DCIT, CHENNAI V. M/s. ISoft R & D Ltd., CHENNAI

ITA 2639/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8069 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Deemed to accrue or arise in india
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 43B; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.2639/MDS./2016 / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-2(2), ROOM NO.512, 5 TH FLOOR, WANAPARTHY BLOCK, 121 M.G.ROAD, CHENNAI-34. VS. M/S.ISOFT R &D LTD., UNIT-13,BLOCK-2, SDF BUILDINGS, MEPZ-SE, TAMBARAM, SANATORIUM,CHENNAI-45. [PAN AAACI 7884 D ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT D.R /RESPONDENT BY : SHRI P.RAGHUNATHAN,C.A / DATE OF HEARING : 14 - 12 - 2016 / DATE OF PRONOUNCEMENT : 25 - 01 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-6, CHENNA I DATED 28.07.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. ITA NO.2639/MDS./15 :- 2 -: 2. THE MAIN GRIEVANCE OF THE REVENUE IN ITS APPEAL IS THAT SECTION 43B OF THE ACT HAS BEEN AMENDED BY THE FINA NCE ACT, 2003 AND HOWEVER, THERE IS NO CORRESPONDING AMENDMENT IN SEC.36(1)(VA) OF THE ACT AND THEREFORE, AMENDMENT MADE IN S.43B I S REQUIRED TO BE CONFIRNED TO S.43B ALONE AND IT CANNOT BE MADE APPL ICABLE TO S.36(1)(VA) OF THE ACT. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A 100% EXPORT ORIENTED UNIT (EOU) WITH SOFTWARE TECHNOLOGY PARKS OF INDIA ENGAGED IN THE BUSINESS OF OFF SHORE SERVICES IN RELATION T O PRODUCT DEVELOPMENT FOR THE GROUPS HELATH CARE VERTICAL. IN THIS CASE, THERE WAS BELATED REMITTANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND UNDER THE RESPECTIVE ACT, WHICH WAS TREATED AS DEEMED INCOME OF ASSESSEE AS PER PROVISIONS OF THE SECTION 2(24)(X) OF THE ACT R EAD WITH SEC.36(1)(VA) OF THE ACT BY THE AO. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CIT (A) DELETED THE ADDITION MADE BY THE AO. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. INDUSTRIAL SECU RITY & INTELLIGENCE ITA NO.2639/MDS./15 :- 3 -: INDIA PVT. LTD. IN MDS. 585 AND 586 OF 2015 & M.P. NO.1 OF 2015 DATED 24.07.2015 WHEREIN HELD THAT:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELI ED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRU SIONS LIMITED REPORTED IN 391 ITR 306, WHEREBY, THE SUPREME COURT HELD THAT OMISSION OF SECTION PROVISO TO SEC.43B AND AMENDMEN T TO THE FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATI VE IN NATUE AND ARE EFFECTIVE RETROSPECTIEL I.E. W.E.F 01.04.1988 I .E THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT I N THE CASE OF CIT VS. AIMIL LTD., REPORTED IN 321 ITR 508 HELD THAT I F THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWARDS PROVI DENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELE VANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE I NCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF PROVISIONS 43B AS AMENDED BY FINANCE ACT, 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED THE EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT W ITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME. HENCE, FOLLOW ING THE AFORESAID DECISIONS, WE FIND NO REASON TO DIFFER WI TH THE FINDINGS OF THE TRIBUNAL. IN VIEW OF THE ORDER OF THE TRIBUNAL, WE ARE INCLIN ED TO HOLD THAT EMPLOYEES CONTRIBUTION DEPOSITED BEYOND THE DUE DA TE SPECIFIED UNDER THE RELEVANT PROFIDENT FUND ACT, BUT BEGFORE THE DUE DATE OF FILING OF RETURN OF INCOME, SPECIFIED IN SEC.43B OF THE ACT, CANNOT BE TREATED AS DEEMED INCOME OF ASSESSEE WITHIN THE AMB IT OF S ITA NO.2639/MDS./15 :- 4 -: SEC.36(1)(VA) R.W.S.2(24)(X) OF THE ACT. ACCORDING LY, DELETION OF ADDITION MADE BY THE LD.CIT(A) IS JUSTIFIED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF