DCIT, Kollam V. JAMES G OOMMEN, Kollam

ITA 267/COCH/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73893 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 20-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2011
• Court: TRIBUNAL
• Department Lawyers: VANI RAJ
• Keywords: Proportionate interest
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NOS. 266 & 267/COCH/2011 ASSESSMENT YEARS: 2006-07 & 2007-08 THE THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLLAM. VS. JAMES G. OOMMEN, M/S. ST. PAULS CASHEW FACTORY, PUTHOOR, KOTTARAKARA, KOLLAM. [PAN:AAAPO 9944R] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY MS. VANI RAJ, JR. DR ASSESSEE BY NONE DATE OF HEARING 09-08-2012 DATE OF PRONOUNCEMENT 24-08-2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS DATED 04-01-2011 PASSED BY THE LD. CIT(A)-I, TRIVANDRUM A ND THEY RELATE TO THE ASSESSMENT YEARS 2006-07 AND 2007-08. NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE, WE PROCEED TO DISPOSE OF THESE APPEALS EX PARTE, QUA T HE ASSESSEE. SINCE IDENTICAL ISSUES ARE URGED IN THESE APPEALS, THEY WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE FIRST ISSUE RELATES TO THE DECISION OF THE L D. CIT(A) IN ALLOWING DEDUCTION OF EMPLOYEES CONTRIBUTIONS TO PF, ESI AND WELFARE FUND S. 3. ACCORDING TO THE LD. DR, THE PROVISO TO SEC. 43B SHALL APPLY ONLY TO PAYMENT OF EMPLOYERS CONTRIBUTIONS TO PF AND ESI, WHICH IS NOT APPLICABLE TO EMPLOYEES CONTRIBUTION. THE LD D.R FURTHER SUBMITTED THAT, I N ORDER TO CLAIM DEDUCTION OF I.T.A. NOS. 266 & 267/COCH/2011 2 EMPLOYEES CONTRIBUTIONS, THE ASSESSEE SHOULD HAVE PAID THE AMOUNT BEFORE THE DUE DATES PRESCRIBED IN THE RESPECTIVE STATUTES AS PER THE PROVISION OF SEC. 36(1)(VA) OF THE ACT. 4. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD. THE ISSUE RELATING TO EMPLOYEES CONTRIBUTIONS TO PF & ESI HAS BEEN SETTLE D BY THE HONBLE SUPREME COURT IN THE CASE OF VINAY CEMENTS 213 CTR 268 WHICH WAS ALS O FOLLOWED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHARMENDRA SHARMA , 297 ITR 320. ACCORDING TO THESE DECISIONS, THE EMPLOYEES CONTRIBUTIONS TO PF AND ESI PAID BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME ARE ELIGIBLE FOR DE DUCTION U/S. 43B OF THE ACT. SIMILAR VIEW HAS ALREADY BEEN TAKEN BY THE CO-ORDINATE BENC H OF THIS TRIBUNAL IN THE CASES OF KERALA RUBBER AND RECLAIMS LTD. VS. ACIT, PARRY AGR O INDUSTRIES VS. ACIT AND HARRISON MALAYALAM LTD. VS. ACIT. WE NOTICE THAT THE DECI SION TAKEN BY LD CIT(A) IS IN ACCORDANCE WITH THE DISCUSSIONS MADE SUPRA. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD. CIT(A) ON THIS ISSUE. 5. THE NEXT ISSUE RELATES TO THE DELETION OF DISALL OWANCE OF THE PROPORTIONATE INTEREST ON FUNDS DIVERTED FOR NON-BUSINESS PURPOSE . THE ASSESSING OFFICER DISALLOWED A SUM OF RS.17,48,446/- AND RS.38,56,787/- RESPECTIVE LY FOR ASSESSMENT YEARS 2006-07 AND2007-08 AS INTEREST RELATABLE TO FUNDS DIVERTED FOR NON-BUSINESS PURPOSE. HOWEVER, THE LD. CIT(A) DELETED THE SAME WITH THE OBSERVATIO N THAT THE ASSESSEE IS HAVING SUFFICIENT CREDIT BALANCE IN THE CAPITAL ACCOUNT. HOWEVER, BEFORE US, NO MATERIAL WAS PLACED IN SUPPORT OF THE OBSERVATION MADE BY THE LD . CIT(A). IN THE ABSENCE OF ANY MATERIAL, WE HAVE NO OTHER OPTION BUT TO CONFIRM TH E ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS SET ASIDE. I.T.A. NOS. 266 & 267/COCH/2011 3 6. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE P ARTLY ALLOWED. PRONOUNCED ACCORDINGLY ON 24-08-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 24 TH AUGUST, 2012 GJ COPY TO: 1. JAMES G. OOMMEN, M/S. ST. PAULS CASHEW FACTORY, PUTHOOR, KOTTARAKARA, KOLLAM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDE R (ASSISTANT REGISTRAR) ITAT, COCHIN