IA) IS NOT JUSTIFIED AND BAD IN LAW. 12. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS.3,78,000/ - TO SMT. SUNANDA NAYAK WITHOUT DEDUCTION OF TAX AT SOURCE U/S.194 I OF THE ACT. THEREFORE, THE ASSESSING OFFICER DISALLOWED THE SAME U/S.40(A)(IA) OF THE ACT. 13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4 ITA NO.131/CTK/2018 ASSESSMENT YEAR : 2014 - 2015 14. BEFORE US, LD A.R. SUBMITTED THAT THE AMOUNT OF R.3,78,000/ - PAID TO SMT. SUNANDA NAYAK BY CHEQUE AND, THEREFORE, SAME SHOULD BE ALLOWED AS DEDUCTION. 15. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORI TIES. 1 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS PAID RS.3,78,000/ - TO SMT. SUNANDA NAYAK TOWARDS HOUSE RENT BY CHEQUE. IF THE RECIPIENT OF THE AMOUNT SMT. SUNANDA NAYAK HAS DISCLOSED HAS DISCLOSED THE AMOUNT RECEIVED FROM THE ASSESSEE IN HER RETURN OF INCOME AND PAID DUE TAX THEREON , I N VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., 377 ITR 635 (DEL), THEN, NO DISALLOWANCE IN THE HANDS OF THE ASSESSEE IS CALLED FOR. THEREFORE , W E SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER T HE RECIPIENT SMT. SUNANDA NAYAK HAS DISCLOSED THE AMOUNT RECEIVED FROM THE ASSESSEE IN HER RETURN OF INCOME OR NOT. IF HE FINDS THAT THE RECIPIENT HAS DISCLOSED THE AMOUNT IN HER RETURN OF INCOME, THEN NO DISALLOWANCE SHOULD BE MADE. WITH THESE DIRECTIO NS, THE ISSUE IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO RE - ADJUDICATE THE ISSUE. HENCE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 17. GROUND NO.3 OF APPEAL READS AS UNDER: 5 ITA NO.131/CTK/2018 ASSESSMENT YEAR : 2014 - 2015 THE ORDER OF THE CIT(A) CONFIRMING THE ADDITION OF DIFFERENTIAL AMOUNT OF RECEIPTS AS PER 26AS AND AS PER PROFIT AND LOSS ACCOUNT AMOUNTING TO RS.1,89,971/ - IS NOT JUSTIFIED AND NOT CORRECT. 18. THE ASSESSING OFFICER, ON VERIFICATION OF DETAILS OF THE RECEIPTS DISCLOSED BY THE ASSESSEE IN THE ACCOUNTS WIT H THE DETAILS OF RECEIPTS DISCLOSED IN 26AS STATEMENT, FOUND THAT RECEIPTS TO THE EXTENT OF RS.1,89,971/ - HAVE NOT BEEN DISCLOSED BY THE ASSESSEE AND, THEREFORE, SAME WAS TREATED AS UNDISCLOSED RECEIPTS AND ADDED TO THE INCOME OF THE ASSESSEE. 19. ON APPEA L, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT 26AS STATEMENT CLEARLY REVEALED THAT THE ASSESSEE HAS FAILED TO DISCLOSE RECEIPTS FROM CERTAIN PARTIES AND HAS ALSO FAILED TO RECONCILE THE DISCREPANCIES FOUND IN THIS RESPECT I N THE 26AS STATEMENT. 20. BEFORE US, LD A.R. OF THE ASSESSEE HAS ALSO FAILED TO RECONCILE THE DISCREPANCIES FOUND IN 26AS STATEMENT. 21. IN VIEW OF ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS GROUND, WHICH IS HEREBY CONFIRMED AND DISMISS THIS GROUND OF APPEAL. 22. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 31 /0 7 /2018. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 31 /0 7 /2018 B.K.PARIDA, SPS 6 ITA NO.131/CTK/2018 ASSESSMENT YEAR : 2014 - 2015 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : INDUSTRIAL SECURITY AND ALLIED SERVICES PVT LTD.,F - 3/F - 5, INDRADHANU MARKET, IRC VILLAGE, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 1(1), BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//