Synbiotics Ltd., Baroda V. The Income tax Officer,Ward-4(3), Baroda

ITA 1321/AHD/2009

• Counselvise Citation: 132120514 RSA 2009
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 23-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: M K PATEL
• Section: 43B; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 1321/ AHD/2009 (ASSESSMENT YEAR 2003-04) M/S. SYNBIOTICS LTD., WADI, BARODA - 390023 VS. ITO, WARD 4(3), BARODA PAN/GIR NO. : AACCS9831Q (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M K PATEL, AR RESPONDENT BY: SHRI C.K. MISHRA, SR. DR DATE OF HEARING: 05.01.2012 DATE OF PRONOUNCEMENT: 31.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-III, BARODA DATED 03.03.2009 FOR THE ASSESSM ENT YEAR 2003-04. VARIOUS GROUNDS ARE RAISED BY THE ASSESSEE BUT THE GRIEVANCE OF THE ASSESSEE IS REGARDING DISALLOWANCE OF INTEREST OF R S.6,41,867/- FOR THE DELAY IN PAYMENT OF PF CONTRIBUTION AND INTEREST OF RS.9,15,564/- FOR DELAY IN PAYMENT OF ESI CONTRIBUTION. 2. IT IS SUBMITTED BY THE LD. A.R. THAT THESE INTER EST PAYMENTS FOR LATE DEPOSIT OF PF & ESI CONTRIBUTION IS COMPENSATORY IN NATURE AND NOT PENAL IN NATURE AND, THEREFORE, THE SAME SHOULD BE ALLOWE D. HE ALSO SUBMITTED THAT THE EVIDENCE OF PAYMENT OF THESE INTERESTS IS AVAILABLE IN THE PAPER BOOK. IT WAS POINTED OUT BY THE BENCH THAT THE PAY MENT IS NOT IN THE PRESENT YEAR THEN HOW THE SAME CAN BE ALLOWED IN TH E PRESENT YEAR IN VIEW I.T.A.NO. 1321 /AHD/2009 2 OF THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT, 1961? IT WAS SUBMITTED BY THE LD. A.R. THAT DIRECTION MAY BE GIV EN TO ALLOW DEDUCTION IN THE YEAR OF PAYMENT. 3. AS AGAINST THIS, LD. D.R. OF THE REVENUE SUPPORT ED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF PF AND ESI ACT AND WE FIND THAT IN ADDITION TO THE PAYMENT OF INTEREST FOR DELAY IN PA YMENT OF PF & ESI CONTRIBUTION, PENALTY PROVISIONS ARE THERE IN BOTH THESE ACTS AND CONSIDERING THESE PROVISIONS OF PF ACT AND ESI ACT AND THE FACTS OF THE PRESENT CASE, WE ARE OF THE CONSIDERED ONION THAT T HE INTEREST PAYMENT FOR DELAY IN PAYMENT OF PF & ESI CONTRIBUTION IS COMPEN SATORY IN NATURE AND NOT PENAL IN NATURE AND, THEREFORE, EXPLANATION TO SECTION 37(1) IS NOT APPLICABLE. BUT SINCE THE PAYMENT OF THESE INTERES TS WERE NOT MADE IN THE PRESENT YEAR, DEDUCTION IS NOT ALLOWABLE IN THE PRE SENT YEAR IN VIEW OF THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT, 19 61. WE, THEREFORE, DIRECT THE A.O. THAT DEDUCTION SHOULD BE ALLOWED IN THE YEAR IN WHICH PAYMENT HAS BEEN MADE BY THE ASSESSEE OF THESE INTE RESTS AS PER THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT, 19 61. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP I.T.A.NO. 1321 /AHD/2009 3 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 30/1 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31/1.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.31/1 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/1 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/1 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/1/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .