DCIT, Circle-1(1), Kolkata, Kolkata V. M/S. Budge Budge Company Ltd., Kolkata

ITA 2140/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1744 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 1999-2000
• Appeal Filed On: 25-11-2014
• Court: TRIBUNAL
• Department Lawyers: KAILASH DALUKA
• Assessee Lawyers: R CHOWDHURY
• Section: 43B

Judgement Text

ITA NO.2140/KOL/2014-M/S. BUDGE BUDGE COMPANY LTD. A.Y.1999-2000 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I. T.A NO. 2140/KOL/2014 ASSES SMENT YEAR : 1999-2000 D.C.I.T., CIRCLE-1(1), -VS.- M/S. BUDGE BUDGE COMPANY LTD. KOLKATA KOLKATA [PAN : AABCB 2410 K] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SH RI KAILASH DALUKA, FCA FOR THE RESPONDENT : SHRI R.CHOWDHURY, JCIT. SR.DR DATE OF HEARING : 08.05.2017 DATE OF PRONOUNCEMENT : 12.05.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 10.07.2014 OF CIT(A)-I, KOLKATA, RELATING TO AY 1999-2000. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE READ A S FOLLOWS: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING DISALLOWANCE OF RS. 92,87,864/- FOR DELAYE D EMPLOYEES' CONTRIBUTION TO PF AND RS. 16,79,149/- FOR DELAYED EMPLOYEES' CONTR IBUTION TO ESI U/S 36(1)(VA). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE- DISALLOWANCE OF RS. 92,87,864/- AND R S. 16,79,149/- RESPECTIVELY ON DELAYED EMPLOYEES' CONTRIBUTION TO PF AND ESI, WITH OUT CONSIDERING THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CI T VS. GUJARAT STATE ROAD DEVELOPMENT CORPORATION LTD. APPEAL NO. 637 OF 2013 , IN WHICH IT HAS BEEN HELD THAT SECTION 43B OF THE INCOME TAX ACT 1961 IS NOT APPLICABLE TO EMPLOYEES' CONTRIBUTION TO PF, AFTER DISCUSSING DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS REPORTED IN 319 ITR 306(SC) . 3. THE APPELLANT CRAVES LEAVE TO AMEND, MODIFY OR ALTER ANY GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THIS CASE. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINE SS OF TRADING AND MANUFACTURE OF JUTE. THE ASSESSEE AS AN EMPLOYER WITHHELD THE PRO VIDENT FUND CONTRIBUTION PAYABLE BY ITS EMPLOYEES FROM THEIR SALARIES PAYABLE, AS TH EIR SHARE OF CONTRIBUTION TO PROVIDENT FUND (PF) AND EMPLOYEES STATE INSURANCE ( ESI). AS PER SECTION 36(1)(VA) OF THE ACT, THE SUM SO WITHHELD AS EMPLOYEES CONTRI BUTION TO PF & ESI, IF IT IS NOT PAID ON OR BEFORE THE DUE DATE AS PROVIDED UNDER TH E RELEVANT LAW GOVERNING THE ITA NO.2140/KOL/2014-M/S. BUDGE BUDGE COMPANY LTD. A.Y.1999-2000 2 PROVIDENT FUND, WILL NOT BE ALLOWED AS DEDUCTION. I T IS THE PLEA OF THE ASSESSEE THAT THE EMPLOYEES CONTRIBUTION TO PF & ESI HAD BEEN PAID B Y THE ASSESSEE ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME FOR THE REL EVANT ASSESSMENT YEAR U/S 139(1) OF THE ACT AND THEREFORE DEDUCTION CLAIMED SHOULD BE A LLOWED AS PROVIDED UNDER THE PROVISO TO SECTION 43B OF THE ACT. THE SAID PLEA OF THE ASSESSEE WAS REJECTED BY THE AO FOR THE REASON THAT THE PROVISO TO SECTION 43B O F THE ACT CANNOT BE READ INTO THE PROVISION OF SECTION 36(1)(VA) OF THE ACT. ON APPE AL BY THE ASSESSEE, THE CIT(A) DELETED THE ADDITION MADE BY THE AO. 4. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HA S PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING IT WAS BROUGHT TO OUR NO TICE THAT THE HONBLE CALCUTTA HIGH COURT HAS ALSO TAKEN THE VIEW THAT EMPLOYEES CONTR IBUTION TO PF PAID ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT SHOULD BE ALLOWED AS DEDUCTION. IN THIS REGARD THE DECISION OF THE HONB LE CALCUTTA HIGH COURT IN THE CASE OF M/S. AKZO NOBEL INDIA LTD. VS CIT IN ITA 110 OF 2011 ORDER DATED 14.06.2016 AND IN THE CASE OF CIT VS VIJAYSHREE LTD., OF THE HONB LE CALCUTTA HIGH COURT IN GA NO.2607 OF 2011 ORDER DATED 06.09.2011 WERE BROUGHT TO OUR NOTICE. IN THE ORDER IN THE CASE OF VIJAYSHREE LTD., (SUPRA), THE HONBLE C ALCUTTA HIGH COURT HELD AS FOLLOWS : THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WH ETHER THE DELETION OF THE ADDITION BY THE ASSESSING OFFICER ON ACCOUNT OF EMP LOYEESCONTRIBUTION TO ESI AND PF BY INVOKING THE PROVISION OF SECTION 36(1)(V A) READ WITH SECTION 2(24)(X) OF THE ACT WAS CORRECT OR NOT. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMIS SIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., REPORTED IN 2009 VOL.390 ITR 3 06, HELD THAT THE DELETION WAS JUSTIFIED. BEING DISSATISFIED, THE REVENUE HAS COME UP WI TH THE PRESENT APPEAL. AFTER HEARING MR. SINHA, LEARNED ADVOCATE, APPEARIN G ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF T HE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LT D., WE FIND THAT THE SUPREME COURT IN THE AFORESAID CASE HAS HELD THAT T HE AMENDMENT TO THE SECOND PROVISO TO THE SEC. 43(B) OF THE INCOME TAX ACT, AS INTRODUCED BY FINANCE ACT, ITA NO.2140/KOL/2014-M/S. BUDGE BUDGE COMPANY LTD. A.Y.1999-2000 3 2003, WAS CURATIVE IN NAT.URE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1 ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF T HE AMOUNT PAID BY THE EMPLOYEES' CONTRIBUTION BEYOND DUE DATE WAS DEDUCTIBLE BY INVO KING THE AFORESAID AMENDED PROVISIONS OF SECTION 43(B) OF THE ACT. WE, THEREFORE, FIND THAT NO SUBSTANTIAL QU ESTION OF LAW IS INVOLVED IN THIS APPEAL AND CONSEQUENTLY, WE DISMISS THIS APPEAL. 6. IN VIEW OF THE AFORESAID DECISION OF THE HONBL E CALCUTTA HIGH COURT, WE ARE OF THE VIEW THAT THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE TRANSPORT CORPORATION LTD. (SUPRA) WILL NOT OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE AND THE DEDUCTION CLAIMED SHOULD BE ALLOWED AS THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND HAD ADMITTEDLY BEEN PAID ON O R BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S.139(1) OF THE ACT. THE LEARNE D DR ATTEMPTED TO ARGUE THAT THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IS NOT CORRECT AND THAT HONBLE GUJARAT HIGH COURT HAS TAKEN A DIFFERENT VIEW ON THE ISSUE. WE ARE OF THE VIEW THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDIN G ON US AND THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE CIT( A). 7. IN THE RESULT THE APPEAL BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 12.05.2017. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12.05.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1. M/S. BUDGE BUDGE COMPANY LTD., 16A, BRABOURNE RO AD, 9 TH FLOOR, KOLKATA-700001. 2. D.C.I.T., CIRCLE-1 (1), KOLKATA. 3. CIT(A)-I, KOLKATA. 4. C.I.T.-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGI STRAR, ITAT, KOLKATA BENCHES ITA NO.2140/KOL/2014-M/S. BUDGE BUDGE COMPANY LTD. A.Y.1999-2000 4