ACIT, Jaipur V. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., Jaipur

ITA 26/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99493 (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. 26/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION 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. 26/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 THE ACIT CIRCLE- 6 JAIPUR CUKE VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., SETU BHAWAN, JHALANA DOONGRI, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AABCR 9650 F 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 05-11-2013 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 CONTRIBUTION OF RS. 10.00 LACS TO STATE RENEWAL FUN D AS ALLOWABLE EXPENDITURE. ITA NO. 26/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. 2 (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALL OWING DEDUCTION FOR THE CONTRIBUTION OF RS. 17,94,199/- M ADE 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 PRIOR PERIOD EXPENSES AS ALLOWABLE EXPENSES. 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 16-07-2010 IN ITA NO. 919/JP/2009 I N THE CASE OF ACIT VS. M/S. RAJASTHAN STATE ROAD DEVELOPM ENT CONSTRUCTION CORPORATION LTD., JAIPUR. (II) ORDER DATED 21-08-2009 IN ITA NO. 307/JP/2009 IN THE CASE OF ACIT VS. M/S. RAJASTHAN STATE SEEDS CORPORA TION 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 2005-06 IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER DATED 16-07-2010 IN ITA NO. 919/JP/2009 BY FOLLOWING OBSE RVATIONS. 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 ITA NO. 26/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. 3 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 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. 2.3.1 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 2005-06 IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER DA TED 16-07-2010 IN ITA NO. 919/JP/2009 BY FOLLOWING OBSERVATIONS. 6. THE THIRD GRIEVANCE OF THE REVENUE IS IN RESPECT OF THE DELETION OF ADDITION OF RS.11,92,460/- MADE ON ACCO UNT OF DISALLOWANCE OF CONTRIBUTION TO GRATUITY FUND. ITA NO. 26/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. 4 7. THIS ISSUE HAS ALSO BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE AY 2006-07. WE REPRODUCE T HE RELEVANT PARAGRAPH 7 FROM THAT ORDER:- 7. WE HAVE HEARD AND CONSIDERED THE SUBMISSIONS OF THE PARTIES. WE FIND THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION O F ITAT IN CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD. F OR ASSESSMENT YEARS 1996-97 & 1997-98 IN ITA 58 & 238/JP/2002 VIDE ORDER DATED 23.9.2005. BY FOLLOWI NG THE SAME, WE UPHOLD THE ORDER OF CIT(A) WHO HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE AS THE BASIS THAT ASSESSEE HAD ALREADY APPLIED FOR THE APPROVAL, THUS THERE WA S NO LAPSE ON THE PART OF THE ASSESSEE. THIS GROUND OF THE DEPARTMENT IS THUS DISMISSED. 8. FOLLOWING THE DECISION IN THE CASE OF THE ASSESS EE FOR THE SUBSEQUENT YEAR, WE HOLD THAT LEARNED CIT(A PPEALS) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.11,92, 460/-. 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 DCIT VS . RAJASTHAN STATE SEEDS CORPORATION LTD. VIDE ITS ORDER DATED 21-08-2009 IN ITA NO. 307/JP/2009 BY FOLLOWING OBSERVATIONS AND THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 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. 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 ITA NO. 26/JP/2014 ACIT, CIRCLE- 6 JAIPUR VS. M/S. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD. 5 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. 2.3.3 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 ROAD DEVELO PMENT & CONSTRUCTION CORPORATION 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.26/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR