Sakar Glazed Tiles Pvt.Ltd., Ahmedabad V. The Dy.CIT, Circle-8, Ahmedabad

ITA 219/AHD/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5594 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-07-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 27-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 271(1)(c); 43B; 40A(3); 143(3); 142(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 219/AHD/2015 & 2133/AHD/2017 (ASSESSMENT YEAR: 2011-12) SAKAR GLAZED TILES PVT. LTD., 401, SHEFALI CENTRE, PALDI CHAR RASTA, AHMEDABAD-380006 V/S DCIT, CIRCLE-8, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AADCS3760K APPELLANT BY : SHRI SAKAR SHARMA, AR RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 24 -07-201 9 DATE OF PRONOUNCEMENT : 11 -09-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE TWO APPEALS FILED BY THE ASSESSEE ONE FOR QUA NTUM PROCEEDING AND ANOTHER IS FOR PENALTY PROCEEDING ARE DIRECTED AGAI NST THE ORDER OF THE LD. CIT(A)-8, AHMEDABAD DATED 03.12.2014 PERTAINING TO A.Y. 2011-12. ITA NO. 219/ A/15 & 2133/AHD/2017 . A.Y. 2011-12 2 2. NOW WE COME TO ITA NO. 219/AHD/2015. ASSESSEE HAS T AKEN FOLLOWING GROUNDS OF APPEAL: 1.THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONF IRMING DISALLOWANCE OF DEPRECIATION OF RS. 1,62,562/- BY HOLDING THAT CAPI TAL SUBSIDY OF RS. 15,00,000/- WAS LIABLE TO BE DEDUCTED FROM COST OF PLANT 85 MAC HINERY EVEN THOUGH IN EARLIER ASSESSMENT YEAR IDENTICAL ADDITION WAS DELETED BY L D. CIT (A). 2. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING DISALLOWANCE OF TRANSPORT PAYMENTS OF RS. 19,51,012/- BY INVOKING P ROVISIONS OF SECTION 40A(3) R.W.R. 6DD(G)/(K) OF THE ACT. 3. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING DISALLOWANCE U/S 36(1)(VA) AMOUNTING TO RS. 39,198/- IN RESPECT OF P .P. PAYMENTS MADE BEFORE DUE DATE OF FILING OF RETURN U/S 139(1). 3. FACTS OF THE CASE ARE THAT THE APPELLANT IS A PRIVA TE LIMITED COMPANY ENGAGED IN MANUFACTURING OF CERAMIC AND VITRIEFIED TILES. FOR THE YEAR UNDER CONSIDERATION RETURN OF INCOME WAS FILED ON 30.09.2011 DECLARING TOTAL INCOME AT RS. 88,44,902/- AFTER ISSUE NOTICE OF U/S. 142(1) WAS I SSUED AND ASSESSING OFFICER HAS COMPLETED ASSESSMENT U/S. 143(3) AFTER VERIFYIN G THE DETAILS AND DETERMINED TOTAL INCOME AT RS. 1,10,93,344/- RESULTING INTO AD DITION OF RS. 22,48,442/-. 4. NOW WE COME TO GROUND NO. 1 RELATING TO DISALLOWANC E DEPRECIATION ON CAPITAL SUBSIDY RECEIVED UNDER CREDIT LINK CAPITAL SUBSIDY SCHEME BEING NOT REDUCED FROM THE COST OF MACHINERY. 5. IN THIS CASE, ASSESSING OFFICER HAS MADE DISALLOWAN CE OF DEPRECIATION CLAIMED ON PLANT AND MACHINERY BY REDUCING CAPITAL SUBSIDY OF RS. 15 LACS RECEIVED BY THE APPELLANT IN EARLIER YEAR UNDER CREDIT LINK CAP ITAL SUBSIDY SCHEME. DUE TO ADJUSTMENT IN WDV OF PLANT AND MACHINERY BY THE AMO UNT OF CAPITAL SUBSIDY OF RS. 15 LACS. THE DEPRECIATION CLAIM WAS RECEIVED BY RS. 162562/-. ITA NO. 219/ A/15 & 2133/AHD/2017 . A.Y. 2011-12 3 6. THEREAFTER IN APPEAL LD. CIT(A) CONFIRMED ACTION OF THE A.O. LD. A.R. CITED JUDGMENT OF THIS BENCH IN ASSESSEES OWN CASE IN AS SESSMENT YEAR 2009-10 WHERE IN SIMILAR CIRCUMSTANCES APPEAL OF THE REVENU E WAS DISMISSED. RELIEF WAS CONFIRMED BY THE ITAT IN ITA NO. 1588/AHD/2013. 7. THUS, IN PARITY WITH THE ITAT ORDER, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 8. NOW WE COME TO NEXT GROUND RELATING TO DISALLOWANCE U/S 40A(3) OF RS. 1951012/-. 9. IN THIS CASE, LD. A.O. MADE DISALLOWANCE OF TRANSPO RT PAYMENT OF RS. 1951012/- BY INVOKING PROVISION OF SECTION 40A(3) READ WITH R ULE 6DD(G)/(K) OF THE ACT. 10. THEREAFTER IN APPEAL LD. CIT(A) CONFIRMED ACTION OF THE A.O. 11. AT THE OUTSET, LD. A.R. STATED THAT ISSUE IS NO MOR E RES INTEGRA AND COVERED IN FAVOUR OF APPELLANT IN ITS OWN CASE BY THE ITAT IN ASSESSEES OWN CASE IN ITA NO. 1588/AHD/2013 FOR ASSESSMENT YEAR 2009-10 WHERE IN IN SIMILAR FACTS AND CIRCUMSTANCES APPEAL OF THE REVENUE WAS DISMISSED, RELIEF TO THE ASSESSEE WAS CONFIRMED. AND APART FROM THAT LD. A.R. HAS ALSO S UBMITTED A CERTIFICATE FROM TALATI THAT IN THE AREA NEARBY TO THE ASSESSEE, THE RE ARE NO BANKING FACILITIES ARE AVAILABLE. 12. THUS IN PARITY WITH THE ITAT ORDER AND ASSESSEE HAS FILED CERTIFICATE FROM THE REVENUE OFFICIALS TO THE EFFECT THAT THERE ARE NO B ANKING FACILITY AVAILABLE IN THE AREA FROM WHERE APPELLANT IS OPERATING, WE ALLOW TH IS GROUND OF APPEAL OF THE ASSESSEE. ITA NO. 219/ A/15 & 2133/AHD/2017 . A.Y. 2011-12 4 13. NOW WE COME TO GROUND RELATING TO DISALLOWANCE OF P F PAYMENT U/S 36(1)(VA) OF RS. 39198/-. 14. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSESSEE HAS MADE LATE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARD S PROVIDENT FUND, ESI ETC. 15. AND IN REPLY TO THE LOWER AUTHORITIES, APPELLANT CO ULD NOT GIVE SATISFACTORY EXPLANATION AS TO WHY LATE PAYMENT OF EMPLOYEES CO NTRIBUTION TO PF/ESI SHOULD NOT BE ADDED TO TOTAL INCOME AS PER INCOME T AX ACT. 16. AS WE CAN SEE, ISSUE IN QUESTION A SQUARELY COVERED IN FAVOUR OF REVENUE AND AGAINST THE ASSESSEE IN THE MATTER OF GSRTC (SUPRA) WHEREIN IT IS HELD AS UNDER: 'SECTION 438, READ WITH SECTION 36(1)(VA) OF THE IN COME-TAX ACT, 1961 - BUSINESS DISALLOWANCE - CERTAIN DEDUCTIONS TO BE ALLOWED ON ACTUAL PAYMENT (EMPLOYEES CONTRIBUTION) - WHETHER WHERE AN EMPLOYER HAS NOT C REDITED SUM RECEIVED BY IT AS EMPLOYEES' CONTRIBUTION TO EMPLOYEES' ACCOUNT IN RE LEVANT FUND ON OR BEFORE DUE DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1)(VA), ASS ESSES SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT THOUGH HE DEPOSITS SAME BE FORE DUE DATE PRESCRIBED UNDER SECTION 43B I.E., PRIOR TO FILING OF RETURN UNDER S ECTION 139(1) -HELD, YES - ASSESSEE STATE TRANSPORT CORPORATION COLLECTED A SUM BEING P ROVIDENT FUND CONTRIBUTION FROM ITS EMPLOYEES - HOWEVER, IT HAD DEPOSITED LESSER SUM IN PROVIDENT FUND ACCOUNT - ASSESSING OFFICER DISALLOWED SAME UNDER SECTION 43B -HOWEVER, COMMISSIONER (APPEALS) DELETED DISALLOWANCE ON GROUND THAT EMPLO YEES CONTRIBUTION WAS DEPOSITED BEFORE FILING RETURN - WHETHER SINCE ASSESSES HAD N OT DEPOSITED SAID CONTRIBUTION IN RESPECTIVE FUND ACCOUNT ON DATE AS PRESCRIBED IN EX PLANATION TO SECTION 36(1 )(VA), DISALLOWANCE MADE BY ASSESSING OFFICER WAS JUST AND PROPER - HELD, YES [PARA 8] [IN FAVOUR OF REVENUE] 17. RESPECTFULLY FOLLOWING THE JURISDICTIONAL HIGH COUR T ORDER, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. ITA NO. 219/ A/15 & 2133/AHD/2017 . A.Y. 2011-12 5 18. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ITA NO.2133/AHD/2017 FOR A.Y. 2011-12 19. NOW WE COME TO PENALTY APPEAL CONSEQUENTIAL TO THE QUANTUM APPEAL AND APPELLANT HAS TAKEN SOLELY GROUND: THE LD. CIT(A) ERRED ON FACTS AND IN LAW CONFIRMI NG PENALTY U/S 271(1)(C) AMOUNTING TO RS. 7,02,100/-. 20. SINCE WE HAVE GIVEN PART RELIEF TO THE ASSESSEE IN QUANTUM PROCEEDING BUT WE HAVE CONFIRMED ACTION OF THE REVENUE AUTHORITY WITH REGARD TO CONFIRMATION OF DISALLOWANCE U/S 36(1)(VA) AMOUNTING TO RS. 39,198/ - IS CONCERNED SAME DOES NOT ATTRACT PENALTY BECAUSE ASSESSEE HAS GIVEN ALL THE DETAILS BEFORE THE LOWER AUTHORITIES AND NEITHER MATERIAL WAS CONCEALED FROM THE AUTHORITY NOR ANY TAX EVASION WAS THERE. THUS IN SUCH CIRCUMSTANCES AS WE LL PENALTY CANNOT BE CONFIRMED. 21. IN THE RESULT, PENALTY IMPOSED AND CONFIRMED BY THE LOWER AUTHORITY IS DELETED. ORDER PRONOUNCED IN OPEN COURT ON 11- 09- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 11 /09/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)