DCIT, Circle-2(2), Hyderabad, Hyderabad V. Tetrasoft India Private Limited, Hyderabad, Hyderabad

ITA 1662/HYD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2545 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-02-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Tax effect
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B BENCH: HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA. NO1662/HYD/2016 ASSESSMENT YEAR: 2011 - 2012 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(2), HYDERABAD. VS. M/S. TETRASOFT INDIA PVT LTD., ROAD NO.3, JOURNALIST COLONY, BANJARA HILLS, HYDERABAD 034. PAN: AACT 4313 N (APPELLANT) (RESPONDENT) FOR ASSESSEE: NONE FOR REVENUE : SMT. N. SWAPNA, DR DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 01.02.2018 ORDER PER D. MANMOHAN , VP. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 2, HYDERABAD AND IT PERTAINS TO A.Y. 2011 - 2012. FOLLOWING GROUNDS WERE URGED BEFORE THE TRIBUNAL: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) IS CORRECT IN LAW IN HOLDING THAT THE PAYMENT OF THE EMPLOYEES CONTRIBUTION TOWARDS EPF & ESI BY THE EMPLOYER ASSESSEE, WHICH IS NOT IN CONSONANCE WITH THE EXPLANATION TO SECTION 36(1)(VA) IS ENTITLED FOR DEDUCTION U/S 43B OF THE IT ACT? 2. WHETHER LD. CIT(A) IS CORRECT IN LAW IN ALLOWING EMPLOYEES CONTRIBUTION CONTRARY TO CIRCULAR NO. 22/2015 OF CBDT? 2. THE QUANTUM OF ADDITION INVOLVED IN THIS APPEAL IS ONLY RS. 1,38,105/ - , AS STATED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. SINCE TAX EFFECT IS LESS THAN THE SPECIFIED LIMIT PRESCRIBED BY THE CBDT, 2 THE REVENUE OUGHT TO HAVE WITHDRAWN ITS APPEAL. EVEN OTHERWISE, THE ITAT HYDERABAD BENCH ES HAVE CONSISTENTLY FOLLOWED THE DECISION OF TH E APEX COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD (2009) 319 ITR 306 TO HOLD THAT WHETHER IT IS EMPLOYEE S CONTRIBUTION OR EMPLOYERS CONTRIBUTION, SO LONG AS IT IS REMITTED BEFORE THE DUE DATE OF FILING OF RETURN, PRESCRIBED U/S 139(1) OF THE ACT, IT SHOULD NOT BE DISALLOWED U/S 43B OF THE ACT. IT IS NOT IN DISPUTE THAT THE EMPLOYEES CONTRIBUTION TO P ROVIDENT F UND WAS PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. 3. LD. CIT(A) FOLLOWED THE DECISIONS OF THE ITAT HYDERABAD BENCHES UNDER SIMILAR CIRCUMSTANCES , TO HOLD THAT DISALLOWANCE MADE BY THE A.O IS NOT IN ACCORDANCE WITH LAW. UNDER THESE CIRCUM STANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND THEREFORE, THE APPEAL OF THE REVENUE I S D I S M I S S E D BOTH ON MERITS AS WELL AS ON THE PRELIMINARY ISSUE AS TO THE MAINTAINABILITY OF THE APPEAL , SINCE IT IS CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT H AVING REGARD TO THE TAX EFFECT. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 1 ST FEBRUARY, 2018. S D / - S D / - ( D.S. SUNDER SINGH ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED: 1 ST FEBRUARY , 2018. OKK, SR.PS COPY TO 1. M/S. TETRASOFT INDIA PVT LTD., ROAD NO.3, JOURNALIST COLONY, BANJARA HILLS, HYDERABAD - 034. 2. DCIT, CIRCLE - 2(2), R.NO. 513, 5 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3. CIT (A) - 2, HYDERABAD. 4. PR. COMMISSIONER OF INCOME TAX - 2, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE