ASSISTANT COMMISSIONER OF INCOME TAX, ALWAR V. M/S SHRI BALAJI BUILDERS, ALWAR

ITA 378/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7462 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Non-deduction of tax; TDS; Set aside
• Section: 43B; 40A(3); 143(3); 133A; 133(6); 68; 28; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 378/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 A.C.I.T., CIRCLE-2, ALWAR. C UKE VS. M/S SHRI BALAJI BUILDERS, 1/43, RHB COLONY, BHIWADI, DISTT. ALWAR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO. ABHFS 5311 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY: SMT. NEENA JEPH, (JCIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/07/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/07/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD.CIT(A), ALWAR DATED 01/01/2018 FOR THE A.Y. 2013-14 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE REVENUE: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 51,59,657/- MADE BY AO ON ACCOUNT OF NET PROFIT TAKEN FOR THE YEAR @ 5.50% IN PLACE OF @ 4.65% DECLARED BY THE ASSESSEE ON THE GROSS RECEIPTS, WITHOUT APPRECIATING THE MATERIAL FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 13,43,969/- MADE BY AO ON ACCOUNT OF LATE PAYMENT OF EMPLOYEE'S CONTRIBUTION TOWARDS ESI AND PF. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 10,96,237/- MADE BY AO ON ACCOUNT OF SUNDRY CREDITORS U/S 68 OF THE IT ACT 1961. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 2 THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORK. DURING THE YEAR UNDER CONSIDERATION, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 28/8/2012. DURING THE SURVEY OPERATION, STATEMENT OF SHRI VIJAY BANSAL, ONE OF THE PARTNER OF THE ASSESSEE FIRM WAS RECORDED ON 28/08/2012. IN THE STATEMENT SO RECORDED, IN ANSWER TO QUESTION NO. 19, IT WAS REPLIED THAT NET PROFIT FOR THE CURRENT YEAR WOULD BE DECLARED @ 5.50% ON THE RECEIPTS. IN THE ASSESSMENT ORDER, THE A.O. OBSERVED THAT THE ASSESSEE HAS NOT DECLARED NP AS PER THE N.P RATE OF 5.50% AS DECLARED DURING THE COURSE OF SURVEY BUT HAS DECLARED N.P. @ 4.65% OF TURNOVER. ACCORDINGLY, THE DIFFERENCE OF RS. 51,59,657/- WAS ADDED IN THE ASSESSEES INCOME. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS DELETED THE ADDITION AFTER OBSERVING AS UNDER: 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED; 1. THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF DOING JOB WORK FOR BUILDING PROJECTS. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 3 2. THAT THE APPELLANT HAD FILED REGULAR RETURN FOR THE PERIOD UNDER CONSIDERATION ON 28/09/2013 DECLARING AN INCOME OF RS.2,83,88,458/-. 3. THAT THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 23/12/2015 ASSESSING THE INCOME AT RS.3,60,26,290/-. 4. THAT DURING THE YEAR UNDER CONSIDERATION, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE APPELLANT ON 28/08/2012. 5. THAT THE APPELLANT HAD STATED IN THE STATEMENT RECORDED DURING SURVEY OPERATION THAT HE WILL DECLARE THE NET PROFIT AT THE RATE OF 5.5%. HOWEVER, IN THE RETURN OF INCOME FILED FOR THE RELEVANT YEAR, IT HAS DECLARED NET PROFIT AT THE RATE OF 4.65%. 6. THAT THE A.O HAS TAKEN THE NET PROFIT AT THE RATE OF 5.5% ON THE BASIS OF THE STATEMENT RECORDED DURING THE SURVEY OPERATION THEREBY MAKING ADDITION OF RS.51,59,657/-. 7. THAT THE APPELLANT HAS SUBMITTED THAT THE BOOKS OF ACCOUNTS FOR THE RELEVANT PERIOD WAS AUDITED U/S 44AB AND THE ENTIRE SET OF BOOKS OF ACCOUNTS ALONG WITH RELEVANT BILLS/VOUCHES WERE PRODUCED AND NO DISCREPANCY WAS NOTICED BY THE A.O. 8. THAT THE ADDITION MERELY ON THE BASIS OF THE STATEMENT RECORDED DURING SURVEY OPERATION IS A NOT A VALID REASON UNLESS THE STATEMENT IS BACKED BY ANY MATERIAL FOUND OR IMPOUNDED DURING THE SURVEY OPERATION. ALSO CITED A NUMBER OF COURT RULINGS IN FAVOUR OF ITS SUBMISSION. 5.4 I HAVE CONSIDERED THE ABOVE-MENTIONED FACTS OF THE CASE. THE TRADING ADDITION HAS BEEN MADE ON THE BASIS OF THE STATEMENT BY THE PARTNER. HOWEVER, THE A.O HAS NOT MENTIONED WHETHER ANY INCRIMINATING DOCUMENTS HAVE BEEN FOUND OR IMPOUNDED DURING THE SURVEY OPERATION OR ON WHAT GROUND THE PARTNER HAS MADE THE STATEMENT TO DECLARE THE NET PROFIT AT THE RATE OF 5.5%. THE STATEMENT WITHOUT ANY SUBSTANCE OR EVIDENCES IS NO EVIDENTIARY VALUE. THE STATEMENT RECORDED DURING SURVEY U/S 133A OF THE ACT IS NOT A STATEMENT ON OATH. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 4 THE A.O HAS MERELY RELIED UPON THE STATEMENT OF THE APPELLANT RECORDED DURING THE SURVEY OPERATION WITHOUT APPRECIATING THE BOOKS OF ACCOUNTS AND BILLS/VOUCHERS PRODUCED DURING THE ASSESSMENT PROCEEDINGS. MERELY GOING BY THE STATEMENT RECORDED DURING SURVEY PROCEEDING IS NOT ENOUGH PARTICULARLY WHEN THE STATEMENT RECORDED DURING THE SURVEY U/S 133A OF THE ACT HAS LITTLE EVIDENTIARY VALUE AS IT IS NOT RECORDED UNDER OATH. THEREFORE, THE STATEMENT RECORDED DURING SURVEY PROCEEDING HAS TO BE CORROBORATED WITH THE EVIDENCES COLLECTED DURING SURVEY OPERATION AND EVIDENCES PRODUCED DURING THE ASSESSMENT PROCEEDING. IN THIS REGARD, IT IS IMPORTANT TO RELY ON VARIOUS JUDGMENTS. THE GIST OF SOME OF THE LAND MARK JUDGMENT ON THE ISSUE IS AS UNDER; 1. THE APEX COURT IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD VS STATE OF KERALA AND OTHERS (1973) 91 ITR 18 (SC) HAS HELD THAT AN ADMISSION IS AN EXTREMELY IMPORTANCE PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. 2. ALLAHABAD HIGH COURT IN THE CASE OF ABDUL QAUYME VS CIT (1990) 184ITR 404(A11.) HAS HELD THAT AN ADMISSION OR AN ACQUIESCENCE CANNOT BE THE FOUNDATION FOR AN ASSESSMENT, WHERE THE INCOME IS RETURNED UNDER AN ERRONEOUS IMPRESSION OR MISCONCEPTION OF LAW. IT IS ALWAYS OPEN TO AN ASSESSEE TO DEMONSTRATE AND SATISFY TO AUTHORITY CONCERN THAT A PARTICULAR INCOME WAS NOT TAXABLE IN HIS HANDS AND THAT IT WAS RETURNED UNDER ERRONEOUS IMPRESSION OF LAW. 3. KERALA HIGH COURT IN THE CASE OF PAUL MATHEWS AND SONS V/S CIT 263 ITR 101 HAS OBSERVED THAT STATEMENT RECORDED U/S 133A OF THE IT ACT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REASON THAT THE OFFICER IS NOT AUTHORIZED TO ADMINISTER OATH AND ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 5 TAKEN ANY SWORN STATEMENT WHICH ALONE HAS THE EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW. THEREFORE, THE STATEMENT RECORDED DURING SURVEY OPERATION HAS NO EVIDENTIARY VALUE IN THE ABSENCE OF MATERIAL. 4. I HAVE FURTHER TAKEN INTO ACCOUNT CBDT'S INSTRUCTION ON THE ISSUE WHICH IS REPRODUCED AS UNDER; THE CBDT VIDE INSTRUCTION DT. 10 TH MARCH, 2003, HAS INSTRUCTED THE SUBORDINATE OFFICERS TO FOCUS AND CONCENTRATE ON COLLECTING EVIDENCE OF INCOME WHICH IS NOT DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED RATHER THAN RECORD AN UNSUBSTANTIATED STATEMENT. THE INSTRUCTION IS REPRODUCED HEREUNDER- F. NO. 286/2/2003-IT (INV) GOVERNMENT OF INDIA MINISTRY OF FINANCE & COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 254/NORTH BLOCK, NEW DELHI, THE 10TH MARCH, 2003 TO ALL CHIEF COMMISSIONERS OF INCOME TAX, (CADRE CONTRA) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR SUBJECT : CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION -REGARDING INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 6 FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDINGS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS YOURS FAITHFULLY, SD/- (S. R. MAHAPATRA] UNDER SECRETARY (INV. II) 5. I HAVE ALSO TAKEN INTO CONSIDERATION JURISDICTIONAL ITAT'S JUDGMENT ON THE ISSUE WHERE THE HON'BLE ITAT, JAIPUR IN ITA NO. 330/JP/2004 IN THE CASE OF ITO VS SHRI KHUSHAL CHAND GUPTA AND IN ITA NO. 359/JP/2005 IN THE CASE OF ACIT VS SHRI NIRANJAN LAL GUPTA DISMISSED THE DEPARTMENTAL APPEALS. IN BOTH THESE CASES, ADDITIONS WERE MADE BY THE A.0 ON THE BASIS OF STATEMENTS RECORDED DURING SURVEY U/S 133A AND ON THE BASIS OF THE ABOVE MENTIONED CBDT INSTRUCTION, THE ITAT HELD THAT WITHOUT ANY MATERIAL AND EVIDENCES, ADDITION CANNOT BE MADE ON THE BASIS OF STATEMENTS RECORDED DURING SURVEY. 4. DURING THE COURSE OF ASSESSMENT, THE A.O. HAS ALSO MADE ADDITION OF RS. 13,43,969/- ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS ESI AND PF WHICH WAS DELETED BY THE LD. CIT(A) AFTER OBSERVING AS UNDER: 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT THE MOOT POINT IN THE CASE IS THAT WHETHER THE AMOUNT COLLECTED AS EMPLOYEES CONTRIBUTION BY THE ASSESSEE IS COVERED UNDER SECTION 43B OR NOT? IN THIS REGARD, IT WOULD BE PERTINENT TO REPRODUCE RELEVANT PART OF THE SECTION 43B OF THE ACT. THE RELEVANT PART READ AS UNDER; 43B. NOT WITH STANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 7 [(A) ANY SUM PAYABLE20 BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BEING IN FORCE, OR (B) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, [OR] [(C)ANY SUM REFERRED TO IN CLAUSE (II) OF SUB- SECTION (I) OF SECTION 36] [OR] [(D) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY LOAN. OR BORROWING FROM ANY PUBLIC FINANCIAL INSTITUTION [OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION], IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN OR BORROWING [OR] [(E) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY 29[LOAN OR ADVANCES] FROM A SCHEDULED BANK IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN [OR ADVANCES],] [OR] [(F) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER IN LIEU OF ANY LEAVE AT THE CREDIT OF HIS EMPLOYEE,] SHALL BE ALLOWED (IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED. BY THE ASSESSEE ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM) ONLY IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUALLY PAID BY HIM: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO ANY SUM [***] WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN. THUS THE SCOPE OF THE SECTION IS AS UNDER; ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 8 A. SCOPE OF SECTION 43B UNDER THE INCOME TAX ACT 1961 (`THE ACT') A) SECTION 43B PROVIDES THAT CERTAIN EXPENDITURE/ PAYMENTS WHICH ARE OTHERWISE ELIGIBLE FOR DEDUCTION UNDER THE ACT SHALL BE ALLOWED AS A DEDUCTION ONLY IN THE YEAR OF ACTUAL PAYMENT IRRESPECTIVE OF THE YEAR OF ACCRUAL OF SUCH EXPENDITURE. B) HOWEVER, THE SECTION SHALL NOT APPLY TO ANY SUM WHICH IS PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME AS STIPULATED UNDER SECTION 139(1) OF THE ACT. C) IF THE LIABILITY TO PAY THE SPECIFIED SUM PRE-EXISTED ON THE FIRST DAY OF THE PREVIOUS YEAR, (I.E. OUTSTANDING LIABILITIES) DEDUCTION WILL BE ALLOWED ONLY IF THE PAYMENT IS MADE ON OR BEFORE THE END OF THE PREVIOUS YEAR. D) IN OTHER WORDS, THE DUE DATE FOR FILING THE RETURN DEADLINE APPLIES TO THE SUMS FOR WHICH THE LIABILITY WAS INCURRED DURING THE PREVIOUS YEAR AND NOT TO PRE-EXISTING LIABILITIES. NATURE OF EXPENSES COVERED UNDER SECTION 43B A) ANY TAX, DUTY, CESS OR FEE UNDER ANY LAW; B) CONTRIBUTION MADE BY EMPLOYER TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES; C) BONUS OR COMMISSION TO EMPLOYEES; D) INTEREST ON ANY LOAN OR BORROWING FROM ANY PUBLIC FINANCIAL INSTITUTION OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION; E) INTEREST ON ANY LOAN OR ADVANCES FROM A SCHEDULED BANK; ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 9 F) SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF LEAVE ENCASHMENT. PLAIN READING OF THE SECTION GIVES AN UNDERSTANDING THAT ONLY EMPLOYER'S CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES IS COVERED UNDER SECTION 43B OF THE ACT. HOWEVER, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS AIMIL 321 ITR 508(DEL) HAS MADE A DETAILED DISCUSSION AND ALSO DISCUSSED HON'BLE SUPREME COURT RULINGS IN THE CASE OF VINAY CEMENTS. HON'BLE COURT HAS MADE FOLLOWING OBSERVATION; (III) IF THE EMPLOYEES CONTRIBUTION IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER THE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER NOT ONLY PAYS INTEREST ON DELAYED PAYMENT BUT CAN INCUR PENALTIES ALSO, FOR WHICH SPECIFIC PROVISIONS ARE MADE IN PROVIDENT FUND ACT AS WELL AS THE ESI ACT. THEREFORE, THE ACT PERMITS THE EMPLOYER TO MAKE THE DEPOSIT WITH SOME DELAYS SUBJECT TO THE AFORESAID CONSEQUENCES. INSOFAR AS THE INCOME TAX ACT IS CONCERNED THE ASSESSEE CAN GET THE BENEFIT IF THE ACTUAL PAYMENT IS MADE BEFORE THE RETURN IS FILED AS PER THE PRINCIPAL LAID DOWN IN VINAV CEMENT CASE.' THE SAME STAND IS TAKEN BY THE JURISDICTIONAL RAJASTHAN HIGH COURT IN THE FOLLOWING CASES; RAJASTHAN HIGH COURT IN CASE OF COMMISSIONER OF INCOME-TAX V. STATE BANK OF BIKANER & JAIPUR 12014] 43 TAXMANN.COM 411 (RAJASTHAN) HELD THAT 'WHERE PF AND/OR EPF, CPF, GPF, ETC.. WAS PAID AFTER DUE DATE UNDER RESPECTIVE ACTS BUT BEFORE FILING OF RETURN OF INCOME UNDER SECTION 139(1), IT COULD NOT BE DISALLOWED UNDER SECTION 43B OR UNDER SECTION 36(1) (VA)'. HIGH COURT OF RAJASTHAN IN CASE OF COMMISSIONER OF INCOME-TAX V. JAIPUR VIDYUT VITRAN NIGAM LTD [2014] 49 TAXMANN.COM 540 (RAJASTHAN) DECIDED THAT 'WHETHER AMOUNT CLAIMED ON PAYMENT OF PF AND E,S7 COULD NOT BE PAID ON OR BEFORE DUE DATE UNDER RELEVANT ACTS BUT SAME WAS DEPOSITED ON OR BEFORE DUE DATE OF FILING OF RETURNS UNDER SECTION 139 OF INCOME-TAX ACT, SAME COULD NOT BE DISALLOWED UNDER SECTION 43B OR UNDER SECTION 36(1) (VA) - HELD, YES'. IN VIEW OF THE ABOVE JUDGMENT THE AMOUNT OF RS. 13,43,969/- ADDED ON ACCOUNT OF DELAYED PAYMENT U/S 36(1)(VA) OF THE ACT IS DELETED AS THE ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 10 SAME HAS BEEN CREDITED TO THE GOVT. ACCOUNT BEFORE THE DUE DATE OF FILING OF RETURN U/S 139 OF THE ACT. ACCORDINGLY, THE APPELLANT'S GROUND OF APPEAL ON THIS ISSUE IS ALLOWED. 5. THE A.O. HAS ALSO MADE ADDITION OF RS.10,96,237/- ON THE BASIS OF MISMATCH OF STATEMENT OF CREDITORS, WHICH WAS DELETED BY THE LD. CIT(A) AFTER OBSERVING AS UNDER: 7.4 I HAVE CONSIDERED THE ABOVE MENTIONED FACTS. THERE IS NO DOUBT THAT THE AMOUNT IN QUESTION STANDING IN THE SUNDRY CREDITOR LIST BELONGS TO THE PRECEDING YEARS AND NOT THE YEAR UNDER CONSIDERATION. THERE IS ALSO NO DOUBT ABOUT THE FACT THAT SUCH AMOUNTS CORRESPONDS TO BUSINESS DEALING, THE APPELLANT HAD WITH M/S PURULIA METAL CASTING PVT. LTD. DURING PAST YEARS AND THAT THERE IS NO ISSUE OF GENUINENESS OF BUSINESS TRANSACTION INVOLVED. NOW, THE ONLY ISSUE LEFT IS WHETHER THE PAYMENT AGAINST THE OUTSTANDING BALANCE HAS BEEN MADE OR NOT. THE CASH BOOK OF THE APPELLANT REVEALS THAT THE PAYMENTS HAVE BEEN MADE BUT THE CREDITORS ACCOUNT IS STILL SHOWING OUTSTANDING BALANCES. IN THIS REGARD, ANY, MEANINGFUL ADDITIONS COULD HAVE BEEN MADE UNDER SECTION 41 OF THE ACT FOR CESSATION OF LIABILITY BUT THAT SITUATION HAS NOT ARISEN AS YET BECAUSE THERE IS AN ISSUE RECONCILIATION OF PAYMENTS INVOLVED AGAINST THE OUTSTANDING BALANCE. IN THIS SCENARIO, THE ADDITION ON ACCOUNT OF CESSATION OF LIABILITIES CAN ARISE ONLY IN FUTURE. ACCORDINGLY, THE ADDITION OF RS.10,96,237/- IS NOT JUSTIFIED FOR THE YEAR UNDER CONSIDERATION, HENCE DELETED. ACCORDINGLY, THE GROUND OF APPEAL ON THIS ISSUE IS PARTLY ALLOWED, LEAVING THE SCOPE FOR INVOCATION OF SECTION 41OF THE ACT IN SUBSEQUENT YEARS AS AND WHEN SUCH A SITUATION ARISES. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 11 6. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE THE ITAT. 7. IT WAS VEHEMENTLY ARGUED BY THE LD DR THAT DURING THE COURSE OF SURVEY, STATEMENT OF ASSESSEE WAS RECORDED WHEREIN THE ASSESSEE HAS CONCEDED THAT THE BILLS RELATING TO PURCHASES OF WATER TANK AND OTHER EXPENDITURE WERE NOT AVAILABLE, THEREFORE, HE AGREED TO OFFER INCOME FOR THE A.Y. 2011-12 @ 4.06% RESULTING INTO ADDITIONAL INCOME OF RS. 75,94,348/-. SIMILARLY AS PER THE LD DR, FOR THE A.Y. 2012-13, THE ASSESSEE HAS AGREED FOR NON-MAINTENANCE OF BILLS AND VOUCHERS FOR EXPENSES AND FOR NON-DEDUCTION OF TAX AT SOURCE U/S 40A(3) OF THE ACT AND THEREBY AGREED TO OFFER PROFIT AT 5.5% RESULTING INTO ADDITIONAL INCOME OF RS. 30,61,364/-. AS PER THE LD DR, THE ASSESSEE HAS DULY OFFERED ADDITIONAL INCOME AS FOUND DURING THE COURSE OF SURVEY FOR THE A.Y. 2011-12 AND 2012-13 BUT NO ADDITIONAL INCOME WAS DECLARED FOR THE YEAR UNDER CONSIDERATION IN SPITE OF THE FACT THAT THE SIMILAR DEFICIENCY WAS FOUND IN THE A.Y. 2013-14 UNDER CONSIDERATION ON WHICH THE ASSESSEE AGREED TO OFFER PROFIT @ 5.5.% DURING THE COURSE OF SURVEY. OUR ATTENTION WAS ALSO INVITED BY THE LD DR TO THE QUESTION NOS. 18 & 19 AND THEIR ANSWERS AS RECORDED DURING THE COURSE OF SURVEY WHEREIN THE ASSESSEE AGREED TO APPLY NP @ 5.5% OF THE GROSS RECEIPTS AND OFFER NET PROFIT OF RS. 72,64,165/- UP TILL 28/8/2012 I.E. THE DATE OF SURVEY. ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 12 8. IN VIEW OF THE ABOVE, SHE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION SO MADE MERELY BY OBSERVING THAT THE STATEMENT SO RECORDED DURING THE COURSE OF SURVEY IS WITHOUT ANY SUBSTANCE OR EVIDENCE IS HAVING NO EVIDENTIARY VALUE AND THAT STATEMENT RECORDED DURING THE SURVEY U/S 133A IS NOT A STATEMENT ON OATH. SHE FURTHER CONTENDED THAT THE LD. CIT(A) HAS BRUSHED ASIDE THE CLEAR DECLARATION MADE BY THE ASSESSEE IN TERMS OF DEFICIENCY FOUND IN THE BOOKS OF ACCOUNT WHICH WAS EVEN NOT COMPLETE ON THE DATE OF SURVEY. 9. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE SUBMITTED THAT IN TERMS OF VARIOUS JUDICIAL PRONOUNCEMENTS MERELY THE STATEMENT RECORDED DURING THE COURSE OF SURVEY CANNOT BE MADE A BASIS FOR ADDITION IN SO FAR AS THESE STATEMENTS ARE NOT RECORDED ON OATH. THE LD AR ALSO INVITED OUR ATTENTION TO THE QUESTION NO. 18 ASKED DURING THE COURSE OF SURVEY WHEREIN ONLY DEFAULT OF PAYMENT EXCEEDING RS. 20,000/- WAS ACCEPTED BY THE ASSESSEE AND THAT SALES OF ONLY RS. 13.20 CRORES WERE RECORDED UP TILL 28/08/2012 ON WHICH THE ASSESSEE HAS PROPERLY DECLARED THE INCOME. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO GONE THROUGH THE STATEMENT RECORDED BY THE SURVEY TEAM DURING THE COURSE OF SURVEY ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 13 AND ALSO THE DEFICIENCIES FOUND IN TERMS OF QUESTIONS AND ANSWERS GIVEN BY THE ASSESSEE. WE FOUND THAT THE VARIOUS DEFICIENCIES WERE POINTED OUT BY THE SURVEY OFFICER FOR THE A.Y. 2011-12, 2012-13 AND 2013-14. THE ASSESSEE HAS ALSO AGREED TO OFFER ADDITIONAL INCOME AND TAX THEREON IN RESPECT OF ALL THE THREE YEARS. FOR THE A.Y. 2011-12 AND 2012-13, THE ASSESSEE HAS DULY OFFERED ADDITIONAL INCOME AS AGREED DURING THE COURSE OF SURVEY. HOWEVER, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2013-14, THE ASSESSEE HAS AGREED TO OFFER NP RATE AT 5.5% IN RESPECT OF DEFICIENCY ACCEPTED BY HIM WITH REGARD TO PAYMENTS EXCEEDING RS. 20,000/- MADE IN CASH IN CONTRAVENTION OF SECTION 40A(3) OF THE ACT. THE SURVEY OFFICER HAS ALSO SHOWN ANNEXURES 1 TO 8 FOUND DURING THE COURSE OF SURVEY WHICH WAS NOT FOUND TO BE RECORDED IN THE REGULAR BOOKS OF ACCOUNT. VARIOUS PAYMENTS TO THE SUB- CONTRACTORS WAS FOUND ON WHICH NO TDS WAS DEDUCTED AT SOURCE. BY ACCEPTING THESE DEFICIENCIES, THE ASSESSEE HAS AGREED TO OFFER PROFIT @ 5.5% OF THE SALES UP TO 28/08/2012 WHICH WAS RS. 13,20,75,737/-. THUS, THE PROFIT OF RS. 72,64,165/- WAS OFFERED DURING THE SURVEY ON WHICH THE ASSESSEE AGREED TO PAY TAX. HOWEVER, IN THE RETURN FILED AFTER SURVEY FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT OFFERED INCOME @ 5.5.% BUT THE INCOME WAS OFFERED @ 4.65%. ACCORDINGLY, THE A.O. MADE ADDITION BY APPLYING NP RATE OF 5.5.% AGREED BY THE ASSESSEE IN VIEW OF INCRIMINATING DOCUMENTS FOUND DURING SURVEY ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 14 INDICATING PAYMENT OF MORE THAN RS. 20,000/- IN CASH, NON DEDUCTION OF TDS ON PAYMENT MADE TO CONTRACTORS AND OTHER VARIOUS DEFICIENCIES POINTED OUT DURING THE COURSE OF SURVEY. HOWEVER, WHILE DELETING THE ADDITION, THE LD. CIT(A) HAS BRUSHED ASIDE THE FINDINGS OF SURVEY TEAM WITH REGARD TO THESE DEFICIENCIES AND DELETED THE ADDITION MERELY BY STATING THAT THE STATEMENT WAS NOT RECORDED ON OATH AND NO CORROBORATIVE MATERIAL WAS FOUND TO SUPPORT THE ADDITION. WE FOUND THAT THE CORROBORATIVE EVIDENCE WAS IN THE FORM OF DEFICIENCIES FOUND AND POINTED OUT BY THE SURVEY TEAM DURING THE COURSE OF SURVEY WHICH WAS AGREED BY THE ASSESSEE AND FOR WHICH THE ASSESSEE ALSO AGREED TO DECLARE INCOME @ 5.5% OF GROSS RECEIPTS. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION IN THE ADDITION SO DELETED BY THE LD. CIT(A) WITHOUT CONTROVERTING THE FINDINGS OF SURVEY TEAM WHICH WAS DULY ACCEPTED BY THE ASSESSEE. IT IS ALSO MATTER OF RECORD THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAS NOT REJECTED BOOKS OF ACCOUNT, THEREFORE, IN ALL FAIRNESS, WE ARE OF THE VIEW THAT ON THE SALES UP TO THE DATE OF SURVEY, THE PROFIT SHOULD BE 5.5.% AND FOR THE SALE AFTER THE DATE OF SURVEY, THE PROFIT DECLARED BY THE ASSESSEE AT 4.65% SHOULD BE ACCEPTED. WE DIRECT ACCORDINGLY. 11. WITH REGARD TO ADDITION MADE BY THE A.O. ON ACCOUNT OF MISMATCH OF THE CREDITORS, THE LD DR HAS ARGUED THAT THE NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO THE CREDITORS AND IT WAS FOUND THAT AS ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 15 PER THE CONFIRMATION FILED BY M/S PURULIA METAL CASTING PVT. LTD., THE DIFFERENCE OF RS. 11,62,831/- WAS FOUND BUT THE SAME COULD NOT BE RECONCILED BY THE ASSESSEE EVEN AFTER GIVING VARIOUS OPPORTUNITIES BY THE A.O. SHE FURTHER CONTENDED THAT THE LD. CIT(A) HAS ALSO NOT CALLED FOR ANY REMAND REPORT AND MERELY ON THE PLEA THAT IT WAS AN OLD BALANCE, THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION. IT WAS ARGUED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A.O. FOR DECIDING THE ISSUE AFRESH AFTER CALLING FOR A CONFIRMATION AND RECONCILIATION FROM THE CREDITOR AND ASSESSEE BOTH. 12. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THERE WAS NO TRANSACTION WITH THE CREDITOR FIRM DURING THE YEAR UNDER CONSIDERATION AND THERE IS NO VARIATION IN THE AMOUNT DURING THE YEAR UNDER CONSIDERATION AND WHATEVER BALANCE WAS CARRIED OUT FROM EARLIER YEAR REMAINS THE SAME AT THE END OF THE YEAR, THEREFORE, THE A.O. WAS NOT JUSTIFIED IN MAKING ANY ADDITION U/S 68 OF THE ACT. 13. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT THE LD. CIT(A) HAS DELETED THE ADDITION WITHOUT CONTROVERTING THE FINDINGS OF THE A.O. TO THE EFFECT THAT THE ASSESSEE WAS UNABLE TO RECONCILE THE BALANCE IN THE CREDITORS ACCOUNT, WHICH WAS DIRECTLY CALLED FOR THE A.O. FROM THE CREDITORS. WE ALSO OBSERVE THAT NEITHER THE LD. CIT(A) HAS CALLED ANY COMMENTS FROM THE A.O. NOR ANY REMAND REPORT WAS SOUGHT ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 16 IN RESPECT OF MISMATCH OF ACCOUNT AND MERELY BY OBSERVING THAT THERE WAS NO TRANSACTION DURING THE YEAR HE HAS DELETED THE ADDITION. IN ALL FAIRNESS, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE A.O. FOR DECIDING AFRESH AFTER CALLING A RECONCILIATION FROM THE ASSESSEE AND ALSO CONFIRMATION FROM THE CREDITORS. WE DIRECT ACCORDINGLY. 14. WITH REGARD TO ADDITION MADE ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION AMOUNTING TO RS. 13,43,969/-, WE FOUND THAT THE SAME WAS PAID BY THE ASSESSEE BEFORE LAST DATE OF FILING OF RETURN U/S 139 OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE DISALLOWANCE IN TERMS OF FINDINGS RECORDED BY HIM IN PARA 6.3 OF HIS APPELLATE ORDER. 15. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKA D@ DATED:- 24 TH JULY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE A.C.I.T.,CIRCLE-2, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- M/S SHRI BALAJI BUILDERS, ALWAR. 3. VK;DJ VK;QDR @ CIT ITA NO. 378/JP/18 ACIT VS M/S SHRI BALAJI BUILDERS 17 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 378/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR