Uttar Pradesh Drug & Pharmaceuticals Co.Ltd., Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 362/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4396 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: NIDHI VERMA
• Keywords: Depreciation
• Section: 43B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.362/LKW/2015 ASSESSMENT YEAR 2011-12 D CIT RANGE - VI, LUCKNOW VS UTTAR PRADESH DRUGS & PHARMACEUTICALS CO. LTD. A-5, INDUSTRIAL AREA, KANPUR ROAD, LUCKNOW PAN AAACU 4413 A (RESPONDENT) (APPELLANT) SHRI RAJESH JAIN,CA APPELLANT BY SMT. NIDHI VERMA, CIT DR RESPONDENT BY 25/04/2016 DATE OF HEARING 27 / 06 /201 6 DATE OF PRONOUNCEMENT O R D E R PER MAHAVIR PRASAD, JM. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (APPEALS), LUCKNOW DATED 30.01.2015 FOR THE ASSESSMENT YEAR 20 11-12. 2. THE GROUNDS RAISED BY ASSESSEE ARE AS UNDER:- 1.1 BECAUSE THE LEARNED FIRST APPELLATE AUTHORI TY ERRED IN UPHOLDING THE DISALLOWANCE OF RS.41,14,5737- BEING EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI BY THE LEARN ED ASSESSING OFFICER AS NO SUCH EMPLOYEES CONTRIBUTION WAS RECEIVED BY THE APPELLANT. 1.2 BECAUSE THE LEARNED FIRST APPELLATE AUTHORIT Y FAILED TO APPRECIATE THAT SINCE THE SALARY FOR THE RELEVANT PERIOD WAS N OT PAID TO THE EMPLOYEES HENCE THEIR CONTRIBUTION TOWARDS PROVIDEN T FUND AND ESI WAS NOT RECEIVED BY THE APPELLANT. 2 2. BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY O UGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO QUANTIFY THE AMOU NT OF CARRY FORWARD OF LOSSES AND DEPRECIATION FOR FURTHER CARR Y FORWARD ALONG WITH THE CURRENT YEAR'S LOSSES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN MANUFACTURING AND SALE OF MEDICINE. AS PER AUDIT ED BALANCE SHEET AND P&L ACCOUNT REVEALED THAT THE GROSS TURNOVER DURING THE YEAR WAS AT RS.5,89,58,254/- WHICH INCLUDES MISCELLANEOUS INCOM E AT RS.15,97,112/- AS AGAINST LAST YEAR AT RS.76,73,820/- THE COMPUTATION OF INCOME FILED BY THE ASSESSEE SHOWS THAT THE ASSESSEE ITSELF HAS MADE CE RTAIN DISALLOWANCE IN ITS COMPUTATION OF TOTAL INCOME ON THE BASIS OF AUDIT R EPORT. 4. THE ASSESSEE BEING AGGRIEVED HAD PREFERRED AN AP PEAL TO THE LD. CIT(A). AS NOTICED, THE FIRST APPELLATE AUTHORITY U PHOLDING THE DISALLOWANCE OF RS.41,14,573/- BEING EMPLOYEES CONTRIBUTION TO P ROVIDENT FUND AND ESI. 5. LD. CIT(A) WHILE CONFIRMING THE ACTION OF THE AS SESSING OFFICER OBSERVED AS UNDER: AFTER CONSIDERING SUBMISSIONS AND THE DECISIONS ST ATED ABOVE, I FIND THAT EPF AND ESIC PAYMENTS WERE MADE AFTER DUE DATES UNDER THE RESPECTIVE ACTS, WHICH IS AGAINST THE MAN DATORY REQUIREMENT OF SECTION 36(1)(VA) OF THE INCOME TAX ACT AND HAVING FAILED TO MEET THE STIPULATION THESE RECEIPT S ARE TO BE TREATED AS INCOME U/S 2(24)(X) OF THE IT ACT, 1964. ACCORDINGLY BOTH DISALLOWANCES OF EPF AND ESIC CONTRIBUTIONS FR OM EMPLOYEES ARE CONFIRMED. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E TRIBUNAL WITH THE SUBMISSION THAT THE MAIN GROUND IN THIS APPEAL PER TAINS TO DISALLOWANCE OF RS.41,14,573/- BEING THE EMPLOYEES CONTRIBUTION TOW ARDS PF AND ESI RECEIVED BY THE ASSESSEE. LD. AR OF THE ASSESSEE FU RTHER STATED THAT AS PER SECTION 2(24(X) ANY SUM RECEIVED BY THE ASSESSEE FR OM HIS EMPLOYEES AS CONTRIBUTION TO ANY PF IS TREATED AS ASSESSEES INC OME AND IT IS ALLOWED AS DEDUCTION AND ON COMPLIANCE OF SECTION 36(VA) R.W.S . 43B IS ALLOWED AS DEDUCTION. LD. AR OF THE ASSESSEE ALSO SUBMITTED TH AT THE ASSESSEE HAS NOT 3 PAID SALARY FOR MONTHS OF APRIL, MAY, JUNE AND JULY , 2010 AND JANUARY, FEBRUARY AND MARCH, 2010 TO WHICH THE AMOUNT OF RS. 41,14,573/- PERTAINS. SINCE THE AMOUNT HAS NOT BEEN RECEIVED AS PER THE C ONDITION OF SECTION 2(24)(X) HENCE THE QUESTION OF ITS DISALLOWANCE DO ES NOT ARISE. IT WAS NOTICED THAT WHEN LD. CIT(A) WAS ASKED TO LD. AR OF THE ASSESSEE TO FILE AN AFFIDAVIT FROM THE MANAGING DIRECTOR OF ASSESSEE ST ATING THAT SALARY REMAINED UNPAID AND AMOUNT OF EPF WAS NOT COLLECTED , BUT HIS REPRESENTATIVE HAS SHOWN INABILITY TO PRODUCE ANY S UCH AFFIDAVIT. WE FURTHER NOTICED THAT NO MATERIAL FACTS ON THE RECORD TO EST ABLISH THAT EPF WAS NOT COLLECTED AND WITHOUT ANY CONCRETE EVIDENCE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE NOTED THAT ASSESSEE HAS NOT DEPOSITED THE PF AND ESI WITH THE REGIONAL PROVIDENT FUND OFFICE. AS PER THE SECT ION 43B, THE ASSESSEE AS AN EMPLOYER IS REQUIRED TO DEPOSIT THE PF, OR ESI O F ANY EMPLOYEE WITH THE CONCERNED AUTHORITIES BEFORE THE DUE DATE OF FILING OF THE RETURN. ADMITTEDLY, THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS O F SECTION 43B, THEREFORE, IN OUR OPINION, THE DISALLOWANCE WAS RIGHTLY SUSTAI NED BY THE CIT(A). HIS ORDER IS UPHELD AND THE ASSESSEES APPEAL IS REJECT ED. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- SD/- (P.K. BANSAL) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27/06/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR