Sequel Logistics Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-8, Ahmedabad

ITA 2238/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8419 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Question of law
• Section: 143(3); 10AA; 28

Judgement Text

ITA NO. 2238/AHD/2014 SEQUEL LOGISTICS PVT LTD VS. DCIT ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 2238/AHD/2014 ASSESSMENT YEAR: 2010-11 SEQUAL LOGISTIS PVT LTD ..................A PPELLANT 431, CHETAN SOCIETY, BOPAL GHUMA ROAD, AHMEDABAD - 380058 [PAN : AAHCS 9813 P] VS. DY. COMMISSIONER OF INCOME-TAX ...........................RESPONDENT CIRCLE 8, AHMEDABAD APPEARANCES BY: PM MEHTA FOR THE APPELLANT PRASOON KABRA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 18.04.2018 DATE OF PRONOUNCING THE ORDER : 18.04.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 16 TH JUNE, 2014 PASSED BY THE BY THE CIT(A)-XIV, AHMEDA BAD, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE IN COME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2010-11. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE-APPE LLANT HAS RAISED THE FOLLOWING GRIEVANCE:- IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER FOR RS.2,39,822/- ON ACCOUNT OF DELAY IN DE POSIT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI U/S 2(24)(X) R.W.S. 36(1)(VA) OF THE ACT, EVEN THOUGH THE SAME WAS DEPOSITED BEFORE THE DUE D ATE OF FILING THE RETURN. THE ASSESSING OFFICER MAY BE DIRECTED TO DELETE THI S ADDITION. 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE A FORESAID ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY HONBLE JURISDICTIO NAL HIGH COURTS JUDGMENT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPOR ATION, 366 ITR 170 (GUJ.), WHEREIN IT IS CATEGORICALLY HELD THAT IN THE CASE O F DELAYED DEPOSIT OF EMPLOYEES CONTRIBUTION TO PF, THE SAME WILL NOT BE DEDUCTABLE IN COMPUTING INCOME UNDER SECTION 28 OF THE ACT. THE LAW SO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IS BINDING ON US. THE MERE FACT THAT AN APPEAL AGAINS T THE SAID DECISION IS PENDING ITA NO. 2238/AHD/2014 SEQUEL LOGISTICS PVT LTD VS. DCIT ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 BEFORE THE HONBLE SUPREME COURT DOES NOT DILUTE BI NDING NATURE OF THIS JUDICIAL PRECEDENT. AS REGARD DISMISSAL OF SLP IN THE CASE OF RAJASTHAN STATE BEVERAGES CORPORATION LTD, (2017) 84 TAXMANN.COM 185 (SC), IT IS ONLY ELEMENTARY THAT WHEN A SLP IS DISMISSED BY A NON-SPEAKING ORDER, IT DOES N OT CONSTITUTE A LAW DECLARED BY HONBLE SUPREME COURT, AND AS SUCH, IT IS NOT BINDI NG UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA. THE AUTHORITY, FOR THIS PRO POSITION, IS CONTAINED IN A SERIES OF JUDGMENTS OF HONBLE SUPREME COURT, INCLUDING, INTE R ALIA, IN THE CASES OF STATE OF MANIPUR VS. THINGUJAM BROJEN MEETAI, (1996) 9 SCC 2 9; OM PRAKASH GARGI V. STATE OF PUNJAB, (1996) 11 SCC 399 AND SUN EXPORT CORPN V . COLLECTOR OF CUSTOMS, AIR 1997 SC 2658. WE, THEREFORE, SEE NO LEGALLY SUS TAINABLE MERIT IN THE CASE OF THE ASSESSEE AND, RESPECTFULLY FOLLOWING THE JUDGMENT O F HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT C ORPORATION (SUPRA), DISMISS THE GRIEVANCE OF THE ASSESSEE. 4. IN THE RESULT, GROUND NO.1 IS DISMISSED. 5. IN GROUND NO.2, THE ASSESSEE HAS RAISED THE FOLL OWING GRIEVANCES:- 2.1 IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION AMOUNTING TO RS.2,18,090/- PERTAINING TO PRIOR PERIOD EXPENSES M ADE BY THE ASSESSING OFFICER, WHEN NO SUCH DISALLOWANCE IS CALLED FOR 2.2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE APPELLANT'S CASE, THE LEARNED CIT(A) HAS ERRED IN OVERLOOKING THE FACT TH AT THE AMOUNT OF PRIOR PERIOD EXPENDITURE IS MINOR IN NATURE IN COMPARISON WITH THE AGGREGATE EXPENDITURE RUNNING INTO CRORES OF RUPEES. HE OUGHT TO HAVE DIRECTED ASSESSING OFFICER TO DELETE DISALLOWANCE SO MADE. 2.3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE FACT TH AT TDS PERTAINING TO THE SECURITY EXPENSES CONSIDERED AS PRIOR PERIOD EXPENS ES WAS PAID ONLY IN A.Y.2010-11, HENCE SUCH EXPENDITURE IS REQUIRED TO BE ALLOWED AS AN EXPENSE IN CURRENT ASSESSMENT YEAR ONLY. 2.4. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE APPELLANT'S CASE, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE FACT TH AT THE TAX RATES PERTAINING TO THE ASSESSMENT YEAR IN QUESTION AND THE IMMEDIATELY PRECEDING YEAR ARE UNIFORM, HENCE NO DISALLOWANCE CAN BE MADE ONLY ON THE GROUND THAT AN EXPENDITURE PERTAINING TO AN EARLIER YEAR IS CLAIME D IN THE CURRENT YEAR. 6. WE FIND THAT THIS ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 20.07.2017 IN THE CASE OF PRI. CIT VS. ADANI ENTERPRISES LTD IN TAX APPEAL NO. 573 OF 2016, WHEREIN THE HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER:- REVENUE HAS FILED THIS APPEAL RAISING THE FOLLOWING QUESTIONS FOR OUR CONSIDERATION: (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN WAS RIGHT IN CONFIRM ING OF DISALLOWANCE OF PRIOR PERIOD EXPENDITURE OF RS.3,07,53,106/- BY THE LD. CIT(A)? ITA NO. 2238/AHD/2014 SEQUEL LOGISTICS PVT LTD VS. DCIT ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN CONFIRMING THE DISAL LOWANCE OF RS.50,31,149/- OUT OF EXEMPTION CLAIMED U/S. 10AA O F THE ACT? INSOFAR AS QUESTION (A) IS CONCERNED, IN A SEPARATE TAX APPEAL BEING TAX APPEAL NO.566/2016, AGAINST THE SAME ASSESSEE, WE M ADE THE FOLLOWING OBSERVATIONS : '2. MAIN QUESTION IS SUM OF RS.67.88 IACS (ROUNDED OFF) WHICH THE ASSESSING OFFICER AND CIT(APPEALS) DISALLOWED TREAT ING THE EXPENDITURE AS A PRIOR PERIOD EXPENDITURE. THE TRIB UNAL REVERSED THE FINDINGS OF THE REVENUE AUTHORITIES PRIMARILY ON TW O GROUNDS. FIRSTLY, THAT THE ASSESSEE BEING A COMPANY WAS CHARGED UNIFO RMLY FOR ALL YEARS AND WOULD THEREFORE, HAVE NO REVENUE IMPLICATION OF WHETHER THE EXPENDITURE WAS RECOGNISED IN THIS ASSESSMENT YEAR OR EARLIER YEAR. THE SECOND GROUND WAS THAT IN ANY CASE, THE REVENUE HAD RECOGNISED THE PRIOR PERIOD INCOME. IF THAT BE SO, ACCORDING T O THE TRIBUNAL, IT WOULD BE UNFAIR NOT TO RECOGNISE THE EXPENDITURE ALSO OF THE PRIOR PERIOD. 3. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES AND HAVING PERUSED THE DOCUMENTS ON RECORD, WE SEE NO REASON TO INTERFERE. FIRSTLY, THE EXPENDITURE OF RS.67.881ACS IS A FRACTION OF THE TO TAL INCOME OF THE ASSESSEE COMPANY DECLARED AT RS.105.88 CRORES. FURT HER, EVEN THE REVENUE DOES NOT DISPUTE THAT THE COMPANY WOULD BE TAXED AT THE SAME RATE IN THE PRESENT ASSESSMENT YEAR OR DURING EARLIER YEAR. IT IS ALSO NOT DISPUTED THAT PRIOR PERIOD INCOME WAS DECL ARED BY THE ASSESSEE DURING THE CURRENT YEAR WHICH IS ALSO ACCE PTED BY THE REVENUE. NO QUESTION OF LAW THEREFORE, ARISES.' SO FAR AS QUESTION (B) IS CONCERNED, WE NOTICE THAT THE TRIBUNAL HAS MERELY REMANDED THE ISSUE. NO QUESTION OF LAW ARISES. TAX APPEAL IS DISMISSED. 7. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF ADANI ENTERPRISES LTD (SUPRA), WE DELETE TH E ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS.2,18,090/- TOWARDS PRIOR PE RIOD EXPENDITURE. 8. IN THE RESULT, GROUND NO.2 IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 18 TH APRIL, 2018 SD/- SD/- S S GODARA PRAMOD K UMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 18 TH DAY OF APRIL, 2018 **BT ITA NO. 2238/AHD/2014 SEQUEL LOGISTICS PVT LTD VS. DCIT ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ................COVERED MATT ER...18.04.2018... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 18.04.2018.......... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: 18.04.2018....... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .. 18.04.2018..... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : . 18.04.2018..... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER : 8. DATE OF DESPATCH OF THE ORDER: ......