Konark Aquatics & Export (P) Ltd, Bhubaneswar V. ACIT, Circle-2(1), Bhubaneswar,

ITA 358/CTK/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3846 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 19-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIGGA
• Assessee Lawyers: P K MISHRA
• Keywords: Depreciation
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 KONARK AQUATICS & EXPORTS PVT LTD., PLOT NO - 1, SAHEED NAGAR, BHUBANESWAR. VS. ACIT, CIRCLE 2(1), BHUBANESWAR. PAN/GIR NO. AAACK 7219 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.MISHRA, AR REVENUE BY : SHRI A.TIGGA, DR DATE OF HEARING : 25 /04/ 2017 DATE OF PRONOUNCEMENT : 28 /04/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - II, BHUBANESWAR , DATED 25.10.2012 , FOR THE ASSESSMENT YEAR 2007 - 08 . 2. GROUND NOS.1,2,3,48,9,10 READ AS UNDER: 1. FOR THAT THE ORDER OF ASSESSMENT AS FRAMED B Y THE LEARNED ASSESSING OFFICER AS WELL AS ORDER OF CIT (A) - 1I, BHUBANESWAR HAS NEITHER BEEN BASED ON THE FACTS AND CIRCUMSTANCE OF THE CASE NOR ON POINTS OF LAW. 2. FOR THAT THE ASSESSMENT AS FRAMED BY THE LEARNED ASSESSING OFFICER IS NOT BASED ON FACT AND THEREFORE NOT MAINTAINABLE IN THE EYES OF LAW. 2 ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 3. FOR THAT ADDITION TO THE TUNE OF RS.8100/ - UNDER THE HEAD PROFESSIONAL TAX IS NOT SUSTAINABLE ON FACT AND LAW AND LIABLE TO BE DELETED. 4. FOR THAT ADDITION TO THE TUNE OF RS.88116/ - UNDER THE HEAD SER VICE TAX NOT SUSTAINABLE ON FACT AND LAW AND LIABLE TO BE DELETED. 8. FOR THAT THE ADDITION TO THE TUNE OF RS.1,76,334/ - UNDER THE HEAD DEPRECIATION NOT SUSTAINABLE ON FACT AND LAW AND LIABLE TO BE DELETED. 9. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD O R AMEND ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 10. FOR THESE GROUNDS AND OTHER GROUNDS, IF ANY THAT WILL BE ADDUCED AT THE TIME OF HEARING. IT IS PRAYED THAT THE ORDER OF ASSESSMENT BE QUASHED AND THE DEMAND B E ANNULLED IN THE INTEREST OF JUSTICE AND EQUITY. 4. AT THE TIME OF HEARING, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE ABOVE GROUNDS OF APPEAL AND HENCE, SAME ARE DISMISSED FOR WANT OF PROSECUTION . 5 . IN GROUND NOS.5 & 6, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER DISALLOWING RS.77,51,608/ - UNDER THE HEAD OCEAN FREIGHT , RS.1,14,110/ - UNDER THE HEAD SURVEY EXPENSES , RS.4,49,815/ - UNDER THE HEAD TESTING CHARGES AND RS. 41,298/ - UNDER THE HEAD LEGAL CHARGES. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE PAYMENT OF RS.77,51,608/ - , RS.1,14,110/ - UNDER THE HEAD SURVEY EXPENSES , RS.4,49,815/ - UNDER THE HEAD TESTING CHARGES AND RS. 41,298/ - UNDER THE HEAD LEGAL CHARGES A GGREGATING TO RS.83,56,831/ - ON WHICH TDS WAS NOT DEDUCTED BY THE ASSESSEE U/S 194C OF THE ACT. THEREFORE, BY INVOKING THE PROVISIONS OF 3 ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER DISALLOWED THE DEDUCTION FOR THE SAME. 7. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8. BEFORE US, THE ARGUMENT OF THE LD A.R. OF THE ASSESSEE IS THAT AS CAN BE OBSERVED FROM THE ORDER OF THE ASSESSING OFFICE R THAT FROM THE PROFIT AND LOSS ACCOUNT, HE OBSERVED THAT THE ASSESSEE HAS DEBITED RS.77,51,608/ - TOWARDS OCEAN FREIGHT, RS.1,14,110/ - TOWARDS SURVEY EXPENSES, RS.4,49,815/ - TOWARDS TESTING CHARGES AND RS.41,298/ - TOWARDS LEGAL CHARGES, ON WHICH NO TDS HAS BEEN DEDUCTED AND THEREFORE, DEDUCTION WAS DISALLOWED BY THE ASSESSING OFFICER. IT WAS HIS SUBMISSION THAT AT THE END OF THE FINANCIAL YEAR 31.3.2007, NO AMOUNT WAS OUTSTANDING AND PAYABLE UNDER THE ABOVE HEADS OF EXPENSES. THEREFORE, IN VIEW OF THE DECI SION OF HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES (P) LTD., (2013) 357 ITR 642(ALL), NO DISALLOWANCE IS WARRANTED. HE FURTHER SUBMITTED THAT THE SLP FILED AGAINST THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014. HE ALSO SUBMITTED THAT WHERE THERE ARE CONTRARY DECISIONS OF HO NBLE HIGH COURTS ON AN ISSUE AND NONE OF WHICH IS HONBLE JURISDICTIONAL HIGH COURT, THEN THE DECISION IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS.VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). 4 ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 9. LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES AND COULD NOT CONTROVERT THE ABOVE SUBMISSION OF LD A.R. OF THE ASSESSEE THAT OUT OF THE EXPENDITURE AGGREGATING TO RS.83,56,831/ - CLAIMED BY THE ASSESSEE UNDER THE ABOVE HEADS, NO AMOUNT WAS OUT STANDING AND PAYABLE AS ON 3.1.3.2007. 10 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES (P) LTD., (SUPRA) AND, T HEREFO RE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. V ICTOR SHIPPING SERVICES (P) LTD(SUPRA) , WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE DISALLOWANCE OF RS.83,56,831/ - MADE U/S.40(A)(IA) O F THE ACT AND ALLOW THE ABOVE GROUNDS OF APPEAL OF THE ASSESSEE. 11. IN GROUND NO.7 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER DISALLOWING DEDUCTION UNDER THE HEAD EMPLOYEES CONTRIBUTION TO ESI OF RS,3,86,372/ - AND EMPLOYEES CO NTRIBUTION TO PF OF RS.47,135/ - 12. THE ASSESSING OFFICER DISALLOWED THE ABOVE CLAIM OF THE ASSESSEE ON THE GROUND THAT PAYMENT WAS NOT MADE WITHIN THE DUE DATES PROVIDED UN DER THE ESI AND PF ACT. 13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5 ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 14. LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED DEDUCTION FOR EMPLOYEES CONTRIBUTION TO ESI OF RS.3,86,372/ - AND TO PF OF RS.47,1 35/ - , AS THE SAID AMOUNTS WERE NOT DEPOSITED WITH THE CONCERNED AUTHORITIES WITHIN THE DUE DATE PRESCRIBED UNDER THE CONCERNED ACT. HE SUBMITTED THAT THE PAYMENTS WERE MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S.139(1) OF T HE ACT AND, THEREFORE, THE DISALLOWANCE MADE WAS NOT WARRANTED. 15. LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES AND COULD NOT CONTROVERT THE ABOVE SUBMISSION OF THE LD A.R. 16. WE FIND THAT THE IT IS NOT IN DISPUTE THAT THE EMPLOYEES CONTRIBUTION TO ESI OF RS.3,86,372/ - AND TO PF OF RS.47,135/ - , WERE PAID BY THE ASSESSEE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S.139(1) OF THE ACT AND THE REASONS FOR DISALL OWING THE SAME WAS THAT THE PAYMENTS WERE NOT MADE WITHIN THE DUE DATE SPECIFIED UN DER THE CONCERNED ACT. 17. WE FIND THAT HONBLE DELHI HIGH COURT IN CIT VS. AIMIL LIMITED [2010] 321 ITR 508 ( DEL) HAS HELD THAT THE EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI ETC. DEPOSITED AFTER THE DUE DATE BUT BEFORE THE TIME ALLOWED FOR FILING THE RETURN U/S.139(1) WILL NOT CALL FOR ANY DISALLOWANCE U/S.36(1)(VA). THEREFORE, WE SET ASIDE THE ORDERS OF LOWER AUTH ORITIES AND DELETE THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO ESI OF RS.3,86,372/ - AND TO PF OF RS.47,135/ - , AND ALLOW THIS G ROUND OF APPEAL OF THE ASSESSEE. 6 ITA NO.358/CTK/2014 ASSESSMENT YEAR : 2007 - 08 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 28 /04/2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (KULDIP SINGH) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER CUTTACK; DATED 28 /04/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : KONARK AQUATICS & EXPORTS PVT LTD., PLOT NO - 1, SAHEED NAGAR, BHUBANESWAR 2. THE RESPONDENT. ACIT, CIRCLE 2(1), BHUBANESWAR 3. THE CIT(A) - II, BHUBANESWAR 4. PR.CIT - II, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//