DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Kharikatia Tea & Industries Ltd., Kolkata

ITA 2063/KOL/2010

• Counselvise Citation: 206323514 RSA 2010
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 15-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: D K KOTHARI
• Keywords: Principle of natural justice
• Section: 43B

Judgement Text

, , , , B , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . , ,, , . . ! !! ! . , ] [BEFORE SHRI N. VIJAYA KUMARAN, J.M. & SHRI C. D . RAO, A.M.] $ $ $ $ / I.T.A NO.2063/KOL/2010 / // / ASSESSMENT YEAR : 2005-06 DY. COMMISSIONER OF INCOME TAX -VS.- M/S. KH ARIKATIA TEA & INDUSTRIES LIMITED CIRCLE-4, KOLKATA. KOLKATA [PAN : AAACK 9730 E] [ + + + + /APPELLANT ] ]] ] [ -.+ -.+ -.+ -.+/ // / RESPONDENT ] ]] ] + + + + / FOR THE APPELLANT : SHRI P. S. DUTTA -.+ -.+ -.+ -.+ / FOR THE RESPONDENT : SHRI D. K. KOTHARI 0 ! 0 ! 0 ! 0 ! /DATE OF HEARING : 25. 11. 2011 0 ! 0 ! 0 ! 0 ! /DATE OF PRONOUNCEMENT : 05.12.2011 [ /ORDER . . . . , PER N. VIJAYA KUMARAN, J. M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-XIX, KOLKATA DATED 05.08.2010 FOR ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS O F APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A), KOLKATA HAS ERRED IN DELETING THE ADDITION OF RS.29.85.666 - ON ACCOUNT OF CESS ON GREEN LEAVE WITHOUT CONSIDERING THE FACT THAT EXPENSES ON ACCOUNT OF CESS ON GREEN LEAF IS RELATED TO 100% AGRICULTURAL OPERATION AND SLP IS PENDING BEFORE THE HONBLE SUPREME COURT AGAINST THE DECISION OF CALCU TTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. -VS- CIT (270 ITR 167) IN THE LIGHT OF WHICH LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.7,50,000/- ON ACCOUN T OF INTEREST ON A LOAN GIVEN TO DELTA INTERNATIONAL LTD. WHICH WAS ADDED B Y THE A.O. ON THE BASIS [ ITA NO.2063/KOL/2010] 2 NOTES ON ACCOUNTS ATTACHED WITH THE AUDIT REPORT BA SING HIS DECISION ON SOME FINDINGS OF THE ARBITRATOR WITHOUT ALLOWING ANY OPP ORTUNITY TO THE A.O. OF FINDING THE DECISION OF THE ARBITRATOR WHICH WAS AD MITTED AS A NEW EVIDENCE IN VIOLATION OF RULE 46A. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN ALLOWING CONTRIBUTION TO EMPLOYEES PROVIDENT FU ND U/S.36(1)(VA) ON THE BASIS OF PAYMENTS MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN U/S.139(1) DISREGARDING THE FACT THAT IN THI S CASE THE DUE DATE MEANS THE DATE AS PER THE RELEVANT P.F. ACT AND NOT THE D UE DATE OF FILING OF RETURN. 3. THE FIRST GROUND IS ON THE DELETION OF AD DITION OF RS.29,85,666/- ON ACCOUNT OF CESS. THE LD . CIT(A) FOUND THAT THIS CANNOT BE DISALLOWED BEING C ESS ON GREEN LEAVES. THE ASSESSING OFFICER DISALLOWED THE SAME ON THE BASIS OF SLP PENDING BEF ORE THE HONBLE SUPREME COURT AGAINST THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LIMITED VS. CIT 270 ITR 167 (CAL.). ON APPEAL, LD. CIT(A) FOUND THAT IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. (SUPRA), H E DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS WE ARE OF THE VIEW THAT TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. (SUPRA) IS DIRECTLY APPLICABLE AS THE DELETION OF ADDITION BY FOLLOWIN G THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT B Y THE LD. CIT(A) IS QUITE JUSTIFIED AS THE FACTS AR E IDENTICAL. HENCE, WE HAVE NO HESITATION IN CONFIRMI NG THE ORDER OF THE LD. CIT(A) AND RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT WE REJECT THE GROUND RAISED BY THE REVENUE. 5. COMING TO THIRD GROUND, IT IS DISALLOWAN CE OF EMPLOYEES PROVIDENT FUND UNDER SECTION 36(1)(VA) OF THE ACT. THE ASSESSING OFFICER BROUGHT IT AS INCOME ON THE GROUND THAT SECTION 43B WILL ATTRACT AS IT WAS PAID BEYOND THE DUE DATES. H OWEVER, IT IS CONTENDED THAT THIS WAS PAID BEYOND THE DUE DATE FOR FILING THE RETURN AND THE LD. CIT( A) SATISFIED THAT NO DISALLOWANCE UNDER SECTION 43B CAN BE MADE WHEN THE PAYMENTS ARE MADE BEFORE T HE DUE DATE OF RETURN UNDER SECTION 139(1) OF THE ACT IN VIEW OF THE AMENDED PROVISIONS OF SECTIO N 43B. THE LD. CIT(A) RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM E XTRUSIONS LIMITED [2009] 319 ITR 306 (SC). RESPECTFULLY, FOLLOWING THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF ALOM EXTRUSIONS [ ITA NO.2063/KOL/2010] 3 LIMITED (SUPRA), WE AFTER DUE CONSIDERATION OF THE RIVAL SUBMISSIONS FOUND THAT THE ORDER OF THE LD. CIT(A) IS QUITE JUSTIFIED WITH RELEVANCE TO THE FAC TS AND CIRCUMSTANCES AND THE DECISION OF HONBLE SUPREME COURT RELIED BY THE LD. CIT(A) IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE. HENCE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT( A). IN THE RESULT, THIS GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. COMING TO SECOND GROUND, THIS IS REGARDIN G DELETION OF ADDITION OF RS.7,50,000/- UNDER THE HEAD INTEREST ON LOAN GIVEN TO DELTA INTERNATIONAL LIMITED. 7. AFTER CONSIDERING THE RIVAL SUBMISSION AN D PERUSING THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS, WE ARE OF THE VIEW THAT T HERE IS VIOLATION OF RULE 46A BY THE LD. CIT(A). COPY OF THE ARBITRATION AWARD WHICH WAS PRODUCED FO R THE FIRST TIME BEFORE THE LD. CIT(A), WHEN THAT BEING THE CASE, RULE 46A(3) IS MANDATORY. THE LD. CIT(A) OUGHT TO HAVE REMANDED THE EVIDENCE FOR COMMENTS OF THE ASSESSING OFFICER AS I T WAS DONE AS RIGHTLY TAKEN AS OBJECTION IN THE GROUND BY THE REVENUE THAT THERE IS DENIAL OF OPPOR TUNITY TO THE ASSESSING OFFICER. WHEN THE LD. CIT(A) ADMITTED THE NEW EVIDENCE I.E. ARBITRATION A WARD COPY WITHOUT REMANDING THE SAME FOR THE COMMENTS OF THE ASSESSING OFFICER AS IT IS DENIAL O F OPPORTUNITY. NATURAL JUSTICE DEMANDS THAT IT SHOULD BE GIVEN WITH OPPORTUNITY. HENCE, WE REVERSE THE FINDINGS OF THE LD. CIT(A) AND THIS GROUND NO.2 IN RESPECT OF ADDITION OF RS.7,50,000/- UNDER THE HEAD INTEREST ON LOAN GIVEN TO M/S. DELTA INTERNATIONAL LIMITED AND THE LD. CIT(A) IS HEREBY DIRECTED TO DECIDE THE ISSUE AFRESH AFTER OFFERING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. UNDER T HE FACTS AND CIRCUMSTANCES, THIS SECOND GROUND OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS T REATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 3 3 3 3 ! !! ! ORDER PRONOUNC ED IN THE COURT ON 05.12.2011 SD/- SD/- [ . . ! !! ! . , ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 5TH DECEMBER, 2011. [ ITA NO.2063/KOL/2010] 4 0 - 7/ COPY OF THE ORDER FORWARDED TO: 1 . + /APPELLANT : DY.COMMISSIONER OF INCOME TAX, CIRCLE -4, P-7, CHOWRINGHEE SQUARE, 8 TH FLOOR, KOLKATA-700 069. 2 . -.+ / RESPONDENT : M/S. KHARIKATIA TEA & INDUSTRIES LT D., SUIT NO.A1, 33A, J.L. NEHRU ROAD, KO LKATA-700 071. 3. - / CIT, 4. ()/ CIT(A), KOLKATA. 5. -/ DR, KOLKATA BENCHES, KOLKATA [. -/ TRUE COPY] / BY ORDER, /ASSTT REGISTRAR [KKC AB C /SR.PS]