G J Multiclave (India) Private Limited, Hyderabad V. Income Tax Officer, Ward-2(2), Hyderabad

ITA 1852/Hyd/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0636 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-09-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 10-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Assessee Lawyers: PRATAP KARAN
• Keywords: Opportunity of being heard

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE S MT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S . RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1 85 2 /HYD/201 7 ASSESSMENT YEAR: 20 1 3 - 1 4 GJ MULTICLAVE (INDIA) PVT. LTD., HYDERABAD. PAN A ABCGO954H VS. INCOME - TAX OFFICER, WARD 2 ( 2 ), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRATAP KARAN REVENUE BY : SHRI KIRAN KATTA DATE OF HEARING : 04 - 0 9 - 201 8 DATE OF PRONOUNCEMENT : 1 2 - 0 9 - 201 8 O R D E R PER S . RIFAUR RAHMAN, A .M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF DATED 0 6 / 0 9 / 201 7 OF CIT(A) 2 , HYDERABAD, FOR AY 20 1 3 - 1 4 . 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF HANDLING AND TREATMENT AND DISPOSAL OF THE BIO - MEDICAL WASTE (HAZARDOUS WASTE), FILED ITS RETURN OF INCOME FOR THE AY 2013 - 14 THROUGH ELECTRONIC FILING ON 29/09/2013 , DECLARING TO TAL INCOME OF RS. 1,31,53,090/ - BEFORE CLAIMING DEDUCTION U/S 80IA OF THE INCOME - TAX ACT, 1961 AND NIL INCOME AFTER CLAIMING DEDUCTION U/S 80IA OF THE ACT UNDER NORMAL PROVISIONS AND MAT INCOME OF RS. 1,36,21,883/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY NOTICE U/S 143(2) OF THE ACT AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE, THE AR OF THE ASSESSEE FILED THE REQUIRED INFORMATION. 2 ITA NO. 1 85 2 /HYD/201 7 GJ MULTICLAVE (INDIA) PVT. LTD. 2.1 THE AO OBSERVED THAT T HE ASSESSEE COMPANY HAS SET UP COMMON TREATMEN T AND DISPOSAL FACILITY FOR HANDING BIO - MEDICAL/HAZARDOUS WASTES GENERATED FROM VARIOUS HEALTH CARE ESTABLISHMENTS. THE COMPANY IS HANDLING PROJECTS AT THREE LOCATION/ SITES VIZ., THENMELPAKKAM VILLAGE, CHENGALPATTU TALUK, K ANCHEEPURAM DISTRICT, TAMIL NADU , EDUPALLY VILLAGE, MAHABOOBNAGAR DISTRICT, ANDHRA PRADESH, AND MANTHURUTHY, KANJIKODE, PALLAKAD DISTRICT, KERALA. 2.2 DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE COMPANY SHOWN PROFITS FROM ANDHRA PRADESH AND TAMILNADU UNITS, WHEREAS SHOWN LOSSES F ROM KERALA UNIT. AO WAS OF THE VIEW THAT T HIS ACT OF THE COMPANY WAS SUSPICIOUS AS DURING THE A.Y. 2012 - 13 THE PROFITS EARNED FROM KERALA UNIT WERE DISALLOWED DUE TO NON - AVAILABILITY OF APPROVALS ISSUED BY THE POLLUTION CONTROL BOARD OF KERALA GOVERNMENT. KEEPING IN VIEW THE ASSESSEE COMPANY HAD VEILED ITS PROFITS AND SHOWN LOSSES FROM THE KERALA UNIT. TO VERIFY THE GENUINENESS OF THE ASSESSEE COMPANY CLAIMS, THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY IN PARTICULAR THE BOOKS OF ACCOUNTS OF THE KERALA UNI T WAS CALLED FOR AND EXAMINED. DURING THE EXAMINATION IT IS FOUND MOST OF THE EXPENDITURE CLAIMED AS CASH EXPENDITURE, WHICH IS SUSCEPTIBLE FOR VERIFICATION. THE AR WA S ASKED TO EXPLAIN WHY THESE PAYMENTS SHOULD NOT BE DISALLOWED. THE AR STATED THAT IN THES E UNIT OPERATIONS ESPECIALLY THE NATURE OF BUSINESS CASH PAYMENTS IN PETTY NATURE IS UNAVOIDABLE. AS THE COMPANY CONSISTENTLY DECLARED PROFITS BEFORE DISALLOWANCE WAS MADE DURING A.Y. 2012 - 13 . TO GIVE A FAIR TREATMENT AND MEET THE ENDS OF JUSTICE, THE KERA LA PROFITS FOR F.Y. 2012 - 13 ARE ESTIMATED ON THE LINES OF PROFIT DECLARED DURING F.Y. 2011 - 12 WHICH WA S 4.3% ON THE GROSS RECEIPTS. AT THIS RATE THE KERALA UNIT PROFITS ARE WORKED OUT TO RS. 37,16,236/ - . IN THE ABSENCE OF APPROVAL FROM THE POLLUTION CONTRO L BOARD OF KERALA GOVT. IN THE NAME OF THE ASSESSEE, THE AO DISALLOWED THE SAID AMOUNT. 3 ITA NO. 1 85 2 /HYD/201 7 GJ MULTICLAVE (INDIA) PVT. LTD. 2.3 THE AO ALSO DISALLOWED AN AMOUNT OF RS. 6,36,826/ - TOWARDS EPF AND ESI REMITTANCE OF EMPLOYEES CONTRIBUTION ON THE GROUND THAT THE SAME WERE REMITTED BEYOND DUE DATE. 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE AO U/S 80IA(4) FOLLOWING THE DECISION OF HIS PREDECESSOR IN THE CASE OF ASSESSEE FOR AY 2012 - 13 AND ALSO CONFIRMED THE DISALLOWANCE MADE U/S 36(1)(VA). 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. ASSESSEE HAS RAISED 7 GROUNDS OF APPEAL. GROUND NOS. 1 TO 4 ARE PERTAINING TO DISA LLOWANCE U/S 80IA AND GROUND NO. 5 & 6 ARE PERTAINING TO DISALLOWANCE U/S 36(1)(VA). IN GROUND NO. 7, THE ASSESSEE SUBMITTED THAT THE ISSUES UNDER DISPUTE ARE COVERED BY THE DECISION OF THE ITA T IN ASSESSEES OWN CASE FOR AY 2010 - 11 AND 2012 - 13 IN ITA NO. 4 48 & 1540/HYD/2016 ORDER DATED 21/06/2017. 7. BEFORE US, THE LD. AR OF THE ASSESSEE INVITED OUR ATTENTION TO THE PAPER BOOK WHEREIN VARIOUS DOCUMENTS, NAMELY, COPIES OF AGREEMENTS BETWEEN THE ASSESSEE AND THE INDIAN MEDICAL ASSOCIATION AND COPIES OF APPROVALS FROM KERALA STATE POLLUTION CONTROL BOARD AND OTHER DOCUMENTS IN SUPPORT OF ASSESSEES CLAIM. 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE SMC - B BENCH BENCH IN ASSESSEES OWN CASE FOR AY 2010 - 11 AND 2012 - 12 (SUPRA) WHEREIN THE SMC - B BENCH REMITTED THE MATTER BACK TO THE FILE OF THE AO BY OBSERVING AS UNDER: 4 ITA NO. 1 85 2 /HYD/201 7 GJ MULTICLAVE (INDIA) PVT. LTD. 10. I HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IN MY OPINION, IT IS APPROPRIATE TO REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE LD. AO TO EXAMINE THE ISSUE AFRESH AFTER CONSIDERING THE CONTRACT DOCUMENTS AS A WHOLE AND ALL OTHER EVIDENCE THAT MAY BE SUBMITTED BY THE ASSESSEE TO DEMONSTRATE THE FACTS THAT ACTUAL WORK WAS EXECUTED BY THE ASSESSEE AND IMAGE DID NOT CLAIM ANY DEDUCTION U/S 80IA OF THE ACT. I SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DECIDE THE ISSUE AFRESH AFTER CONSIDERIN G THE RATIO LAID DOWN IN THE LIST OF CASES AT PARA 6 HEREINABOVE. NEEDLESS TO MENTION THAT LD. AO SHALL AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. AS THE ISSUE UNDER CONSIDERATION IS MATER IALLY IDENTICAL TO THAT OF AY 2010 - 11 AND 2012 - 13 AND THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM, WHICH ARE GIVEN BELOW: SL.NO. PARTICULARS PAGE NOS. 1. COPY OF AGREEMENT BETWEEN THE INDIAN MEDICAL ASSOCIATION (IMA) AND APPELLANT ENTERED INTO ON 20/04/2003 8 - 14 2. COPY OF AGREEMENT BETWEEN IMA AND APPELLANT ENTERED INTO ON 01/11/2008 15 - 20 3 COPY OF AGREEMENT BETWEEN IMA AND APPELLANT ENTERED INTO ON 01/11/2012 21 - 25 4 COPY OF CONSENT TO OPERATE/AUTHORIZATION ISSUED BY KERALA STATE POLLUTION CONTROL BOARD (KSPCB) TO IMAGE (CONSENT NO. PCB/HO/PLKD/ICO/29/2009) 26 - 33 5 COPY OF CONSENT TO OPERATE RENEWAL ISSUED BY KSPCB TO IMAGE (CONSENT NO. PCB/HO/PLKD/ICO - R/02/2013) 34 - 37 6 COPY OF INTEGRATED CONSENT TO OPERATE RENEWAL ISSUED BY KSPCB TO IMAGE (CONSENT NO. PCB/HO/PLKD/ICO - R/10/2016) 38 - 43 7 LIST OF VEHICLES USED FOR BIO MEDICAL WASTE COLLECTION AS PER THE CONSENT TO OPERATE/AUTHORIZATION ISSUED BY KSPCB AND THE C OPIES OF CERTIFICATES OF REGISTRATION OF SUCH VEHICLES 44 - 50 8 LIST OF VEHICLES USED FOR BIO MEDICAL WASTE COLLECTION AS PER THE INTEGRATED CONSENT TO OPERATE RENEWAL ISSUED BY KSPCB AND THE COPIES OF CERTIFICATES OF REGISTRATION OF SUCH VEHICLES 51 - 64 9 COPY OF PAN CARD OF IMAGE 65 5 ITA NO. 1 85 2 /HYD/201 7 GJ MULTICLAVE (INDIA) PVT. LTD. 10 EXTRACT ABOUT IMAGE & LIST OF ITS OFFICE BEARERS FROM WEBSITE WWW.IMAGEIMA.ORG 66 - 69 11 PAPER PRESENTATION ON BIO MEDICAL WASTE MANAGEMENT IN KERALA PUBLISHED IN CLEAN INDI A JOURNAL EXTRACTED FROM WEBSITE WWW.CLEANINDIAJOURNAL.COM 70 - 73 CONSIDERING THE ABOVE DOCUMENTS, WE SET ASIDE THE ORDER OF CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH CONSIDERING THE DOCUMENTS FILED BY THE ASSESSEE AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. THUS, THE ISSUED RAISED IN GROUND NOS. 1 - 4 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 10. AS REGARDS GROUND NOS. 5 & 6 RELATING TO DISALLOWANCE U/S 36( 1)(VA), I T IS A SETTLED POSITION OF LAW THAT IF THE CONTRIBUTIONS TOWARDS PF & ESI ARE PAID BEYOND THE DUE DATE BUT BEFORE FILING OF THE RETURN OF INCOME U/S 139(1) OF THE ACT, NO DISALLOWANCE CAN BE MADE. THEREFORE, WE REMIT THIS ISSUE ALSO TO THE FILE OF THE AO TO VERIFY WHETHER THE AMOUNTS PAID BEFORE FILING OF THE RETURN OF INCOME, IF SO, DISALLOWANCE MAY BE DELETED. GROUND NOS. 5 & 6 ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER , 2018. SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 12 TH SEPTEMBER , 2 018. KV 6 ITA NO. 1 85 2 /HYD/201 7 GJ MULTICLAVE (INDIA) PVT. LTD. COPY TO: - 1) GJ MULTICLAVE (INDIA) PVT. LTD., NO. 7 - 1 - 47/1A, DHARAM KARAM ROAD, AMEERPET, HYDERABAD 500 016 2) IT O , WARD 2 ( 2 ), HYD. 3) CIT(A) 2 , HYDERABAD. 4) PR. CIT 2 , HYD . 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE