The DCIT, Circle-1(1), Baroda V. M/s. Checkmate Services Pvt.Ltd., Baroda

ITA 371/AHD/2013

• Counselvise Citation: 37120514 RSA 2013
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: ANIL R SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T. R. MEENA, ACCOUNTANT MEMBER ITA NO. 371/AHD/2013 A.Y. 2009-10 THE DCIT, CIR-1(1), BARODA. VS CHECKMATE SERVICES P. LTD. GROUND FLOOR, AMAN TOWERS, FATEHGUNJ, BARODA - 390002 PAN: AAACC 8465A (APPELLANT) (RESPONDENT) CO NO. 105/AHD/2013 A.Y. 2009-10 CHECKMATE SERVICES P. LTD. GROUND FLOOR, AMAN TOWERS, FATEHGUNJ, BARODA - 390002 PAN: AAACC 8465A VS THE DCIT, CIR-1(1), BARODA. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.L. KUREEL, D.R. ASSESSEE(S) BY : SHRI ANIL R. SHAH, A.R. DATE OF HEARING : 26/09/ 2013 DATE OF PRONOUNCEMENT : 27/09/2013 O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM AN ORDER OF LEARNED CIT(A)-I, BARODA, DATED 26.11.2012. ITA NO.371/AHD/2013 & CO NO.105/AHD/2013 DCIT, BARODA VS. CHECKMATE SERVICES P. LTD. 2009-10 - 2 - 2. GROUND NO.1 IS REPRODUCED BELOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION U/S.36(1)(VA) OF RS. 3,14,12,313/- ON ACCOUNT OF DISALLOWANCE OF EMPLOYEES CONTRIBUTION TOWARDS PF A ND ESIC AND PROVISION FOR EMPLOYEES CONTRIBUTION TOWARDS PF AND ESIC OF RS.43,88,453/- PAID BEYOND DUE DATE, WITHOUT APPRECIATION THAT AS PER T HE PROVISIONS OF SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT; DEDUCTION IS ALLOWABLE OF THE SUM IF SUCH SUM WHICH HAS BEEN RECEIVED FROM ANY OF HIS EMPLOYE ES IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT F UND OR FUNDS ON OR BEFORE THE DUE DATE. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3), DATED 21.12.2011 WERE THAT THE A SSESSEE COMPANY IS IN THE BUSINESS OF PROVIDING SECURITY PERSONNEL. THE AO HAS REPRODUCED A DETAILED CHART IN RESPECT OF THE EMPLOYEES CONTRIB UTION TOWARDS PF AND ESIC. A MONTH-WISE AND DATE-WISE CHART OF EMPLOYEES CONTRIBUTION, DUE DATE AND THE ACTUAL DATE OF PAYMENT WAS REPRODUCED BY THE AO. HOWEVER, ACCORDING TO HIM, THE ASSESSEE HAD RECEIVE D A CONTRIBUTION OF RS.3,14,12,313/- TOWARDS PF AND ESIC FROM THE EMPLO YEES BUT FAILED TO DEPOSIT THE SAME ON DUE DATE AS PRESCRIBED. THE A SSESSEE HAS SUBMITTED FEW CASE LAWS FOR THE LEGAL PROPOSITION THAT THE PA YMENT WAS MADE AS PER THE AMENDED PROVISIONS OF THE ACT, HOWEVER, THE AO WAS NOT CONVINCED AND HELD THAT THE SAME WAS DISALLOWABLE U/S. 2(24)( X) R.W.S. 36(1)(VA) OF IT ACT. WHEN THE MATTER WAS CARRIED BEFORE THE LEAR NED CIT(A), HE HAS HELD THAT ON IDENTICAL FACTS PREDECESSOR FOR A.Y. 2 008-09 HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR BECAUSE THE PF AND ESIC CONTRIBUTION OF EMPLOYEES WAS DEPOSITED BEFORE THE DUE DATE OF THE FILING OF THE RETURN. SINCE, RELIEF HAS BEEN GRANTED. NOW THE REVENUE IS BEFORE US. ITA NO.371/AHD/2013 & CO NO.105/AHD/2013 DCIT, BARODA VS. CHECKMATE SERVICES P. LTD. 2009-10 - 3 - 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THERE IS NO FALLACY IN THE FINDINGS OF LEARNED CIT(A) BECAUSE NOW THIS ISSUE IS SQUARELY COVERED BY THE DECISIONS OF ALOM EXTRUSIONS, 319 ITR 306 (SC) AND P.M. ELECTRONICS, 313 ITR 161 (DEL) . IN THE RESULT, THIS GROUND OF THE REVENUE IS HEREBY DISMISSED. 5. GROUND NO.2 IS REPRODUCED BELOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.19,39,017/- BY HOLDING THAT SECTION 40(A)(IA) OF THE ACT CAN BE INVOKED ONLY TO DISALLO W EXPENDITURE OF THE NATURE WHICH IS SHOWN AS PAYABLE AS ON THE DATE OF THE B ALANCE SHEET AND IT CANNOT BE INVOKED IF AMOUNT IS NOT OUTSTANDING EVEN IF PAY MENT HAS BEEN PAID WITHOUT DEDUCTION OF TAX. 6. THE OBSERVATION OF THE AO WAS THAT ALTHOUGH THE ASSESSEE HAD MADE THE PAYMENT AND DEDUCTED THE TAX BUT THE SAME WAS NOT DEPOSITED WITHIN THE TIME ALLOWED U/S.200(1) OF IT ACT. THE A O HAS REPRODUCED A PARTY-WISE CHART MENTIONING THE DATE OF PAYMENT, IN VOICE AMOUNT, TDS AND THE DATE OF PAYMENT. IT WAS HELD THAT ACCORDING TO THE PROVISIONS OF SECTION 40(A)(IA), THE TAX WAS REQUIRED TO BE DEDUC TED AT SOURCE AT THE TIME OF MAKING OF THE PAYMENT AND TO BE PAID AS PER THE TIME PRESCRIBED U/S.200(1) OF IT ACT. HE HAS DISALLOWED A SUM OF RS .19,39,017/- ACCORDINGLY. WHEN THE MATTER WAS CARRIED BEFORE LEA RNED CIT(A), HE HAS FOLLOWED AN ORDER OF THE SPECIAL BENCH PRONOUNCED I N THE CASE OF MERLIYN SHIPPING AND DELETED THE ADDITION. HOWEVER, THE ISSUE NOW STOOD COVERED BY FEW ORDERS OF THE HONBLE HIGH COURT, WH EREIN IT IS HELD THAT IF THE PAYMENT IS MADE BEFORE THE DUE DATE OF FILIN G OF THE RETURN AND THE TDS DEDUCTED HAS DULY BEEN PAID WITHIN THAT PERIOD THEN THE SAME IS ALLOWABLE AS AN EXPENDITURE. IN VIEW OF THESE ORDER S, WE HEREBY HOLD THAT ALTHOUGH THE DECISION OF MERLIYN SHIPPING (SUPRA) W AS FOLLOWED BY ITA NO.371/AHD/2013 & CO NO.105/AHD/2013 DCIT, BARODA VS. CHECKMATE SERVICES P. LTD. 2009-10 - 4 - LEARNED CIT(A) IS NO MORE A GOOD LAW BUT OTHERWISE THE ISSUE NOW STOOD COVERED IN FAVOUR OF THE ASSESSEE AS PER THE CASE L AW CITED (SUPRA). THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. B. CO NO.105/AHD/2013 7. THE GROUNDS RAISED IN THE CO ARE NOTHING BUT SUP PORTING THE VIEW EXPRESSED BY LEARNED CIT(A); HENCE, IN THE LIGHT OF THE ABOVE DECISION TAKEN BY US THIS CO HAS BECOME REDUNDANT; HENCE DIS MISSED. 8. IN THE RESULT, THE REVENUES APPEAL AS WELL AS CO FILED BY THE ASSESSEE ARE DISMISSED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWA T) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/09/2013 PRABHAT KR. KESARWANI, SR.P.S. TRUE COPY COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A)-III, AHMEDABAD 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, (DY./ASSTT.REGISTRAR) ITAT, AHMEDABAD