ACIT, Jaipur V. KANHAIYALAL KALYANMAL, Jaipur

ITA 324/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4879 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Section: 43B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 324/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE ACIT, CIRCLE-6, JAIPUR CUKE VS. M/S KANHIYALAL KALYANMAL, 1, KK HOUSE, BHARAT MATA PATH, C- SCHEME, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACFK 9796 K IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ CO NO. 11/JP/16 (ARISING OUT OF ITA NO. 324/JP/16) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE ACIT, CIRCLE-6, JAIPUR CUKE VS. M/S KANHIYALAL KALYANMAL, 1, KK HOUSE, BHARAT MATA PATH, C- SCHEME, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACFK 9796 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIV PANDEY (CA) MISS. DAKSHAYANI PANDEY, ADV. JKTLO DH VKSJ LS@ REVENUE BY : SMT.NEENA JEPH (J CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.11.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/12/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) -2, JAIPUR DATED 01.01.2016 WHEREIN THE REVE NUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: ITA NO. 324/JP/16 ACIT CIRLE-6, JAIPUR VS. M/S KANHIYALAL KALYANMAL, JAIPUR 2 (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWA NCE OF COMMISSION OF RS. 65,65,621/- U/S 40(A)(IA) OF THE I.T. ACT, 1961 MADE BY AO. (2)(A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,28,599/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (2)(B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT EMPLOYEE S CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVISION OF SECTION 43B AN D NOT BY SECTION 36(1)(VA) R.W.S. 2(24)(X) OF IT ACT. 2. IN RESPECT OF ASSESSEES CROSS OBJECTION, THE LD AR SUBMITTED THAT THE ASSESSEE IN HIS CROSS OBJECTION, HAS SUPPORTED THE ORDER OF THE LD CIT(A) IN RESPECT OF GROUND OF APPEAL TAKEN BY THE REVENUE. ON PERUSAL OF THE CROSS- OBJECTION, IT IS NOTED THAT THE ASSESSEE HAS TAKEN IN ALL FIVE GROUNDS OF CROSS OBJECTION TWO GROUNDS ARE IN SUPPORT OF LD CIT(A) ORDER AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US AND THREE OTHER GROU NDS WHERE THE ASSESSEE HAS GOT THE NECESSARY RELIEF FROM THE LD CIT(A). H ENCE, IN RESPECT OF LATTER THREE GROUNDS, THE SAME ARE DISMISSED AS NOT PRESSE D. 3. NOW COMING TO THE GROUNDS OF APPEAL RAISED BY TH E REVENUE AND WHERE THE ASSESSEE IS IN CROSS-OBJECTION BEFORE US. 3.1 IN RESPECT OF GROUND NO.1 OF THE REVENUE AND GR OUND NO. 2 OF CROSS OBJECTION, THE LD. CIT(A) HAS GIVEN HIS FINDINGS AS UNDER: IN THE CONNECTION OF OTHER THREE PARTIES (M.ISHIKA WA, KIZAHASHI CO. LTD. AND V.H. TOORABALLY & CO. LTD.), THE AUTHORISED REP RESENTATIVE OF THE ASSESSEE SUBMITTED THE COPIES OF AGREEMENT WITH PAR TIES, DETAILED STATEMENT OF COMMISSION OF EXPORTS HAS BEEN SUBMITT ED WHICH CONTAINS ITA NO. 324/JP/16 ACIT CIRLE-6, JAIPUR VS. M/S KANHIYALAL KALYANMAL, JAIPUR 3 FULL PARTICULARS OF THE SALE TRANSACTION AND THE CO MMISSION VIZ. INVOICE NO., SHIPPING BILL NO., DATE OF SHIPMENT, BANK REFE RENCE NO., DESCRIPTION OF THE GOODS, BUYERS NAME , COUNTRY OR DESTINATION , BILL AMOUNT, FOB VALUE RATE OF COMMISSION AND AMOUNT OF COMMISSION A ND BILL REALIZED DATE. WHICH SHOWS THAT THE SERVICES RENDERED AND EXPENDITURE INCURRED IS CLEARLY IN THE NATURE OF COMMISSION, AS IS EVIDE NT FROM THE AGENCY AGREEMENT. FOLLOWING THE ORDER OF MY PREDECESSOR CIT(A)-II IN CONNECTION WITH THE CONCERN M/S ARJOO J LTD. AND TH E FACTS AND ISSUES ARE SIMILAR WITH THE ALL FOUR ABOVE MENTIONED PART IES, THE AO IS THEREFORE DIRECTED THE DELETE THE DISALLOWANCE OF COMMISSION OF TOTAL RS. 65,65,621/- TO THE ABOVE FOUR PARTIES (M/S ARJOO J . LTD ,M. ISHIKAWA, KIZAHASHI CO. LTD. AND V.H. TOORABALLY & CO. LTD. 3.2 DURING THE COURSE OF HEARING, THE LD AR REITERA TED HIS SUBMISSIONS MADE BEFORE THE LD CIT(A) AND FURTHER SUBMITTED THAT THE MATTER IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE B ENCH IN ASSESSEES OWN CASE FOR A.Y.2011-12 IN APPEAL NO. ITA NO. 56/JP/15 AND CO NO. 11/JP/15 DATED 12.02.2016. THE RELEVANT FINDINGS ARE AS UNDER: WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF READYMADE G ARMENTS AND IN CONNECTION WITH THE EXPORT, THE ASSESSEE HAS INCURR ED AN AMOUNT OF RS. 58,36,492/-. ON PERUSAL OF THE AGREEMENT WITH M/S ARJOO J. LTD. THE CIT(A) HAS GIVEN A CLEAR FINDING THAT THE SERVICES RENDERED AND EXPENDITURE INCURRED IS IN THE NATURE OF COMMISSION . GIVEN THE FACT THAT THE COMMISSION HAS BEEN PAID IN RELATION TO EXPORT OF GARMENTS OUTSIDE INDIA AND THE FACT THAT THE NO SERVICES HAVE BEEN R ENDERED IN INDIA WE ARE UNABLE TO ACCEDE TO THE ARGUMENTS OF THE LD. DR THAT THE SUBJECT PAYMENTS ARE TAXABLE IN INDIA. SIMILAR IS THE POSITION IN RESPECT OF PAYMENT OF RS . 144,975/- TO M. ISHIKAWA WHO HAS BEEN PAID COMMISSION IN RELATION T O EXPORT OF GARMENTS AS APPARENT FROM THE AGREEMENT AS WELL AS WORKING OF THE COMMISSION PAYMENTS. ACCORDINGLY, PROVISIONS OF SE CTION 195 ARE NOT ATTRACTED IN THE INSTANT CASE, HENCE THE DISALLOWAN CE OF EXPENDITURE OF RS.58,36,492/- U/S 40(A)(IA)(I) IS HEREBY DELETED. IN VIEW OF THE ABOVE, THE ITA NO. 324/JP/16 ACIT CIRLE-6, JAIPUR VS. M/S KANHIYALAL KALYANMAL, JAIPUR 4 GROUND TAKEN BY THE REVENUE IS DISMISSED AND CO OF THE ASSESSEE IS ALLOWED. 3.3 GIVEN THAT THE FACTS OF THE CASE ARE PARI-MATER IA WITH THE FACTS BEFORE THE COORDINATE BENCH, RESPECTFULLY FOLLOWING THE DE CISION OF THE COORDINATE BENCH REFERRED SUPRA, WE CONFIRM THE ORDER OF LD CI T(A). THE DEPARTMENT GROUND IS DISMISSED AND ASSESSEES GROUND IN CROSS OBJECTION IS ALLOWED. 4. IN RESPECT OF GROUND NO.2 OF THE REVENUE AND GRO UND NO. 1 IN ASSESSEES CROSS-OBJECTION, THE LD. CIT(A) HAS GIVEN HIS FINDI NGS AS UNDER: I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSME NT ORDER AND THE SUBMISSIONS OF THE APPELLANT. ADMITTEDLY, EMPLOYEE S CONTRIBUTION TO ESI AND PF HAS BEEN PAID BY THE APPELLANT, IN ALL INSTA NCES, BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1). TH IS FACT IS THEREFORE, NOT IN DISPUTE. IN VIEW OF THE JUDGEMENTS OF THE RAJAS THAN HIGH COURT IN THE CASE OF JAIPUR VIDHYUT VITRAN NIGAM LTD. 265 CTR 62 (RAJ.), CIT VS. STATE BANK OF BIKANER & JAIPUR (2014)99 DTR 131 (RAJ) AND ITAT, JAIPUR, IN THE CASE OF THE ASSESSEE, THE CLAIM OF THE APPELLANT IS ALLOWABLE. ACCORDINGLY, THE DISALLOWANCE MADE BY THE AO IS DIR ECTED TO BE DELETED. THIS GROUND IS ALLOWED. 4.1 SIMILAR ISSUE HAD COME UP EARLIER BEFORE THE CO ORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y.2011-12 IN APPEAL NO. I TA NO. 56/JP/15 AND CO NO. 11/JP/15 DATED 12.02.2016. THE RELEVANT FINDINGS A RE AS UNDER: REGARDING GROUND NO.2 WHERE THE REVENUE HAS CHALLE NGED THE DELETION OF RS. 5,47,582/- TOWARDS EMPLOYEES CONTRIBUTION TO PF AND ESI, THE LD. CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE EMP LOYEES CONTRIBUTION TO ESI AND PF HAS BEEN PAID BEFORE FILING OF THE RETUR N OF INCOME U/S 139(1) OF THE IT ACT. IN VIEW OF THE CONSISTENT STAND TAK EN BY THIS BENCH AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF STATE BANK OF BIKANER AND JAIPUR (99 DT R 129) AND OTHERS, THE GROUND TAKEN BY THE REVENUE IS DISMISSED. ITA NO. 324/JP/16 ACIT CIRLE-6, JAIPUR VS. M/S KANHIYALAL KALYANMAL, JAIPUR 5 4.2 THE LD. CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE EMPLOYEES CONTRIBUTION TO ESI AND PF HAS BEEN PAID BEFORE FIL ING OF THE RETURN OF INCOME U/S 139(1) OF THE IT ACT. IN VIEW OF THE CONSISTEN T STAND TAKEN BY THIS BENCH AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE RAJASTHAN HIGH COURT IN THE CASE OF STATE BANK OF BIKANER AND JAIPUR (99 DT R 129) AND OTHERS, THE GROUND TAKEN BY THE REVENUE IS DISMISSED AND ASSESS EES CROSS-OBJECTION IS ALLOWED . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED AND ASSESSEES CROSS OBJECTION IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/12/ 2016. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 01/12/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S KANHIYALAL KALYANMAL, JAIPUR 3. VK;DJ VK;QDR@ CIT II, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 324/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.