ACIT, Jaipur V. RAJASTHAN STATE SEEDS CORPORATION LTD., Jaipur

ITA 25/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99489 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Assessee Lawyers: P C PARWAL CA DHK

Judgement Text

ITA NO. 25/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS . M/S. RAJASTHAN STATE SEEDS CORPORATION LTD. 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 25/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 THE ACIT CIRCLE- 6 JAIPUR CUKE VS. M/S. RAJASTHAN STATE SEEDS CORPORATION LTD., KRISHI BHAWAN JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAACR 8882 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20/11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A)- JODHPUR CAMP AT JAIPUR DATED 04-11-2013 FOR THE AS SESSMENT YEAR 2007-08 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED BY THE R EVENUE. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOL DING PRIOR PERIOD EXPENSES AS ALLOWABLE EXPENSES. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALL OWING ITA NO. 25/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS . M/S. RAJASTHAN STATE SEEDS CORPORATION LTD. 2 DEDUCTION FOR THE CONTRIBUTION OF RS. 6,99,566/- MA DE TO AN UNAPPROVED GRATUITY FUND. (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOL DING CONTRIBUTION OF RS. 7,57,974/- TO STATE RENEWAL FUN D AS ALLOWABLE EXPENDITURE. 2.1 THE LD. DR IS HEARD. 2.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ABOVE GROUNDS ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HIS BENCH FOR WHICH THE LD. AR HAS RELIED ON THE FOLLOWING ORDERS OF THIS BENCH . (I) ORDER DATED 21-08-2009 IN ITA NO. 307/JP/2009 I N THE CASE OF ACIT VS. M/S. RAJASTHAN STATE SEEDS CORPORA TION LTD. JAIPUR. (II) ORDER DATED 16-07-2010 IN ITA NO. 919/JP/2009 IN THE CASE OF ACIT VS. M/S. RAJASTHAN STATE ROAD DEVELOPM ENT CONSTRUCTION CORPORATION LTD., JAIPUR 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS GROUND NO. 1 OF THE REVENUE, WE FIND THAT ITAT JAIPUR BENCH HAS DECIDED THIS ISSUE IN ASSESSE E'S OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 21- 08-2009 IN ITA NO. 307/JP/2009 BY FOLLOWING OBSERVA TIONS. 5. BRIEFLY STATED, THE ASSESSEE CLAIMED PRIOR PERIO D EXPENSES OF RS. 1,96,917/- OUT OF WHICH THE A O DISALLOWED RS. 1,95,203/- BY HOLDING THAT THE SAME DID NOT CRYSTALLIZED DURIN G THE YEAR. ITA NO. 25/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS . M/S. RAJASTHAN STATE SEEDS CORPORATION LTD. 3 6. THE LD. CIT (A) DELETED THE DISALLOWANCE IN VIEW OF THE DECISION OF THIS BENCH. 7. AFTER CONSIDERING THE RIVAL SUBMISSION, WE FIND THAT ASSESSEE VIDE HIS LETTER DATED 24.4.2008, BEFORE TH E AO HAS FILED THE COMPLETE DETAILS OF THE PRIOR PERIOD EXPENSES O F RS. 1,96,917/-. VIDE LETTER DATED 26.4.2008, VOUCHERS IN RESPECT OF THE SAME WERE FILED. FROM THE DETAILS WE NOTE THAT THE APPROVAL F OR PAYMENT OF THESE EXPENDITURE WERE GIVEN DURING THE YEAR AND TH EREFORE THE LIABILITY CRYSTALISED DURING THE YEAR IN VIEW OF TH ESE FACTS AND THE CONSISTENT VIEW OF THIS BENCH THAT THE LIABILITY CR YSTALISED ON APPROVAL OF PAYMENT, WE FIND NO INFIRMITY IN THE OR DER OF LD.CIT (A) DELETING THE DISALLOWANCE. THEREFORE, THE GROUND NO.2 OF THE REVENUE IS DISMISSED. 2.3.1 AS REGARDS GROUND NO. 2 OF THE REVENUE, WE FI ND THAT ITAT JAIPUR BENCH HAS DECIDED THIS ISSUE IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER DA TED 21-08-2009 IN ITA NO. 307/JP/2009 BY FOLLOWING OBSERVATIONS. GROUND NO.1 : THE LD. CIT(A) HAS ERRED IN DIRECTI NG THE AO TO DELETE THE ADDITION OF RS. 7,89,745/- MADE ON ACCOU NT OF DISALLOWANCE OF CONTRIBUTION MADE TO LIC GROUP GRATUITY FUND HOL DING THE SAME TO BE UNAPPROVED BY PRESCRIBED AUTHORITY. 2. WE HAVE HEARD THE PARTIES. THE BRIEF FACTS ARE T HAT THE AO HELD THAT ASSESSEE HAS CLAIMED TO HAVE APPLIED FOR APPROVAL OF LIC GROUP GRATUITY FUND ON 31.03.1981 AND EVEN AFTER A LONG L APSE OF TIME, THE APPROVAL HAS NOT BEEN GRANTED. THUS THE ASSESEES G ROUP GRATUITY SCHEME HAS NOT BEEN APPROVED. AS PER SECTION 36(1)(V), SUM PAID FOR GRATUITY FUNDS IS DEDUCTIBLE IF SUCH PAYMENT IS MADE TOWARDS CONTRIBUTION TO APPROVED GRATUITY FUND. FURTHER, SECTION 40A (7) PR OVIDES THAT A PROVISION FOR GRATUITY FUND WILL NOT BE ADMISSIBLE, UNLESS IT IS TOWARDS CONTRIBUTION TO APPROVED GRATUITY FUND. THE AO ALSO RELIED UPON THE CASE OF CIT V/S ELECTRA (JAIPUR) PVT. LTD. 282 ITR 598 (ALL). ACCOR DINGLY, HE MADE DISALLOWANCE OF RS. 7,89,745/- IN RESPECT OF CONTRI BUTION TO GROUP GRATUITY SCHEME. 3. THE LD. CIT (A) DELETED THE DISALLOWANCE OF RS.7 ,89,745/- BY FOLLOWING THE DECISION OF ITAT, JAIPUR BENCH DE CISION IN THE CASE OF ITA NO. 25/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS . M/S. RAJASTHAN STATE SEEDS CORPORATION LTD. 4 APPELLANT ITSELF FOR ASSESSMENT YEAR 1996-97, 1997- 98 DATED 23.09.2005 AND FOR ASSESSMENT YEAR 2000-01 DATED 15.09.2006. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THERE IS NO DISPUTE AS TO THE FACT THAT ASSESSEE HAS APPL IED FOR APPROVAL OF THE SCHEME ON 31.03.1981. THE A O HAS NOT BROUGHT ANY M ATERIAL ON RECORD THAT THE APPROVAL TO THE SCHEME IS NOT ALLOWED. THE REFORE THE SCHEME CANNOT BE TAKEN AS NOT APPROVED. THE ASSESSEE CAN T BE MADE TO SUFFER FOR INACTION OF THE DEPARTMENT. CONSIDERING THESE FACTS , THIS BENCH IN ASSESSEES OWN CASE OF A.Y. 1996-97 & 1997-98 IN IT A NO. 58, 238/JP/2002 DATED 23-09-2005 AND AGAIN IN A.Y. 2000 -01 IN ITA NO. 85/JP/05 DT. 15.09.2006 ALLOWED THE CLAIM OF THE AS SESSEE. FOLLOWING THE SAME, WE DISMISS THE GROUND NO. 1 OF THE REVENUE . 2.3.2 AS REGARDS GROUND NO. 3 OF THE REVENUE, WE FI ND THAT ITAT JAIPUR BENCH HAS DECIDED THIS ISSUE IN THE CASE OF ACIT VS . RAJASTHAN STATE ROAD DEVELOPMENT CONSTRUCTION CORPORATION LTD. VIDE ITS ORDER DATED 16-07- 2010 IN ITA NO. 919/JP/2009 BY FOLLOWING OBSERVATIO NS AND THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 4. THE SECOND ISSUE ON WHICH THE REVENUE IS AGGRIEV ED IS AGAINST THE DELETION OF ADDITION OF RS.10 LAKHS ON ACCOUNT OF PAYMENT AS CONTRIBUTION TO STATE RENEWAL FUND. THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN AY 2006-07 VIDE ORDER DATED 26.2.2010 IN ITA NO.754/JP/2009. IT WILL BE USEFUL TO REPROD UCE PARAGRAPH 5 FROM THAT DECISION:- 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES. WE FIND THAT THE ISSUE UNDER CONSIDERATIO N IS SQUARELY COVERED BY THE DECISION OF ITAT IN CASE OF RAJASTHAN STATE SEED CORPORATION LTD. VS. ACIT IN I TA NO.233/JP/2009 DATED 25.5.2009 WHICH IS BASED UPON HON'BLE RAJASTHAN HIGH COURT JUDGMENTS IN THE CASES OF CIT VS. SHRI RAJASTHAN SYNTEX LTD. 221 CTR 410 (RAJ ) AND CIT VS. RAJASTHAN SPINNING AND WEAVING MILLS LTD. 2 74 ITR 465 (RAJ). THE FACTS OF HON'BLE RAJASTHAN HIGH COURT JUDGMENT IN CASE OF JODHPUR COOPERATIVE MARKETING SOCIETY WHICH IS RELIED BY THE AO IS DISTINGUISHABL E AS IN THAT CASE THE AMOUNT WAS PROVIDED FOR THE BENEFIT O F THE ITA NO. 25/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS . M/S. RAJASTHAN STATE SEEDS CORPORATION LTD. 5 EMPLOYEES. SINCE, IN THE PRESENT CASE ALSO THE AMO UNT WAS SET APART NOT FOR SHAREHOLDER BUT IT WAS PROVIDED F OR THE BENEFITS OF THE EMPLOYEES, BY FOLLOWING OUR EARLIER DECISIONS, WE UPHOLD THE ORDER OF CIT(A) ON THIS IS SUE. THIS GROUND OF THE DEPARTMENT IS DISMISSED. 5. HENCE, THE ISSUE RAISED BY THE REVENUE HAS ALREA DY BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE AY 2006-07, THEREFORE THE ISSUE IN THE ASSESSMENT YEAR UNDER CO NSIDERATION IS ALSO DECIDED AGAINST THE REVENUE. 2.3.3 RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF ITAT BENCH (SUPRA), THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 3.0. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/11/201 5. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT , CIRCLE- 6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. RAJASTHAN STATE SEEDS CORPO RATION LTD. JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.25/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR