ACIT, Coimbatore V. M/s. Tamil Nadu State Transport Corporation (Coimbatore) Limited, Coimbatore

ITA 2117/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64343 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: K RAGHU
• Keywords: Business expenditure; Commercial expediency
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 2117/MDS/2011 (ASSESSMENT YEAR : 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(2), COIMBATORE. (APPELLANT) V. M/S TAMIL NADU STATE TRANSPORT CORPORATION (COIMBATORE) LTD., 37, METTUPALAYAM ROAD, COIMBATORE 641 043. PAN : AAACC9092M (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI K. RAGHU, CA DATE OF HEARING : 25.09.2012 DATE OF PRONOUNCEMENT : 25.09.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT CIT(APPEALS) DELETED DISALLOWANCE OF PENSION FUND C ONTRIBUTION MADE BY THE ASSESSEE. AS PER THE REVENUE, SUCH PENSION FUND WAS NOT AN APPROVED ONE AND SINCE IT WAS NOT AN APPROVED ONE, DEDUCTION UNDER SECTION 36(1)(IV) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') COULD NOT BE ALLOWED. 2 I.T.A. NO. 2117/MDS/11 2. WHEN THE MATTER CAME UP BEFORE US, LEARNED A.R. SUBMITTED THAT SIMILAR ISSUE HAD COME UP BEFORE TRIBUNAL IN REVENU ES APPEAL FOR ASSESSMENT YEAR 2007-08. AS PER LEARNED A.R., THIS TRIBUNAL HAD CONFIRMED THE ORDER OF CIT(APPEALS) AND DISMISSED T HE APPEAL OF THE REVENUE. A COPY OF THE ORDER OF THIS TRIBUNAL IN I .T.A. NO. 430/MDS/2011 DATED 14 TH OCTOBER, 2011 WAS PLACED ON RECORD. LEARNED D.R. FAIRLY AGREED THAT THE MATTER STOOD DECIDED AG AINST REVENUE. 3. WE HAVE THE RIVAL SUBMISSIONS AND PERUSED THE O RDER OF THIS TRIBUNAL. IT IS FOUND THAT SIMILAR ISSUE REGARDING DISALLOWANCE MADE ON PENSION FUND CONTRIBUTION HAD COME UP BEFORE THIS T RIBUNAL IN THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2007-08 M ENTIONED SUPRA. IN PARAS 6 TO 8 OF THE SAID ORDER, IT WAS HELD BY T HIS TRIBUNAL AS FOLLOWS:- 6. THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW PENSION FUND CONTRIB UTION AS BUSINESS EXPENDITURE U/S 37 OF THE ACT AND THAT THE LD . CIT(A) SHOULD HAVE APPRECIATED THAT THE PENSION FUND IS NO T AN APPROVED FUND. THE LD. CIT(A) OUGHT HAVE APPRECIATED THAT I N THE CASE OF M/S KATTABOMMAN TPT CORPORATION LTD. [2005] 142 TAXMANN 3 75 [MAD] THE HONBLE JURISDICTIONAL HIGH COURT HAS HEL D THAT CONTRIBUTION TO ANY FUND NOT APPROVED THE LD. CIT(A ) IS NOT AN ALLOWABLE DEDUCTION U/S 37 OF THE ACT. THE LD. CIT(A ) OUGHT TO HAVE APPRECIATED THAT THE ISSUE IN THE ASSESSEES C ASE FALLS WITHIN THE PURVIEW OF SECTION 36(1)(IV) OF THE ACT AS MENTIO NED BY THE LD. CIT(A). 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON REC ORD. IN THE INSTANT CASE, THE LD. CIT(A) FOUND THAT THE ASSESSI NG OFFICER HAS 3 I.T.A. NO. 2117/MDS/11 DISALLOWED ` 21,68,94,716/- ON THE GROUND THAT THE ASSESSEE HAS MADE THE SAID PAYMENT TO AN UNRECOGNIZED PROVIDENT FUND. HOWEVER, ACCORDING TO THE LD. CIT(A), OUT OF THE SA ID ` 21,68,94,716/-, ` 12,02,95,996/- WAS PAYMENT MADE DIRECTLY TO THE EMPLOYEES AS PENSION DURING THE YEAR. AS THE S AID PAYMENT WAS NOT MADE TO ANY UNRECOGNIZED PROVIDENT FUND AND THE SAID PAYMENT WAS MADE OUT OF COMMERCIAL EXPEDIENCY, HE DE LETED THE DISALLOWANCE OF ` 12,08,95,996/-. 8. BEFORE US, THE LD. D.R. SUBMITTED THAT THE PAYMENT S WERE MADE TO UNRECOGNIZED PROVIDENT FUND AND THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE. WHEN IT WA S POINTED OUT FROM THE BENCH THAT THE FINDING OF THE LD. CIT(A) IS THAT THE AFORESAID PAYMENT OF ` 12,08,95,996/- IS NOT TO ANY UNRECOGNIZED PROVIDENT FUND BUT WAS MADE DIRECTLY TO EMPLOYEES A S PENSION DURING THE YEAR UNDER CONSIDERATION, THE LD. D.R. C OULD NOT BRING ANY MATERIAL BEFORE US TO CONTROVERT THE FINDING OF THE LD. CIT(A). IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED. THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. RESPECTFULLY FOLLOWING THE ORDER OF CO-ORDINATE BEN CH OF THIS TRIBUNAL, WE DISMISS THE APPEAL FILED BY THE REVENUE. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 25 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 25 TH SEPTEMBER, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-I, COIMBATORE / CIT-I, COIMBATORE/D.R./GUARD FILE