DCIT, Ernakulam V. Peninsular Capital market Ltd, Cochin

ITA 406/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58346 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R SIVAKUMAR
• Assessee Lawyers: A S NARAYANANMURTHY
• Keywords: Depreciation; Set aside
• Section: 43B

Judgement Text

1 ITA NO.406/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 406/COCH/2010 (ASSESSMENT YEAR 2005-06) DY.C.I.T., CIR.2(1) VS M/S PENINSULAR CAPITAL M ARKET LTD ERNAKULAM S.T. REDDIAR & SONS BLDG VEEKSHANAM ROAD, KOCHI-35 PAN : AABCP6649J (APPELLANT) (RESPONDENT) C.O. NO.10/COCH/2010 (ARISING OUT OF I.T.A NO. 406/COCH/2010) (ASSESSMENT YEAR 2005-06) PENINSULAR CAPITAL MARKET LTD VS DY.C.I.T., CIR.2( 1) KOCHI ERNAKULAM (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI R. SIVAKUMAR RESPONDENT BY : SHRI A.S. NARAYANANMURTHY DATE OF HEARING : 08-03-2012 DATE OF PRONOUNCEMENT : 23-03-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI DATED 31-03-201 0 AND PERTAINS TO ASSESSMENT YEAR 2005-06. THE CROSS OBJECTION FILED BY THE ASSESSEE ALSO ARISES 2 ITA NO.406/COCH/2010 FROM THE SAME ORDER OF THE COMMISSIONER OF INCOME-TA X(A). THEREFORE, BOTH THE APPEAL AND THE CROSS OBJECTION WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO THE DEPRECIATION ON THE BSE MEMBERSHIP CARD. 3. WE HAVE HEARD, SHRI R SIVAKUMAR, THE LD.DR AND SH RI A.S. NARAYANAMURTHY, THE LD.REPRESENTATIVE FOR THE ASSESSEE. 4. ADMITTEDLY, THE COMMISSIONER OF INCOME-TAX(A) FOL LOWED THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03. THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED TH AT THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE WAS CONFIRMED BY THE HIGH COURT BY A JUDGMENT DATED 06- 12-2010 FOLLOWING THE JUDGMENT OF THE APEX COURT IN TECHNO SHARES AND STOCK LTD VS C.I.T. (2010) 327 ITR 323 (SC). SINCE THE HIGH COURT CONFIRMED THE ORDER OF THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOM E-TAX(A) IN ALLOWING DEPRECIATION ON THE BSE MEMBERSHIP CARD ON THE BASI S OF THE ORDER OF THIS TRIBUNAL. BY RESPECTFULLY FOLLOWING THE JUDGMENT O F THE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE AND THE JUDGMENT OF THE APEX COURT IN TECHNO SHARES AND STOCKS LTD VS. COMMISSIONER OF INCOME-TAX (2010) 327 ITR 323 (SC) WE UPHOLD THE ORDER OF COMMISSIONER OF INCOME-TAX(A). 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISA LLOWANCE OF PROVIDENT FUND CONTRIBUTION. 3 ITA NO.406/COCH/2010 6. WE HEARD THE LD.REPRESENTATIVE FOR THE ASSESSEE AND THE LD.DR. THE COMMISSIONER OF INCOME-TAX(A) BY FOLLOWING THE JUDGM ENT OF THE APEX COURT IN COMMISSIONER OF INCOME-TAX VS VINAY CEMENTS LTD 313 ITR (ST) 1 FOUND THAT THE PAYMENTS MADE WITHIN THE DUE DATE FOR FILING THE RE TURN OF INCOME HAS TO BE ALLOWED. THE CONTRIBUTION TO PROVIDENT FUND FALLS IN THE FIRST PROVISO TO SECTION 43B. THEREFORE, ANY PAYMENT MADE WITHIN THE DUE DA TE FOR FILING THE RETURN OF INCOME HAS TO BE TREATED AS SUFFICIENT COMPLIANCE O F THE PROVISIONS OF SECTION 43B OF THE ACT. THEREFORE, THE COMMISSIONER OF INCOME-T AX(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE WITH REGARD TO THE PAYMENT MA DE WITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME. 7. THE NEXT GROUND OF APPEAL ARISES FOR CONSIDERATI ON IS WITH REGARD TO THE PROVISION FOR LEAVE ENCASHMENT. 8. WE HEARD THE LD.DR AND THE LD.REPRESENTATIVE FOR THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX(A) ALLOWED THE CLAIM OF T HE ASSESSEE ON THE BASIS OF THE JUDGMENT OF THE CALCUTTA HIGH COURT IN C.I.T. V S EXCIDE INDUSTRIES LTD VS UOI (2007) 292 ITR 470 (CAL). WE HAVE CAREFULLY GONE T HROUGH THE JUDGMENT OF THE CALCUTTA HIGH COURT. THE CONSTITUTIONAL VALIDITY O F SECTION 43B(F) WAS CHALLENGED BEFORE THE CALCUTTA HIGH COURT IN A WRIT PETITION. THE CALCUTTA HIGH COURT FOUND THAT SECTION 43B(F) IS UNCONSCIONABLE, ARBITRARY AN D DE HORS THE JUDGMENT OF THE APEX COURT IN BHARAT EARTH MOVERS VS C.I.T. 245 ITR 428 (SC). ACCORDINGLY, THE PROVISIONS OF SECTION 43B(F) WAS STRUCK DOWN BY THE CALCUTTA HIGH COURT. THE LD.REPRESENTATIVE FOR THE ASSESSEE WAS VERY FAIR EN OUGH IN BRINGING TO THE NOTICE OF THE BENCH THAT THE APEX COURT STAYED THE OPERATI ON OF THE JUDGMENT OF THE CALCUTTA HIGH COURT AND CLARIFIED THAT THE ASSESSEE MUST PAY THE TAX AS IF SECTION 43B IS IN THE STATUTE BOOK THOUGH IT IS ENTITLED TO MAKE A CLAIM IN IT RETURN. IN 4 ITA NO.406/COCH/2010 VIEW OF THE ORDER OF THE APEX COURT STAYING THE OPE RATION OF THE JUDGMENT OF THE CALCUTTA HIGH COURT IN EXIDE INDUSTRIES LTD (SUPRA) , THE PROVISION FOR LEAVE ENTITLEMENT HAS TO BE ALLOWED ONLY ON PAYMENT BASIS IN VIEW OF SECTION 43B OF THE ACT. IN VIEW OF THE ABOVE LATEST DEVELOPMENT, THE COMMISSIONER OF INCOME- TAX(A) IS NOT CORRECT IN ALLOWING THE CLAIM OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IS SET ASIDE AN D THAT OF THE ASSESSING OFFICER IS RESTORED. 9. NOW COMING TO THE CROSS OBJECTION OF THE ASSESSE E, THE ONLY INDEPENDENT GROUND RAISED BY THE ASSESSEE IS WITH REGARD TO REB ATE U/S 88E OF THE ACT. ACCORDING TO THE LD.REPRESENTATIVE FOR THE ASSESSEE , EVIDENCE FOR PAYMENT OF SECURITY TRANSACTION TAX COULD NOT BE PRODUCED BEFO RE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. NOW THE DETAILS OF PAY MENTS AND THE EVIDENCE ARE AVAILABLE WITH THE ASSESSEE. THEREFORE, THE LD.REP RESENTATIVE SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE ASSESSING OFFICER FOR VERIFICATION. 10. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THE C OMMISSIONER OF INCOME- TAX(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER SINCE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR PAYMENT OF SECURITY TRANSA CTION TAX ALONG WITH THE RETURN OF INCOME. THEREFORE, THE COMMISSIONER OF I NCOME-TAX(A) HAS RIGHTLY CONFIRMED THE ADDITION. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE CLAIM OF THE ASSESSEE U/S 88E OF THE ACT WAS DISALLOWED ON THE GROUND THAT THE ASSES SEE COULD NOT PRODUCE ANY EVIDENCE FOR PAYMENT OF SECURITY TRANSACTION TAX AL ONG WITH THE RETURN OF INCOME. NOW THE ASSESSEE CLAIMS THAT THE EVIDENCE IS AVAILA BLE, THEREFORE, THE INTEREST OF 5 ITA NO.406/COCH/2010 THE REVENUE MAY NOT BE PREJUDICED IN CASE THE EVIDE NCE AVAILABLE WITH THE ASSESSEE IS VERIFIED BY THE ASSESSING OFFICER. ACC ORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF REBATE U /S 88E OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSE SSING OFFICER SHALL EXAMINE THE EVIDENCE THAT MAY BE FILED BY THE ASSESSEE FOR PAYM ENT OF SECURITY TRANSACTION TAX AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE W ITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICA L PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 23 RD MARCH, 2012 PK/- COPY TO: 1. DY.C.I.T., CIR.2(1), ERNAKULAM 2. M/S PENINSULAR CAPITAL MARKET LTD, S.T. REDDIAR & SO NS BLDG, VEEKSHANAM ROAD, KOCHI-35 3. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH