DCIT, CC-VI, Kolkata, Kolkata V. M/s. J.K. Lakshmi Cement Ltd., Kolkata

ITA 1680/KOL/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7928 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2012
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 08-12-2011
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY
• Assessee Lawyers: S JHAJHARIA
• Keywords: Rectification of order; Question of law
• Section: 43B; 143(3); 154

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND ! ' ! ! ' ! ! ' ! ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] #$ #$ #$ #$ % % % % / W.T.A NO. 35 KOL/2011 '&' () '&' () '&' () '&' ()/ // / ASSESSMENT YEAR : 200 6 -0 7 DEPUTY COMMISSIONER OF WEALTH TAX, VS. M/S. J. K . LAKSHMI CEMENT LTD. CC-VI, KOLKATA. (PAN:AAACJ 6715 G) (+, /APPELLANT ) (-+,/ RESPONDENT ) & % % % % / I.T.A NO. 1680/KOL/2011 '&' () '&' () '&' () '&' ()/ // / ASSESSMENT YEAR : 2002-03 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. J. K. LAKSHMI CEMENT LTD. C.C-VI, KOLKATA. (+, /APPELLANT ) (-+,/ RESPONDENT ) FOR THE APPELLANT: SHRI P. K. CHAKRABORTY FOR THE RESPONDENT: SHRI S. JHAJHARIA DATE OF HEARING: 02.08.2012 DATE OF PRONOUNCEMENT: 02.08.2012 . / ORDER PER MAHAVIR SINGH, JM ( ! ' ! ! ' ! ! ' ! ! ' !, , , , ) BOTH THESE APPEALS BY REVENUE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 64 & 101/CIT(A),C-1/CC-VI/10- 11 DATED 19.09.2011 RESPECTIVELY. ASSESSMENT FOR WTA WAS FRAMED BY ACWT, C.C-VI, KOLK ATA U/S. 16(3) OF THE WEALTH TAX ACT, 1957 (HEREINAFTER REFERRED TO AS THE W. T., A CT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 29.12.2008 AND ASSESSMENT FOR ITA WAS F RAMED BY DCIT, CC-VI, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) FOR AY 2002-03 VIDE HIS ORDER DATED 23.03.2005. 2. FIRST WE WILL TAKE UP WTA NO. 35/KOL/2011. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CWT(A) IN QUASHING THE RECTIFI CATION ORDER PASSED U/S. 35 OF THE WT ACT BY AO EVEN THOUGH THE ORIGINAL ASSESSMENT WAS FRAMED U /S. 16(3) OF THE W T ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NOS. 1 AND 2: 1. THAT, IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN HOLDING THAT NO MISTAKE APPARENT FROM THE RECORD OCCURRED IN THE OR DER PASSED U/S. 16(3) OF WEALTH TAX ACT, 1957 DATED 29.12.2008. 2 WTA 35/K/2011 & ITA 1680/K/2011 M/S. J. K. LAKSHMI CEMENT LTD. A.Y. 06-07 & 02-03 2. THAT, IN DOING SO LD. CIT(A) FAILED TO APPRECIA TE THAT THE ISSUE REGARDING VALUATION OF DEPRECIABLE ASSET IS NOT DEBATABLE INASMUCH AS THE VALUE OF THE MOTOR CAR IS TO BE DETERMINED AS PER WDV COMPUTED AS PER INCOME TAX AC T INSTEAD OF WDV SHOWN IN THE BALANCE SHEET. 3. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE FILED ITS W. T. RETURN ON 29.11.2006 DECLARING NET WEALTH AT RS.2,28,53,200/- . THE ASSESSMENT WAS COMPLETED U/S. 16(3) OF THE W. T. ACT ON 29.12.2008 AT A RETURNED NET WE ALTH. SUBSEQUENTLY, THE AO NOTICED THAT THE VALUE SHOWN OF ITS MOTOR CAR AS PER WDV IN THE BALA NCE SHEET AND VALUE SHOWN IN THE TAX AUDIT REPORT DIFFERS AND, THEREFORE, HE ISSUED NOTICE U/S . 35 OF THE W.T. ACT FOR RECTIFICATION OF MISTAKE. THE AO HAS NOT ACCEPTED THE EXPLANATION OF THE AASESSEE AND MADE THE DIFFERENTIAL AMOUNT OFRS.76,49,702/- AS EXCESS IN THE WDV AS APP EARED IN TAX AUDITL REPORT WHICH IS NOT AS PER I. T. ACT BUT AS PER W.T. ACT AS APPEARING IN B ALANCE SHEET. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE STATED THAT THE VIEW TAKEN BY AO PREVIOUSLY AND THE PRESENT VIEW TH ESE ARE TWO CONCEIVABLE DIFFERENT POSSIBLE VIEWS AND ON SUCH FACTS WHETHER THE PREVIOUS VIEW O F THE AO WAS A VIEW WHICH WAS NOT POSSIBLE BUT WAS A MISTAKE APPARENT FROM RECORD OR NOT. THE CIT(A) CONSIDERED THAT THE ISSUE IN DISPUTE IS WHETHER THE VALUE OF MOTOR CAR SHOULD BE TAKEN AS PER WDV DECLARED IN THE BALANCE SHEET OR THE WDV AS TAKEN IN TAX AUDIT REPO RT. ACCORDING TO HIM, THE QUESTION IS NOT FREE FROM MISCHIEF OF TWO POSSIBLE VIEWS AND CONSID ERING THIS FACT, HE NOTED THAT RECTIFICATION IN SUCH CIRCUMSTANCES IS NOT POSSIBLE. ACCORDINGLY , HE ALLOWED THE CLAIM OF ASSESSEE. WE FIND THAT THE CIT(A) HAS TAKEN A POSSIBLE VIEW AND IF T HESE TWO POSSIBLE VIEWS ARE THE OUTCOME OF THE ABOVE FACTS, THE RECTIFICATION IS NOT POSSIBLE. THE CIT(A) HAS RIGHTLY QUASH THE RECTIFICATION PROCEEDING, WE CONFIRM THE SAME. APPEAL OF REVENUE IS DISMISSED. 4. NOW, WE ARE COMING TO ITA NO.1680/K/2011. THE O NLY ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE DISA LLOWANCE ON ACCOUNT OF EMPLOYERS CONTRIBUTION TOWARDS PF & ESI. FOR THIS, REVENUE HA S RAISED FOLLOWING GROUND NOS. 1, 2 AND 3: 1. THAT, IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.27,45,450/- ON ACCOUNT OF EMPLOY ERS CONTRIBUTION TOWARDS PF & ESI WHICH WAS PAID AFTER THE EXPIRY OF THE DUE DATE S. 2. THAT, IN DOING SO LD. CIT(A) FAILED TO APPRECIAT E THAT A CLEAR MISTAKE OCCURRED IN THE AY 2002-03 INASMUCH AS THE DEDUCTION ON CONTRIBUTIO N TOWARDS PF&ESI WAS WRONGLY ALLOWED IN VIOLATION OF PROVISIONS OF SEC. 43B AS I T STOOD PRIOR TO AMENDMENT. 3. THAT, LD. CIT(A) ERRED IN OBSERVING THE ISSUE I S DEBATABLE IN THE BACKGROUND OF THE FACT THAT A CLEAR MISTAKE APPARENT FROM THE RECORD OCCURRED. 5. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT ASSESSING OFFICER DURING THE COURSE OF RECTIFICATION PROCEEDINGS OBSERVED THAT AN AMOUNT O F RS.27,45,850/- REGARDING CONTRIBUTION 3 WTA 35/K/2011 & ITA 1680/K/2011 M/S. J. K. LAKSHMI CEMENT LTD. A.Y. 06-07 & 02-03 TOWARDS PF, ESI, FAMILY PENSION ETC. WAS DISALLOWED IN AY 2001-02 AND THE SAID AMOUNT WAS ALLOWED IN AY 2002-03 U/S. 43B OF THE ACT. THE SAI D AMOUNT WAS PAYABLE IN FY 2000-01 WITHIN THE TIME ALLOWED UNDER THE RESECTIVE ACT. H OWEVER, THE SAID AMOUNT WAS PAID IN F.Y 2001-02. ACCORDING TO AO SECTION 43B ALLOWS PAYABL E BEFORE THE DUE DATE OF FILING OF RETURN. AS THE AMOUNT PAID IN FY 2001-02 BEFORE FILING OF R ETURN THE SAME WAS NOT ALLOWABLE IN AY 2002-03. THE SAID AMOUNT WAS ALLOWED IN AY 2002-03 WRONGLY BY MISTAKE APPARENT FROM RECORD. THE AO ISSUED NOTICE U/S. 154 OF THE ACT A CCORDINGLY. BEFORE THE AO, ASSESEE STATED THAT SECTION 43B PROVIDES THAT SUCH CONTRIBUTION AR E ALLOWABLE ON PAYMENT ONLY AND THE RELEVANT PROVISO FOR ALLOWING IN YEAR TO WHICH ARE ALLOWABIL ITY PERTAINS IF PAID. BEFORE DUE DATE OF RETURN IS NOT APPLICABLE TO SAID CLAUSE (B) FOR YE AR UNDER CONSIDERATION. THEREFORE, THE SAID AMOUNT OF RS.27,45,850/- WAS CORRECTLY OFFERED FOR DISALLOWANCE IN AY 2001-02. HENCE, THERE IS NO MISTAKE IN RECORD. ACCORDING TO AO, SECTION 43B ALLOWS PAYMENTS BEFORE DUE DATE OF FILING OF RETURN. THE ASSESSEE HAS MADE PAYMENT OF THE ABOVE STATED AMOUNT BEFORE THE DATE OF FILING OF ITS RETURN FOR AY 2001-02. HENCE,. THE S AME WAS ALLOWABLE IN AY 2001-02 NOT IN AY 2002-03. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFO RE CIT(A), WHO OBSERVED THAT CONSIDERING ABOVE THAT THERE WAS NO MISTAKE APPARENT FROM RECOR D FOR RECTIFICATION, THE GROUND NO. 2 TAKEN BY THE APPELLANT IS ALLOWED AND THE ORDER PASSED U/ S. 154 OF THE ACT IS CANCELLED. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE US. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. IT IS AN ADMITTED FACT, BY THE LOWER AUTHORITIES I. E. CIT(A) AS WELL AS AO DURING THE PROCEEDINGS OF 154 AS WELL AS 143(3) OF THE ACT, THAT THE PF CO NTRIBUTION PAYMENTS ON ACCOUNT OF EMPLOYERS CONTRIBUTION ARE DEPOSITED IN THE GOVT. ACCOUNT WIT HIN THE DUE DATE OF FILING OF RETURN U/S. 139(1) OF THE ACT. IN VIEW OF THIS FACT, WE ARE OF THE VIEW THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ASSESSMENT ORDER PASSED U/S. 143 (3) OF THE ACT, WHICH HAS BEEN RECTIFIED BY AO WHILE ACTING U/S. 154 OF THE ACT. THE VERY ACTI ON OF AO IN INVOKING SECTION 154 OF THE ACT IS WITHOUT THE SANCTION OF LAW, REASON BEING FIRST OF ALL THIS IS A HIGHLY DEBATABLE ISSUE AND DEBATABLE ISSUES ARE NOT COVERED UNDER THE JURISDIC TION OF SECTION 154 OF THE ACT. SECONDLY, NOW THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSE SSEE AND AGAINST REVENUE BY THE DECISION OF THIS JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V S. M/S. VIJAY SHREE LIMITED VIDE ITAT NO. 245 OF 2011 IN GA NO.2607 OF 2011 DATED 7 TH SEPTEMBER, 2011 HAS HELD AS UNDER: AFTER HEARING MR. SINHA, LEARNED ADVOCATE, APPEARI NG ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COU RT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., WE FIND THAT TH E SUPREME COURT IN THE AFORESAID CASE HAS HELD THAT THE AMENDMENT TO THE SECOND PROVISO T O THE SEC. 43(B) OF THE INCOME TAX 4 WTA 35/K/2011 & ITA 1680/K/2011 M/S. J. K. LAKSHMI CEMENT LTD. A.Y. 06-07 & 02-03 ACT, AS INTRODUCED BY FINANCE ACT, 2003, WAS CURATI VE IN NATURE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1 ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EMPLOYEES CONTRIBUTION BEYOND DUE DATE WAS DEDUCTIBLE BY INVOKING THE AFOR ESAID AMENDED PROVISIONS OF SECTION 43(B) OF THE ACT. WE, THEREFORE, FIND THAT NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL AND CONSEQUENTLY, WE DISMISS THIS APPEAL. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT NOW THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY HONBLE JURISDICTIONAL HIGH COURT, H ENCE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND THE SAME IS HEREBY UPHELD. APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEALS OF REVENUE ARE DISMISSED. . 8. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- , ! ! ! ! ' ! ' ! ' ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( / / / /) )) ) DATED: 2ND AUGUST, 2012 01 '&23 '4 JD.(SR.P.S.) . 5 ''# 6#(7- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT DCWT/DCIT, CC-VI, KOLKATA. . . 2 -+, / RESPONDENT M/S. J. K. LAKSHMI CEMENT LTD., 7, CO UNCIL HOUSE ST., KOLKATA-700 001... 3 . '.& ( )/ THE CIT(A)- , KOLKATA. 4. '.& / CIT, KOLKATA. 5 . >'? '& / DR, KOLKATA BENCHES, KOLKATA -# '/ TRUE COPY, .&/ BY ORDER, ! 3 /ASSTT. REGISTRAR .