DCIT CORPORATE CIRCLE 1 (2), CHENNAI V. M/S BAFFNA PHARMACEUTICALS LTD, CHENNAI

ITA 1436/CHNY/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7994 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 27-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MARUTHU PANDIAN
• Assessee Lawyers: A K JAIN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . , .. ', BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L.REDDY, JUDICIAL MEMBER ./ ITA NO.1436/CHNY/2018 $% % /ASSESSMENT YEAR: 2014-15 THE DY. COMMISSIONER- OF INCOME TAX, CORPORATE CIRCLE-1(2), CHENNAI-34. VS. M/S.BAFNA PHARMACEUTICALS- LTD., NO.BAFNA TOWERS, 299, THAMBU CHETTY, BROADWAY, CHENNAI-600 001. [PAN: AAACB 3109 Q ] ( ( /APPELLANT) ( )*( /RESPONDENT) DEPARTMENT BY : MR.MARUTHU PANDIAN, ADDL. CIT ASSESSEE BY : MR.A.K.JAIN, CA 3 /DATE OF HEARING : 11.09.2018 3 /DATE OF PRONOUNCEMENT : 24.09.2018 / O R D E R PER DUVVURU R.L.REDDY, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-1, CHENNAI, IN ITA NO.482/CIT(A)- 1/2016-17 DATED 31.01.2018 FOR THE AY 2014-15. 2. THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING OF DRUGS AND MEDICINES AND FILED ITS RETURN OF INCOME ON 16.10.2 014 ADMITTING NIL ITA NO.1436/CHNY/2018 :- 2 -: INCOME AND MENTIONING CURRENT LOSS OF RS.81,52,691/ -. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143 (2) OF THE ACT WAS ISSUED ON 18.09.2015. AFTER CONSIDERING THE DETAIL S FILED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THE ASSE SSMENT U/S.143(3) WAS COMPLETED AND DETERMINED THE INCOME AT RS.25,32 ,894/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO HAS NO TICED THAT THE CONTRIBUTION TO PF & ESI COLLECTED FROM THE EMPLOYE ES HAS BEEN REMITTED BELATEDLY. ACCORDINGLY, THE AO TREATED THE DELAYED PAYMENTS REPRESENTING EMPLOYEES CONTRIBUTION TOWARDS PF & ESI OF RS.51,53 ,578/- AS THE INCOME OF THE ASSESSEE AND BROUGHT TO TAX U/S.2(24)(X) R.W .S.36(1)(VA) OF THE ACT. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD.CIT(A) AND CHALLENGED THE ABOVE SAID DISALLOWANCE. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND BY RELYING UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD. IN TCA NO.585 & 586 OF 2016 & MP NO.1 OF 2015 DATED 24.07.2015, LD.CIT(A) DELETED THE ADDITION AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL AND CHALLENGED THE ISSUE WITH REGARD TO BELATED REMITTA NCES OF EMPLOYEES CONTRIBUTION TOWARDS PF & ESI. THE LD.DR HAS SUBMI TTED THAT THE ITA NO.1436/CHNY/2018 :- 3 -: EMPLOYEES CONTRIBUTION OF ESI & PF ARE GOVERNED BY SEC.36(1)(VA) OF THE ACT AND NOT U/S.43B OF THE ACT. LD.COUSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF A LOM EXTRUSIONS REPORTED IN 319 ITR 306 (SC) AND ALSO RELIED UPON THE DECISI ON OF IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. L TD. IN TCA NO.585 & 586 OF 2016 & MP NO.1 OF 2015 DATED 24.07.2015 AND HE F URTHER SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE APEX COURT. THEREFORE, THE ORDERS P ASSED BY THE LD.CIT(A) BE CONFIRMED. 6. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH TH E MATERIALS PLACED ON RECORD. DURING THE COURSE OF THE ASSESSM ENT PROCEEDINGS, THE AO NOTICED THAT FROM FORM-3CD THAT THE CONTRIBUTION S TOWARDS PF & ESI OF RS.51,53,578/- HAVE BEEN REMITTED BELATEDLY. HOWEVE R, THE AO AS WELL AS THE LD.CIT(A) HAS NOT MENTIONED ANYWHERE IN THEIR O RDER THAT THE ASSESSEE HAS REMITTED THIS AMOUNT BEFORE FILING OF THE RETURN OF INCOME. THE ASSESSEE HAS NOT FILED BEFORE US TO ESTABLISH T HAT THE SAID AMOUNT OF RS.51,53,578/- HAS BEEN REMITTED BEFORE FILING OF T HE RETURN OF INCOME. THEREFORE, WE REMIT THE ISSUE TO THE FILE OF THE AO TO CALL FOR AND TO VERIFY THE AMOUNTS REMITTED BY THE ASSESSEE. IF THE ASSES SEE REMITTED THE AMOUNT PRIOR TO FILING OF THE RETURN OF INCOME, THE ASSESSEE IS ELIGIBLE TO CLAIM IT AS DEDUCTION U/S.43B OF THE ACT. THE ASSE SSEE IS DIRECTED TO PRODUCE THE DETAILS OF REMITTANCE OF RS.51,53,578/- . THUS, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. ITA NO.1436/CHNY/2018 :- 4 -: 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 24 TH DAY OF SEPTEMBER, 2018, IN CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER ( . . ' ) ( DUVVURU R.L. REDDY ) $ /JUDICIAL MEMBER /CHENNAI, 8 /DATED: SEPTEMBER 24, 2018. TLN 3 )$9: ;: /COPY TO: 1. ( /APPELLANT 4. < /CIT 2. )*( /RESPONDENT 5. : )$$ /DR 3. < ( ) /CIT(A) 6. % /GF