Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 2337 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-01-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2008-2009
Appeal Filed On
28-12-2016
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1346/IND/2016 ASSESSMENT YEAR: 2008-09 BAJRANG AGRO INDUSTRIES PVT. LTD. VIKRAM TOWER, 1 ST FLOOR, SAPNA- SANGEETA ROAD, INDORE / VS. D CIT - 5(1) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AABCB3958N ITA NO.1538/IND/2016 ASSESSMENT YEAR: 2008-09 DCIT - 1 (1) INDORE / VS. BAJRANG AGRO INDUSTRIES PVT. LTD. VIKRAM TOWER, 1 ST FLOOR, SAPNA- SANGEETA ROAD, INDORE ( REVENUE ) ( RESPONDENT ) P.A. NO. AABCB3958N APPELLANT BY SHRI ANIL KAMAL GARG, & ARPIT GAUR CA S RESPONDENT BY SHRI K.G. GOYAL , SR. DR DATE OF HEARING: 16.01.2018 DATE OF PRONOUNCEMENT: 31.01.2018 / O R D E R PER KUL BHARAT, J.M: THESE TWO CROSS APPEALS BY THE ASSESSEE AND REVENUE PERTAINING TO THE A.Y. 2008-09 DIRECTED AGAINST ORD ER OF LD. B AJRANG AGRO INDUSTRIES PVT. LTD. 2 COMMISSIONER OF INCOME TAX-(APPEALS)-I, DATED 26.09 .2016 RESPECTIVELY. FIRST, WE TAKE UP ASSESSEES APPEAL IN ITA NO.1346/ IND/2016, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT, THE LD. CIT(A) GROSSLY ERRED IN CONFIRMIN G THE ADDITION OF RS.2,86,991/- MADE BY THE AO IN THE APPELLANTS INCOME, ON ACCOUNT OF DELAY IN DEPOSITS OF EMPLOYEES CONTRIBU TION TO PROVIDENT FUND, BY INVOLVING THE PROVISIONS OF SECT ION 36(1)(VA) OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE MATERIAL FACT THAT THE ENTIRE AMOUNT OF EMPLOYEES CONTRIBUTI ON WAS DULY DEPOSITED BY THE APPELLANT COMPANY BEFORE FURNISHIN G ITS RETURN OF INCOME U/S. 139(1) OF THE ACT. 2 . BRIEFLY STATES FACTS ARE THAT IN PURSUANCE TO THE ORDER PASSED U/S 263. THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 26 3 R.W.S 143(3) THEREBY. HE MADE ADDITION ON ACCOUNT OF DISALLOWANC E OF FREIGHT CHARGES AND LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND OF RS.47,66,567/- AND RS.2,86,991/- RESPECTIVE LY. 3. AGGRIEVED BY THIS THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL THEREBY THE LD. CIT(A) DELETED THE ADDITION IN RESPECT OF DISALLOWANCE OF FREIGHT CHARGES, HOWEVER, SUSTAINED THE ADDITION MADE ON ACCOUNT OF NON-DEPOSIT OF EMPLOYEES CONTRIB UTION. AGAINST THIS ORDER BOTH REVENUE AND THE ASSESSEE ARE IN APP EAL. IN THE PRESENT APPEAL, THE ASSESSEE HAS CHALLENGED THE CON FIRMATION OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF LATE PA YMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. THUS, TH E ONLY EFFECTIVE GROUND IN THE CONFIRMING THE ADDITION OF RS.2,86,99 1/- MADE ON B AJRANG AGRO INDUSTRIES PVT. LTD. 3 ACCOUNT OF DELAY IN DEPOSITS OF EMPLOYEES CONTRIBU TION TO PROVIDENT FUND. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CLAIM IS DISALLOWED PURELY ON THE BASIS THAT THE AMOUNT SO D EDUCTED WAS DEPOSITED LATE AS PER CONCERNED ACT HOWEVER IT IS S TATED THAT THE AMOUNT WAS DEPOSITED PRIOR TO FURNISHING OF RETURN OF INCOME. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD. CIT(A). ON THE CONTRARY LD . DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE BY RELYING UPON THE JUDGMENT OF HON'BLE KERALA HIGH COURT IN THE CA SE OF CIT VS. MERCHEM LTD. (2015) 9 TMI 560 (KER.). IT IS CONTENT ION OF THE LD. COUNSEL FOR THE ASSESSEE THAT OTHER HIGH COURTS HAV E DECIDED IN FAVOUR OF THE ASSESSEE AND THE HON'BLE SUPREME COUR T IN THE CASE OF CIT VS. VINAY CEMENT LTD. (2007) 213 CTR (HON'BLE S UPREME COURT) 268. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UP ON THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CAS E OF CENTRAL OFFICE MEWAR PALACE ORGANIZATION PVT. LTD. VS. JCIT , (2017)(1) TMI 677. THE HON'BLE COURT DECIDED THE QUESTION AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE HON'BLE COURT HA S EXAMINED THE JUDGMENT OF HON'BLE KERALA HIGH COURT. THE HON'BLE HIGH COURT HELD AS UNDER: 28. IN MERCHEM LTD.'S CASE (SUPRA), HEAVILY RELIED UPON BY THE (18 OF 20 ) [ITA-55/2009 & ONE CONNECTED MATTER] REVENUE, THE KERALA HIGH COURT WHILE DISAGREEING WI TH THE VIEW B AJRANG AGRO INDUSTRIES PVT. LTD. 4 TAKEN BY THE VARIOUS HIGH COURTS AND EXPLAINING THE DECISION OF THE HON'BLE SUPREME COURT IN ALOM EXTRUSION'S CASE (SUPRA), HELD: '26. THEREFORE, IN OUR VIEW, WHEN SEC.43B AS IT STO OD PRIOR TO THE AMENDMENT AND SEC.36(1)(VA) EXPLANATION 1 THERE TO R/W SEC.2(24)(X) ARE CONSIDERED TOGETHER, IT IS CLEAR T HAT THEY OPERATE IN DIFFERENT FIELDS. SO FAR AS THE EMPLOYEE'S CONTR IBUTION RECEIVED IS CONCERNED, IT SHOULD HAVE BEEN PAID ON OR BEFORE THE DUE DATE PRESCRIBED UNDER THE RELEVANT STATUTES. THEN AGAIN THE LEARNED COUNSEL CONTENDED THAT ON A READING OF SEC.43B(B), ANY SUM 'PAYABLE BY THE ASSESSEE AS AN EMPLOYER' BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND MEANT PAYMENT OF BOTH EMPLOYEES CONTRIBUTION AND EMPLOYER'S CONTRIBUTION, BY THE EMPLOYER AND THEREFORE THE ASSESSEE WAS ENTITLED TO PAY BOTH CONTRIBUTIONS TOGETHER ON OR BEFORE THE FILING OF T HE RETURN UNDER SEC.139(1) OF THE ACT. WE ARE UNABLE TO ACCEPT THE SAID CONTENTION ADVANCED BY THE LEARNED COUNSEL. IF SUCH A CONTENTION IS ACCEPTED, THAT WOULD MAKE SEC.36 (1)( VA) AND THE EXPLANATION THERETO OTIOSE. ACCORDING TO US, THERE WAS NO INDICATION IN SEC.43B AS IT STOOD PRIOR TO THE AMEN DMENT AND THEREAFTER ALSO TO DEFACE SEC.36(1)(VA) AND THE EXP LANATION THERETO FROM THE INCOME TAX ACT . THUS, IT MEANS THAT BOTH PROVISIONS ARE OPERATIVE AND THE CONTRIBUTIONS HAVE TO BE PAID IN ACCORDANCE WITH THE MANDATE CONTAINED UNDER SEC.36( 1) (VA) AND EXPLANATION THERETO AND UNDER SEC.43B, RESPECTI VELY.' 29. IN GEORGE WILLIAMSON (ASSAM) LTD.'S CASE (SUPRA ), WHILE CONSIDERING THE QUESTION OF LAW RAISED REGARDING IN TERPRETATION OF CLAUSE (B) OF SECTION 43B OF THE ACT, READ WITH SECOND PROVISO TO SAID SECTION AND CLAUSE (VA) OF SUB-SECTION (1) OF SECTION 36 OF THE ACT, THE GAUHATI HIGH COURT WHILE RELYING UPON ITS EARLIER DECISIONS IN THE MATTER OF ' CIT VS. BHARAT BAMBOO AND TIMBER SUPPLIERS ' (1996) 219 ITR 212 AND 'CIT (19 OF 20 ) [ITA- 55/2009 & ONE CONNECTED MATTER] VS. ASSAM TRIBUNE', (2002) 253 ITR 93, HELD THAT CONTRIBUTIONS TOWARDS PROVIDENT FUND ETC. PAID BEFORE THE FILING OF THE RETURN BY T HE ASSESSEE ARE ENTITLED FOR DEDUCTION. 30. THE HON'BLE SUPREME COURT IN VINAY CEMENT'S CAS E (SUPRA), WHILE REJECTING THE SPECIAL LEAVE PETITION PREFERRE D AGAINST THE B AJRANG AGRO INDUSTRIES PVT. LTD. 5 JUDGMENT OF GAUHATI HIGH COURT IN GEORGE WILLIAMSON (ASSAM) LTD. AND OTHER CONNECTED APPEALS, OBSERVED: 'IN THE PRESENT CASE WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B . IN THESE CIRCUMSTANCES THE ASSESSEE WAS ENTITLED TO CLAIM BENEFIT IN SECTION 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT H E HAS CONTRIBUTED TO THE PROVIDENT FUND BEFORE FILING THE RETURN.' 31. THE DECISION OF THE HON'BLE SUPREME COURT IN VI NAY CEMENT'S CASE (SUPRA), UPHOLDING THE DECISION OF GA UHATI HIGH COURT IN GEORGE WILLIAMSON (ASSAM) LTD.'S CASE (SUP RA), AS CONCLUDED BY THE MADRAS HIGH COURT IN NEXUS COMPUTE R PRIVATE LIMITED'S CASE (SUPRA) AND THE DELHI HIGH COURT IN AIMIL LTD.'S CASE (SUPRA) AND 'THE COMMISSIONER OF INCOME TAX-V VS. P.M. ELECTRONICS LTD.', (ITA NO .475/07, DECIDED ON 3.11.08), IS BINDING PRECEDENT UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA, WHICH IS REQUIRED TO BE FOLLOWED BY THIS COURT. 32. IN VIEW OF THE DISCUSSION ABOVE, THE SUBSTANTIA L QUESTION OF LAW FRAMED AS AFORESAID IS ANSWERED IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE. 6. RESPECTFULLY FOLLOWING THE SAME WE HEREBY DIRECT THE AO TO DELETE THE ADDITION. GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED AND GROUND NO.2 IS GENERAL IN NATURE DOES NOT REQUIRE S EPARATE ADJUDICATION. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. NOW WE TAKE UP REVENUES APPEAL IN ITA.NO.1538/IND/ 2016 8. WHILE DICTATING THE ORDER IT WAS NOTICED THAT TH ERE WAS A FIGURE OF RS. 3,41,55,992/- IN GROUND NO.2. THE APPEAL WAS RE -FIXED FOR CLARIFICATION AND THE LD. DR WAS CONFRONTED WITH TH AT FIGURE, LD. DR CONTENDED THAT IT HAS BEEN WRONGLY MENTIONED AND IT IS INADVERTENT CLERICAL MISTAKE, HE THEREFORE FILED MODIFIED GROUN DS. THE MODIFIED GROUNDS ARE AS UNDER: B AJRANG AGRO INDUSTRIES PVT. LTD. 6 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE LD. CIT(A)-I, INDORE HAS ERRED IN LAW IN DELETING THE A DDITION OF RS.47,66,567/- MADE BY THE AO ON ACCOUNT OF ALLEGED DIFFERENCE IN JOB WORK RECEIPTS AS SHOWN IN THE BOO KS OF ACCOUNT OF THE APPELLANT COMPANY. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A)-I, INDORE HAS ERRED IN DELETING THE ADDITION OF RS.47,66,567/- MADE BY THE AO ON ACCOUNT OF THE APP ELLANT COMPANY WHEREAS NO LEDGER, BILLS/VOUCHERS WAS PRODU CED BY ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AFTER GI VING PROPER OPPORTUNITY AND THE CONCLUSION OF LD. CIT(A) IS BAS ED ON THE TEST CHECK OF MATERIAL PRODUCED BEFORE HIM. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A)-I, INDORE HAS IGNORED THE FACT THAT ADDITION WAS MADE AFTER HAVING GIVEN PROPER OPPORTUNITY TO ASSESSEE. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A)-I, INDORE HAS IGNORED THE FACT THAT DURING C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED INCO RRECT SUBMISSION. 9. GROUND NOS. 1 & 4 ARE INTERCONNECTED, IN FACT TH E ONLY EFFECTIVE GROUND IS AGAINST THE DELETION OF ADDITION OF RS.47 ,66,567/-. 10. BRIEFLY STATED FACTS GIVING RISE TO THESE GROUN DS ARE THAT THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT U/S 263 R.W.S. 143 OF THE INCOME TAX ACT MADE ADDITION OF RS.47,66,567/- ON ACCOUNT OF DIFFERENCE IN THE TDS CERTIFICATE AND THE RECEIPTS DECLARED BY THE ASSESSEE. 11. AGGRIEVED BY THIS THE ASSESSEE PREFERRED AN APP EAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE ADDITION EVIDE NCES ALLOWED THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITION. NOW THE REVENUE IS IN APPEAL. THE LD. DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIF IED IN DELETING B AJRANG AGRO INDUSTRIES PVT. LTD. 7 THE ADDITION. HE SUBMITTED THAT THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS BROADLY RECONCILED. ON THE CONTRARY LD . COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER. LD. CIT(A) AND DR EW OUR ATTENTION TO PAGE NO.9 OF THE IMPUGNED ORDER, HE SUBMITTED TH AT DIFFERENCES WERE RECONCILED. 12. WE HAVE HERD RIVAL CONTENTIONS AND PERUSED MATE RIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THE LD. CIT(A) IN PARA 7.2 OBSERVED AS UNDER: ON PERUSAL OF THE MATERIAL PLACED ON RECORD IT IS SEEN THAT THE APPELLANT HAS RECONCILED THE DIFFERENCE AND HAS FIL ED ALL SUPPORTING DOCUMENTS TO ESTABLISH ITS CLAIM. THE BR OAD RECONCILIATION SUBMITTED BY THE APPELLANT HAS ALREA DY BEEN REPRODUCED AT PARA NO.3 ABOVE AS ANNEXURE-A. THE VA RIOUS DOCUMENTS FILED BY THE APPELLANT HAVE BEEN DULY TES T CHECKED AND THE RECONCILIATION SUBMITTED BY THE APPELLANT I S FOUND TO BE DULY SUPPORTED BY THE ABOVE DOCUMENTS. THUS, AFTER CONSIDERING THE ABOVE RECONCILIATION THERE REMAINS NO DISCREPAN CY IN THE RECEIPTS THE ADDITION OF RS.47,66,567/- IS THEREFOR E DIRECTED TO BE DELETED. THIS GROUND OF THE APPELLANT IS THEREFO RE ALLOWED. LD. CIT(A) HAS MENTIONED ANNEXURE A. THE ANNEXURE A IS REPRODUCED BY THE LD. CIT(A) AT PAGE 9 OF HIS ORDER WHICH IS AS UNDER: S.NO. NAME OF THE PARTY AMOUNT OF TDS AS PER TDS CERTIFICATE TOTAL PAYMENTS AS PER TDS CERTIFICATE JOB WORK CHARGES (RECORDED IN THE BOOKS) FREIGHT REIMBURSEMENT EARLIER YEAR JOB WORK CHARGES 1 M/S. USHODAYA ENTERPRISES PVT. 13,523 6,56,553 B AJRANG AGRO INDUSTRIES PVT. LTD. 8 2 --DO-- 28,796 13,97,846 3 --DO-- 59,687 28,97,247 SUB- TOTAL(A) 1,02,006 49,51,646 28,88,390 20,63,256 - 4 M/S. NILONS ENTERPRISES PVT. LTD. 18,099 7,96,223 7,96,223 5 --DO-- 4,037 1,77,847 1,77,847 6 --DO-- 44,009 19,40,349 19,40,349 7 --DO-- 858 37,800 37,800 8 --DO-- 18,773 8,56,924 8,56,924 SUB- TOTAL(B) 85,776 38,09,143 38,09,143 9 M/S. HOLISTA TRANSWORLD LTD. 39,955 15,86,702 9,80,100 6,06,602 10 M/S. AACHHI MASALA FOODS P. L. 30,537 13,45,242 12,42,549 -- 1,02,693 11 M/S. BRITANNIA INDUSTRIES LTD. 28,127 12,39,131 -- 12,39,131 12 --DO-- 17,819 7,84,988 -- 7,84,988 -- TOTAL 3,00,220 1,37,16,852 89,20,182 46,93,977 1,02,693 FROM THIS ANNEXURE, IT IS CLEAR THAT THE ASSESSEE H AD RECONCILED THE ENTRIES, THEREFORE, WE DO NOT SEE ANY REASON TO INT ERFERE IN THE FINDING OF THE LD. CIT(A), SAME IS HEREBY AFFIRM, T HE GROUND RAISED BY THE REVENUE IS REJECTED. B AJRANG AGRO INDUSTRIES PVT. LTD. 9 13. AS A RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. 14 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED A ND APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31 . 01.2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 31 / 01/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE
