JCIT(OSD), Circle - 4, Kolkata, Kolkata V. M/s. Malhati Tea & Industries Ltd., Kolkata

ITA 1719/KOL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7883 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 15-12-2011
• Court: TRIBUNAL
• Department Lawyers: D BANERJEE
• Assessee Lawyers: N O N E
• Section: 43B; 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( ) BEFORE , /AND , ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA , AM ] / I.T.A NO. 1719 /KOL/20 1 1 / ASSESSMENT YEAR : 200 7 - 0 8 JOINT COMMISSIONER OF INCOME - TAX (OSD), VS. M/S. MALHATI TEA & INDUSTRIES LTD. CIRCLE - 4, KOLKATA. (PAN:AACCM3198A) ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING: 1 0 . 12 .201 4 DATE OF PRONOUNCEMENT: 10 . 1 2 .201 4 FOR THE APPELLANT : SHRI D. BANERJEE, JCIT FOR THE RESPONDENT : N O N E / ORDER PER SHRI MAHAVIR SINGH, JM : T HE APPEAL FILED BY REVENUE IS AGAINST THE ORDER OF CIT (A) - IV , KOLKATA IN APPEAL NO. 277/CIT(A) - IV/2009 - 10 DATED 0 3 .0 8 .201 1 . ASSESSMENT W AS FRAMED BY D CIT, CIRCLE - 4, KOLKATA U/S. 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 7 - 0 8 VIDE HIS ORDER DATED 2 3 . 11 .20 09 . 2 . THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF INTEREST DEBITED IN P&L ACCOUNT WITHOUT PAYMENT U/S. 43B OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT ON THE FACTS AND CIRCUMSTANCE S O F THE CASE , LD . CIT(A) HAS ERRED IN LAW IN DIRECTING THE A . O. TO ALLOW RS. 14 , 57 , 000 1 - IN CASE OF ADDITION OF RS. 16 , 12 , 674 / - ON ACCOUNT OF INTEREST DEBITED IN P / L A / C . WITHOUT APPRECIATING THE FACT THAT SECTIONS 43B STIPULA T ES THAT DEDUCTION S U/S . 43B IS ALLOWED ONLY IN THAT PREVIOUS Y EAR I N WHICH THE SUM IS ACTUA L L Y PAID. 3. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. FIRST OF ALL, WE FIND THAT THE AO HAS DISALLOWED INTEREST DEBITED ON ACCOUNT OF BANK LOA N AT RS.16,12,674/ - IN P&L ACCOUNT FOR THE REASON THAT NO EVIDENCE WAS PRODUCED BEFORE HIM. THE RELEVANT FINDING OF THE AO READS AS UNDER: THE ASSESSEE HAS DEBITED INTEREST ON BANK LOAN FOR AN AMOUNT OF RS.1612674/ - IN THE P&L A/CS. ON EXAMINATION OF BANK LEDGER IT IS SEEN THAT THE BANK HAS CHARGED INTEREST OF RS.1614616/ - AND THE ASSESSEE HAS ACCOUNTED THE SAME IN THE BOOKS. THERE IS NO EVIDENCE IN THE BOOKS THAT INTEREST WAS PAID BY THE ASSESSEE. ACCORDINGLY, THE ENTIRE AMOUNT OF INTEREST CHARGED IN THE P&L OF RS.1612674/ - IS ADDED BACK U/S. 43B. 2 ITA NO. 1719 /K/201 1 M/S. MALHATI TEA & IND. LTD. AY 2007 - 0 8 AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO WITHOUT GOING INTO THE ACTUAL DATE OF PAYMENT AND ACTUAL FACT WHETHER THE PAYMENT IS MADE OR NOT, ALLOWED THE CLAIM OF ASSESSEE BY OBSERVING AS UND ER: 4. I HAVE GONE THROUGH THE DETAILS SUBMISSION AND FACTS NARRATED BY A.O. AND I AM SATISFIED THAT IN ANY CASE INTEREST TO THE EXTENT OF RS.14,57,000/ - PAID TO THE BANK DURING THE AFORESAID ASSESSMENT YEAR SHOULD BE ALLOWED AS DEDUCTION. THOUGH APPELL ANT HAS ARGUED THAT ENTIRE AMOUNT OF RS.16,12,674/ - SHOULD BE ALLOWED AS THIS IS CASH CREDIT ACCOUNT WITH CANARA BANK. BUT AS PER THE ENTRY RS.14,57,000/ - IS MADE AND HENCE I DIRECT THE A.O. TO ALLOW R S.14,57,000/ - AFTER VERIFYING THE BANK ENTRY, AS DEDUCTION ON ACCOUNT OF INTEREST TO THE BANK. 4. WE FIND THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE WHETHER THE INTEREST DEBITED IN THE P&L ACCOUNT AND PAID TO THE BANK IS ACTUALLY PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN U/S. 139(1) OF TH E ACT. IN THE ABSENCE OF ANY EVIDENCE, WE ARE OF THE VIEW THAT LET ONE MORE OPPORTUNITY BE GIVEN TO THE ASSESSEE TO PRODUCE THE SAME BEFORE AO. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) ON THIS ISSUE AND SET ASIDE THE MATTER BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. ACCORDINGLY, THIS ISSUE OF REVENUE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 5. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF BONUS IN VIEW OF THE PROVISIONS OF SECTION 43B OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2: 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD . CIT(A) HAS ERRED IN LAW I N DIRECTING THE A .O. TO ALLO W RS. 14 , 94 , 231/ - IN CASE OF DISALLOWANCE OF BONUS FOR RS. 15 , 50 , 766/ - SINCE IT APPEAR S TO BE P E R V ERSIT Y OF FACTS AS LD . CIT(A) BASED HIS DECISIONS ONL Y ON THE SUBMISSIONS OF THE ASSESSEE WITHOU T REL Y ING ON THE TA X AUDIT REPORT . 6 . WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO MADE DISALLOWANCE BY OBSERVING AS UNDER: IN THE BOOKS THE ASSESSEE HAS DEBITED BONUS OF R S.15,50,766/ - . BUT THERE IS NO EVIDENCE THAT PAYMENT OF BONUS WAS MADE IN ACCORDANCE WITH THE PROVISION OF SECTION 43B. THERE IS NO TAX AUDIT REPORT ALSO TO SHOW THE PAYMENT WAS MADE WITHIN THE TIME U/S. 43B. THEREFORE, THE SAME IS DISALLOWED AND ADDED BACK. AGGRIEVED, ASSESSEE PREF ERRED APPEAL BEFORE CIT(A), WHO DELETED THE DISALLOWANCE AFTER TAKING CHART THAT THE BONUS WAS PAID BUT NO DETAILS WERE FILED BY THE ASSESSEE ON WHICH DATE THIS WAS PAID OR PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN U/S. 139(1) OF THE ACT FOR RELEV ANT ASSESSMENT YEAR. AS THE FACTS ARE NOT CLEAR, WE REVERSE THE FINDINGS OF CIT(A) AND SET ASIDE THE ISSUE BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. ACCORDINGLY, THIS ISSUE OF REVENUE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 3 ITA NO. 1719 /K/201 1 M/S. MALHATI TEA & IND. LTD. AY 2007 - 0 8 7. THE NEXT ISS UE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN UPHOLDING THE PART DISALLOWANCE ON ACCOUNT OF DISALLOWANCE TO EMPLOYEES SHARE OF PF AND EMPLOYER S SHARE OF PF. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.3 : 3. THAT ON THE FACTS AND C IRCUMSTANCES OF THE CASE , LD . CIT(A ) HA S ERRED IN LAW IN UPHOLDING THE DISALLOWANCE TO THE EXTENT OF RS.4 , 31 , 529 / - AND RS.21 , 28 , 923 / - INSTEAD OF RS. 21 , 79 , 923 / - AND RS. 22 , 70 , 036/ - ON ACCOUNT OF DISALLOWA NC E TO EMPLOYEES ' SHARE OF P.F. AND EMPLO Y ERS ' S HARE OF P . F . RESPECTIVELY SINCE LD. C I T(A) DECIDED THIS I SSUE IN A MANNER W HER E HE DID NOT ASSI G N AN Y REASON BEHIND S UCH D ECISIONS . 8. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO MADE DISALLOWANCE BY OBSERVING AS UNDER: IT IS SEEN THAT EMPLOYERS CONTRIBUTION TO PF & ALLIED FUND FOR AN AMOUNT OF R S.2270036/ - (PF RS.21,79,923/ - & EDLI R S.90806/ - ) DEBITED IN THE P&L ACCOUNT BUT WAS NOT DEPOSITED BY THE ASSESSEE. THEREFORE, NO DEDUCTION U/S. 43B IS ALLO WED. I N ABSENCE OF DETAILS IT IS NOT ASCERTAINABLE AS TO WHAT AMOUNT OF EMPLOYEES CONTRIBUTION TO PF WAS DEPOSITED WITHIN THE RELEVANT DUE DATE OF PF RULES AND WHAT AMOUNT IS REMAINED UNPAID. SINCE CONTRIBUTION TO PF AND ALLIED FUND (PENSION FUND BEING COMPULSORY CONTRIBUTION UNDER PF ACT AND NOT CONTRIBUTION TO APPROVED PENSION FUND) UNDER PF ACT IS EQUAL, RS.2179923/ - IS ADDED BACK U/S. 2(24)(X). 9 . AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO UPHELD THE PART DISALLOWANCE AND HENCE, REVEN UE IS IN FURTHER APPEAL BEFORE US. WE FIND THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY WHETHER THE EMPLOYEES CONTRIBUTION AND EMPLOYER S CONTRIBUTION ARE ACTUALLY PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN U/S. 139(1) OF THE ACT. IN THE ABSENCE OF ANY EVIDENCE, WE ARE OF THE VIEW THAT LET ONE MORE OPPORTUNITY BE GIVEN TO THE ASSESSEE TO PRODUCE THE SAME BEFORE AO. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) ON THIS ISSUE AND SET ASIDE THE MATTER BACK TO TH E FILE OF AO FOR FRESH ADJUDICATION. ACCORDINGLY, THIS ISSUE OF REVENUE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 10 . IN THE RESULT, BOTH THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 1 1 . ORDER IS PRONOUNCED IN OPEN COURT . S D / - S D / - , , ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 TH DECEMBER , 201 4 JD.(SR.P.S.) 4 ITA NO. 1719 /K/201 1 M/S. MALHATI TEA & IND. LTD. AY 2007 - 0 8 - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT JCIT(OSD), CIRCLE - 4, KOLKATA. 2 / RESPONDENT M/S. MALHATI TEA & INDUSTRIES LTD., 2A, GANESH CHANDRA AVENUE, 5 TH FLOOR, ROOM NO. 7, KOLKATA - 700 001. . 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT , KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .