M/s. GEETANJALI WOOLLENS P. LTD., MUMBAI V. JT. CIT (OSD) Rg. - 1(1), MUMBAI

ITA 3302/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0906 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 26-07-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 30-04-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A Y NAYAK
• Assessee Lawyers: VIJAY KOTHARI
• Section: 43B; 143(3); 142(1); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PRAMOD KUMAR (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO.3302/MUM/2007 ASSESSMENT YEAR- 2003-04 M/S. GEETANJALI WOOLLEN PVT. LTD., 415, DHEERAJ HERITAGE, MILAN SUBWAY JUNCTION, S.V. ROAD, SANTACRUZ (W), MUMBAI-400 054 PAN-AAACG3706G VS. THE JT. CIT (OSD) RANGE 1(1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VIJAY KOTHARI RESPONDENT BY: SHRI A.Y. NAYAK O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 20.2.2007 PASSED BY THE LD. CIT(A)-1 FO R THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS FILED ITS RETURN OF INCOME DECL ARING TOTAL INCOME AT RS. 43,59,349/-. THE RETURN WAS PROCESSE D U/S. 143(1). NOTICES WERE ISSUED U/S. 143(2) & 142(1) AND ASSESS MENT WAS COMPLETED U/S. 143(3) DT. 14.3.2006 DETERMINING TOT AL INCOME AT RS. 1,15,47,413/-. THE ASSESSING OFFICER WHILE COMPLETI NG THE ASSESSMENT MADE SOME DISALLOWANCES/ADDITIONS. ITA NO. 3302/M/07 2 3. ON FURTHER APPEAL BEFORE THE LD. CIT(A), THE CI T(A) PARTLY ALLOWED THE ASSESSEES APPEAL. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SHRI VIJAY KOTH ARI SUBMITTED AN ADDITIONAL GROUNDS WHICH IS AS FOLLOWS: THE LD. CIT(A) ERRED IN NOT DIRECTING THE DCIT TO COMPUTE DEDUCTION U/S. 10B PROPERLY AS PER THE PROVISIONS O F THE ACT AND WHILE DOING SO THE CIT(A) ERRED IN A) NOT DIRECTING THE AO TO EXCLUDE THE VALUE OF INT ER- UNIT TRANSFER OF GOODS FROM THE TOTAL TURNOVER OF T HE ELIGIBLE UNIT FOR THE PURPOSES OF COMPUTING DEDUCTI ON U/S. 10B. B) NOT APPRECIATING THAT THE INTER-UNIT TRANSFER OF GOODS, AS PER THE PROVISIONS OF S. 10B(7), IS ONLY FOR THE PURPOSES OF DETERMINING THE PROFITS OF THE UNDERTAK ING. HOWEVER, THE SAID AMOUNT IS NOT TO BE INCLUDED IN T HE TOTAL TURNOVER OF THE ELIGIBLE UNIT. C) NOT APPRECIATING THAT THE AO HIMSELF HAS NOT INCLUDED THE VALUE OF INTER-UNIT TRANSFER OF GOODS IN THE TOTAL TURNOVER OF THE EOU UNIT IN THE ASSESSMENT ORDERS PASSED U/S. 143(3) FOR A.Y.2004-05 AND 2006-07. ` 5. THE LD. DEPARTMENTAL REPRESENTATIVE OBJECTED TO THE ADMISSION OF ADDITIONAL GROUNDS STATING THAT FURTHER INVESTIG ATION HAS TO BE MADE IF THE GROUNDS ARE TO BE ADMITTED. 6. THE LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE WORKING GIVEN BY THE AO WHICH HAS BEEN REPRODUCED IN THE A SSESSMENT ORDER ESTABLISHING THAT ALL THE DETAILS ARE AVAILABLE AND NO FURTHER INVESTIGATION IS NECESSARY. ITA NO. 3302/M/07 3 7. SINCE THESE ADDITIONAL GROUNDS OF APPEAL FILED A RE ON LEGAL ISSUES AND DO NOT REQUIRE ANY ADDITIONAL INVESTIGATION OF FACTS, WE ADMIT THE ADDITIONAL GROUND IN THE LIGHT OF THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF JUTE CORPN. OF INDIA LTD. (187 ITR 688) AND NATIONAL THERMAL POWER CORPN. LTD., 229 ITR 383. 8. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT FOR THE A.Y. 2004-05 IN ITA NO. 2736/M/09 SIMILAR ADDI TIONAL GROUNDS HAD BEEN RAISED AND THE TRIBUNAL HAS HELD AS FOLLOWS: AFTER HEARING THE RIVAL CONTENTIONS WE ARE OF THE CONSIDERED OPINION THAT THIS LEGAL GROUND HAS TO BE ADMITTED AND THE ISSUE HAS TO BE SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. IN THE RESULT , THIS ADDITIONAL GROUND IS ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY FOLLOWING THE ORDER IN THE EARLIER YEA R, WE SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACC ORDANCE WITH LAW. 9. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE SHALL NOT PRESS GROUND NOS. 1 TO 8. THEREFORE IT IS DISMISSE D AS NOT PRESSED. 10. GROUND NO. 9 READS AS FOLLOWS: THE LD. CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF DELAY ON DEPOSIT OF EMPLOYEES CONTRIBUTION OF RS. 9 8,529/-. 11. WE FIND THAT THIS ISSUE IS COVERED BY THE DECIS ION IN THE CASE OF PIKPEN PVT. LTD. VS ITO IN ITA NO. 6847/MUM/2006 FO R A.Y. 2005-06 WHEREIN IT HAS BEEN HELD AS FOLLOWS: THE NEXT ISSUE IS DISALLOWANCE OF EMPLOYEES CONTRI BUTION TO PF AND ESIC OF RS. 43,72//-. THE SHORT CONTROVERSY BEF ORE US IS IN RESPECT OF THE PAYMENT OF THE EMPLOYEES CONTRIBUTION TO P.F./E .S.I.C BEYOND THE ITA NO. 3302/M/07 4 GRACE PERIOD WHICH WAS RELATING TO THE MONTH OF FEB RUARY. THE LD COUNSEL RELIED ON THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF CIT V/S. ALOM EXTRUSION LTD., 3/9 ITR 306. THE A.O MADE THE DISALLOWANCE U/S. 36(/)(VA) AS HE WAS OF THE OPINION THAT THE EM PLOYEES CONTRIBUTION TO PF/ESIC EVEN IF MADE BEFORE FILING OF THE RETURN OF INCOME IS NOT COVERED U/S. 43B OF THE I.T. ACT. IN THE CASE OF ALOM EXTRU SION LTD.(SUPRA), THE ISSUE BEFORE THEIR LORDSHIP WAS WHETHER THE OMISSIO N OF SECOND PROVISO TO SECTION 43B OF THE I.T. ACT /96/ BY THE FINANCE ACT 2003 OPERATED W.E.F. /.2.2004 OR WHETHER IT OPERATED RETROSPECTIVELY W.E .F. /.4./988. IN THE SAID CASE ALSO, THE ISSUE WAS CONCERNING THE CONTRIBUTIO N PAYABLE BY THE EMPLOYER TO THE P.F/SUPERANNUATION FUND OR ANY OTHE R FUND OF WELFARE OF THE EMPLOYEES. IN OUR OPINION, NOW THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF ALOM EXTRUSION LTD. (SUPRA). WE, THEREFORE, ALLOW T HE GROUND TAKEN BY THE ASSESSEE AND DELETE THE ADDITION. 12. AS REGARDS GROUND NO. 10 WITH RESPECT TO PENAL TY U/S. 271(1)(C), WE FIND THAT THIS GROUND IS REDUNDANT AND DISMISSIN G THE SAME. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JULY, 2010 SD/- SD/- (PRAMOD KUMAR ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 30 TH JULY, 2010 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 3302/M/07 5 DATE INITIALS 1 DRAFT DICTATED ON: 2 7 . 7 .2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 28.7.2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______