ACIT, Cir.-2, Nashik V. Ashoka Buildcon Ltd., Nashik

ITA 378/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56469 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: SUNIL PATHAK
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 378/PN/2010 : A.Y. 2006-07 ASSTT. CIT CIR. 2, NASIK APPELLANT VS. ASHOKA BUILDCON LTD., ASHOKA HOUSE, ASHOKA MARG SURVEY NO. 861, WADALA, NASIK PAN AABCA 9292 J RESPONDENT APPELLANT BY: SHRI HARESHWAR SHARMA RESPONDENT BY: SHRI SUNIL PATHAK AND SHRI NIKHIL PATHAK DATE OF HEARING: 28-9-2011 DATE OF PRONOUNCEMENT: 30-9-2011 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDERS OF THE CIT(A)-II NASIK DATED 30-12-2009 ON T HE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN ALLOWING THE 1/5 TH OF THE STAMP DUTY EXPENSES, INCURRED IN RESPECT OF AMALGAMATION DONE IN F.Y. 2003-04, PAID LATE I.E. IN APRIL 2007. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN ALLOWING THE ADDITION MADE ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AFTER DUE DATE, IN CONTRAVENTION TO THE PROVISIONS OF SECTION 36(1)(VA) OF I.T. ACT, 1961. 2. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 35DD OF T HE ACT OF RS. 23,00,000/- BEING 1/5 TH OF THE STAMP DUTY 2 ITA NO. 378/PN/2010 ASHOKA BUILDCON A.Y. 2006-07 EXPENSES OF RS. 1.15 CRORES ON AMALGAMATION. IT WA S STATED BY THE ASSESSING OFFICER THAT THE SAID AMOUN T WAS NOT PAID IN A.Y. 2003-04 WHEN THE AMALGAMATION TOOK PLACE AND HENCE PROVISIONS OF SECTION 43B OF THE AC T WERE APPLICABLE. IT WAS STATED BY THE ASSESSING OFFICER THAT THE SAID CLAIM HAD NOT BEEN ALLOWED IN A.Y. 2004-05 AND 2005- 06 AND HENCE NOT ALLOWABLE IN A.Y. 2006-07. ON APPE AL, IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSING OF FICER WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM U/S 35DD OF 1/5 TH OF EXPENSES ON AMALGAMATION AS THE STAMP DUTY OF RS. 1,16,85,310/- WAS ACTUALLY PAID ON 26-4-2007 RE LEVANT TO A.Y. 2008-09 BY INVOKING THE PROVISIONS OF SECTI ON 43B OF THE ACT. IT WAS ALSO SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER WAS NOT JUSTIFIED AS THE DEDUCTIO N CLAIMED WAS IN THE NATURE OF AMORTIZATION OF SECTIO N 35DD, 1/5 TH OF EXPENSES ON AMALGAMATION ARE AUTOMATICALLY ALLOWABLE WITHOUT THE APPLICABILITY OF PROVISIONS O F SECTION 43B OF THE ACT. AFTER TAKING INTO CONSIDERATION THE SE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE, THE CIT (A) HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/ S 35DD. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE RE VENUE. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, THE REASONED FINDING GIVEN BY T HE CIT(A) NEEDS NO INTERFERENCE AT OUR HAND. IT IS SE EN THAT THE ASSESSING OFFICER HAS ACCEPTED THAT THE AMOUNT 3 ITA NO. 378/PN/2010 ASHOKA BUILDCON A.Y. 2006-07 CLAIMED WAS RELATING TO THE PROVISIONS U/S 35DD OF THE ACT BUT DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF SECTION 43B OF THE ACT ON ACTUAL PAYMENT BASIS. AS PER THE PROVISIONS OF SECTION 35DD THE DEDUCTION IS AVAILAB LE FOR FIVE SUCCESSIVE PREVIOUS YEARS BEGINNING WITH THE P REVIOUS YEAR IN WHICH THE AMALGAMATION OR DE-MERGER TOOK PL ACE. THE ASSESSEE CLAIMED THE EXPENDITURE FROM THE BEGIN NING WITH THE PREVIOUS YEAR 2004-05 AND 1/5 TH OF THE SAME IS CLAIMED DURING THE PERIOD UNDER CONSIDERATION. IN VIEW OF PROVISIONS OF SECTION 35DD THE ASSESSEE IS ENTITLED FOR DEDUCTION. FURTHER, THE EXPENDITURE IS NOT IN THE N ATURE OF EXPENDITURE PROVIDED IN THE PROVISIONS OF SECTION 4 3B OF THE ACT. THEREFORE, THE CIT(A) WAS JUSTIFIED IN DE LETING THE DISALLOWANCE IN QUESTION. WE UPHOLD THE SAME. 4. THE NEXT ISSUE IS WITH RESPECT TO ADDITION MADE ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AFTER DUE D ATE. AT THE VERY OUTSET, LEARNED COUNSEL FOR THE ASSESSEE M ENTIONED THAT THIS GROUND OF APPEAL IS SQUARELY COVERED IN F AVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE DELHI HIGH COUR T IN THE CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 508 ( DEL). FOLLOWING THE SAME, WE DECIDED THIS ISSUE AGAINST T HE REVENUE AND IN FAVOUR OF THE ASSESSEE. 4 ITA NO. 378/PN/2010 ASHOKA BUILDCON A.Y. 2006-07 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2011. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 30 TH SEPTEMBER 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- II NASIK 4. THE CIT II PUNE 5. THE D.R, A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL