ACIT, CHENNAI V. Deccan Overseas Exports Limited, CHENNAI

ITA 1414/CHNY/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8161 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 13-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2013
• Court: TRIBUNAL
• Department Lawyers: A B KOLIJCITD R
• Assessee Lawyers: S SRIDHAR
• Keywords: Question of law
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! . ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1414 /MDS./2013 ( / ASSESSMENT YEAR :2006-07) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(4), CHENNAI 600 034. VS. M/S.DECCAN OVERSEAS EXPORTS LIMITED , NO.4, 7 TH AVENUE, HARRINGTON ROAD, CHETPET, CHENNAI-31. PAN AACD 1951 C ( %& / APPELLANT ) ( '(%& / RESPONDENT ) / APPELLANT BY : MR.A.B.KOLI, JCIT,D.R / RESPONDENT BY : MR.S.SRIDHAR,ADVOCATE ! / DATE OF HEARING : 13.01.2016 '# ! /DATE OF PRONOUNCEMENT : 22.01.2016 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-IX, CH ENNAI DATED 28.03.2013 PERTAINING TO THE ASSESSMENT YEAR 2006-0 7. ITA NO.1414/MDS/2013 2 2. THE FIRST GROUND FOR CONSIDERATION IS WITH REG ARD TO DELETION OF DISALLOWANCE OF ` 7,78,674/-, IN RESPECT OF CONTRIBUTION TO THE EMPLOYEES PF & ESI U/S.43B OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY, ENGAGED IN THE BUSINESS OF EXPORT OF GARMENTS, FILE D ITS RETURN OF INCOME ON 30.11.2006 ADMITTING INCOME OF RS.1,15,58 ,170/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 31.12.2008 W ITH CERTAIN ADDITIONS. 4. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT THE FIRST GROUND RAISED IN THE APPEAL PERTAINING TO EMPLOYEE S CONTRIBUTION TOWARDS PF & ESI AFTER DUE DATE AS PRESCRIBED UNDER THE ACT. SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF M/S.FARIDA SHOES PVT. LTD., IN ITA NO.2102 & 2103/M DS./2015 VIDE ORDER DATED 08.01.2016 WHEREIN THE TRIBUNAL HELD A S FOLLOWS:- ITA NO.1414/MDS/2013 3 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THIS ISSUE WAS CONSIDERED BY THE JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT V. MIS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD. IN TC(APPEAL) NOS.585 & 586 OF 2015 DATED 24.7.2015 AND HELD AS UNDER:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUSIONS LTD. REPORTED IN 319 ITR 386, WHEREBY, THE SUPREME COURT HELD THA T OMISSION OF SECOND PROVISO TO SECTION 43B AND AMENDMENT TO FIRS T PROVISO BY FINANCE ACT, 2003 ARE CURATIVE AND ARE EFFECTIVE RE TROSPECTIVELY, I.E., WITH EFFECT FROM 1.4.1988 I.E., THE DATE OF I NSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT V. AMIL LTD. REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE H AD DEPOSITED EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER DUE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE TH E DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISAL LOWANCE COULD BE MADE IN VIEW OF THE PROVISIONS OF SECTION 43B AS AM ENDED BY FINANCE ACT, 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED T HE EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT W ITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME. HENCE, FOLLOW ING THE ABOVE- SAID DECISIONS, WE FIND NO REASON TO DIFFER WITH TH E FINDINGS OF THE TRIBUNAL. ACCORDINGLY, WE FIND NO QUESTION OF LAW M UCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N IN THESE APPEALS. ACCORDINGLY, BOTH THE TAX CASE (APPEALS) S TAND ITA NO.1414/MDS/2013 4 DISMISSED. NO COSTS. CONSEQUENTLY, M.P.NO. 1 OF 201 5 IS ALSO DISMISSED. IN VIEW OF THE ABOVE JUDGMENT OF THE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF L NCOME-TAX (APPEALS) AND THE SAME IS CONFIRMED. THIS GROUND OF APPEAL OF THE REV ENUE IS DISMISSED. SINCE THE ISSUE IN THIS APPEAL IS IDENTICAL AND SIM ILAR TO THE RATIO LAID DOWN BY THE TRIBUNAL IN THE ABOVE CITED CASE, WE AR E INCLINED TO DISMISS THE GROUND RAISED BY THE REVENUE. 5. THE SECOND GROUND FOR CONSIDERATION IS WITH REG ARD TO DELETION OF DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT IN RE SPECT OF THE PAYMENTS OF COMMISSION, CONTRACT PAYMENTS, PROFESSI ONAL CHARGES, SHIPPING AND FORWARDING EXPENSES, FREIGHT ON EXPORT S, CLEARING AND FORWARDING CHARGES. 6. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT SIMILAR ISSUE CAME CONSIDERATION BEFORE THIS TRIBUNAL IN TH E CASE OF SHRI ITA NO.1414/MDS/2013 5 N.PALANIVELU VS. ITO, SALEM REPORTED IN [2015] 40 ITR(TRIB.) 325(CHENNAI) WHEREIN IT WAS HELD THAT THE DISALLOWANCE UNDER SE CTION 40(A)(IA) OF THE ACT WAS NOT APPLICABLE, WHEN THERE WAS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF THE PREVIOUS YEAR. THE ASSESSEE FAILED TO BRING DETAILS OF OUTSTANDING EXP ENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE AMOUNT WAS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR IN THE NA ME OF THE PARTY OR OUTSTANDING EXPENSES. THE ASSESSING OFFICER WAS TO VERIFY THE MATTER AND EXAMINE AFRESH. IF NO AMOUNT WAS OUTSTANDING AT THE CLOSE OF THE PREVIOUS YEAR IN RESPECT OF THE EXPENSES EITHER AS OUTSTANDING EXPENSES OR AS SUNDRY CREDITORS, THE AMOUNT COULD N OT BE DISALLOWED. HENCE THE AMOUNT OUTSTANDING AS PAYABLE AT THE END OF THE CLOSE OF THE FINANCIAL YEAR I.E. 31 ST MARCH ONLY BE DISALLOWED BY APPLYING THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT. ACCORDINGL Y WE DIRECT THE LD. ASSESSING OFFICER TO DISALLOW THE ONLY AMOUNT WHICH IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR AND ACCORDINGLY FOR LIMITED PURPOSE TO VERIFY THE OUTSTANDING AMOUNT TOWARDS IMPUGNED AMOUNT AT THE END OF THE CL OSE OF THE ITA NO.1414/MDS/2013 6 PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, WE R EMIT THE ISSUE BACK TO THE FILE OF THE LD. ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL OF REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 22 ND OF JANUARY,2016 AT CHENNAI. SD/- SD/- ( . ) (G.PAVAN KUMAR) ( ( $% & ) ) '()*+,-*./001*-23. JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND JANUARY,2016. K S SUNDARAM. 45..67.87 /COPY TO: . 1. /APPELLANT 2. /RESPONDENT 3. . 9.'3 /CIT(A) 4. . 9 /CIT 5. 7:; .< /DR 6. ;=.> /GF