DCIT 14 (2) (1), Mumbai V. POSITIVE PACKAGING INDUSTRIES LTD, Mumbai

ITA 4103/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2918 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 07-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Additional depreciation
• Section: 43B; 143(3); 32(1)(iia); 43; 13; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI MAHAVIR SINGH (VICE PRESIDENT) AND SHRI S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) ITA NO. 4103/MUM/2019 ASSESSMENT YEAR: 2014-15 THE DCIT-14(2)(1), ROOM NO. 432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MARINE LINES, MUMBAI-400020. VS. M/S POSITIVE PACKAGING INDUSTRIES LTD., 12-A-06, B-WING, 13 TH FLOOR, PARINEE CRESCENZO, C-38/39, G- BLOCK, BKC, MUMBAI - 400051. PAN NO. AAACP 2836 Q APPELLANT RESPONDENT REVENUE BY : MS. SHREEKALA PARDESHI, DR ASSESSEE BY : MR. BHAUMIK GODA , AR DATE OF HEARING : 2 5 /03/2021 DATE OF PRONOUNCEMENT : 02/06/2021 ORDER PER S. RIFAUR RAHMAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2014-15. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-22, MUMBAI [IN SHORT CIT(A)] AND AR ISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 92CA(4) OF THE INCOME T AX ACT 1961, (THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE ASSESSEE FILED I TS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 27.11.2014 DECLARING TOT AL INCOME AT NIL AS PER NORMAL PROVISION OF THE INCOME TAX ACT 1961 (IN SHO RT ACT) AND RS.17,03,70,081/ UNDER SECTION 115 JB OF THE ACT. THE CASE WAS SELECTED FOR M/S POSITIVE PACKAGING ITA NO. 4103/M/2019 2 SCRUTINY UNDER SECTION 143 (3) OF THE ACT AND SUBSE QUENTLY STATUTORY NOTICES UNDER SECTION 143 (2) AND 142 (1) OF THE ACT WERE I SSUED AND SERVED ON THE ASSESSEE. IN RESPONSE THE AR OF THE ASSESSEE ATTEND ED AND FILED THE RELEVANT INFORMATION IS CALLED FOR. THE REVENUE IS IN APPEAL WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONAL DEPRECIATION OF RS.3,18,05, 283/- U/S 32(1)(IIA) OF THE IT. ACT, PERTAINING TO PLANTS & MACHINERIES ACQUIRED AND INS TALLED IN THE IMMEDIATELY PRECEDING YEAR BUT WERE PUT TO USE FOR LESS THAN 18 0 DAYS IN THAT YEAR. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MODE ON ACCOUNT OF DELAY IN D EPOSIT OF EMPLOYEE'S ESIC AND LABOUR WELFARE FUND CONTRIBUTION U/S 2(24)(X) R.W.S . 36(1)(VA) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS FURTHER ERRED IN RELYING ON THE DECISION OF THE JURISDICTIONAL HI GH COURT IN THE CASE CIT VS GHATGE PATIL TRANSPORTERS LTD. [2014] 368 ITR 749 (BOM), W HEREIN THE SUPREME COURT DECISION IN THE CASE OF ATOM EXTENSION LTD. [319 IT R 306] HAS BEEN FOLLOWED, WITHOUT HAVING REGARD TO THE FACT THAT THE IN THAT CASE, HO N'BLE SUPREME COURT HAS DEALT WITH THE EMPLOYERS CONTRIBUTION WHEREAS THE PRESENT CASE INVOLVES EMPLOYEE'S CONTRIBUTION. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS FURTHER ERRED IN HOLDING THAT THE AMENDED PROVISION OF SECTION 43 B COVERS EMPLOYEE'S CONTRIBUTION ALSO. 3. IN THIS APPEAL OF THE REVENUE, REVENUE HAS RAISE D 2 ISSUES IN THE GROUNDS OF APPEAL WHICH IS, CLAIM OF ADDITIONAL DEPRECIATIO N UNDER SECTION 32 (1) (IIA) OF THE ACT AND ISSUE OF DELAY IN DEPOSIT OF EMPLOYEES ESIC AND LABOUR WELFARE FUND CONTRIBUTION. IT IS BROUGHT TO OUR NOTICE THAT THE ISSUE OF CLAIM OF ADDITIONAL DEPRECIATION UNDER SECTION 32 IS RECURRING NATURE A ND WE NOTICED THAT THE RESPECTIVE ASSESSING OFFICERS IN ASSESSMENT YEAR 20 12-13 AND 2013-14 HAD DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION AND IN THOSE RESPECTIVE ASSESSMENT YEARS THE ISSUE WAS CONTESTED BEFORE COO RDINATE BENCHES OF THIS TRIBUNAL AND IT WAS HELD IN FAVOUR OF THE ASSESSEE (IN ITA NO 6360/MUM/2017 DATED 31.01.2019 AND ITA NO 7268/MUM/2017 DATED 22. 03.2019). SINCE THIS ISSUE IS ALREADY SETTLED IN FAVOUR OF THE ASSESSEE, WE DO NOT SEE ANY REASON TO M/S POSITIVE PACKAGING ITA NO. 4103/M/2019 3 INTERFERE WITH THE FINDINGS OF LD. CIT(A). ACCORDIN GLY GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 4. WITH REGARD TO GROW NO. 2,3 AND 4, WE NOTICED TH AT ASSESSEE HAS DEPOSITED THE ESIC AND LABOUR WELFARE FUND CONTRIBUTION OF TH E EMPLOYEES BEYOND THE DATE OF DUE DATE OF THE RESPECTIVE ACTS. WE NOTICED FROM THE CHART OF DATE OF PAYMENT TO THE RESPECTIVE FUNDS WERE LISTED ON PAGE 14 OF THE LD. CIT(A) ORDER AND NOTICE THAT THERE IS A DELAY OF ONLY FEW DAYS F ROM THE DUE DATE OF PAYMENT. AND THE AMOUNT INVOLVED ALSO IS OF RS.18,116/. WE NOTICED THAT LD. CIT(A) DELIBERATED THE ISSUE IN DETAIL BY RELYING ON VARIO US CASE LAWS OF HONORABLE JURISDICTIONAL HIGH COURT AND DELHI HIGH COURT AND ALSO DECISIONS OF VARIOUS TRIBUNALS AND CAME TO THE CONCLUSION AS BELOW: IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD .(2014) 368 ITR 769 ALSO, HON'BLE BOMBAY HIGH COURT HELD THAT EVEN EMPLOYEES' CONTRIB UTION TO PF ETC IS ALLOWABLE IF DEPOSITED BEFORE DUE DATE OF FILING ROI. THUS, THOU GH SEC 43B(B) OF THE ACT IS RELATED TO EMPLOYER'S CONTRIBUTION, THE HIGH COURTS HAVE HE LD THAT THERE IS NO REASON TO MAKE DISTINCTION BETWEEN THE EMPLOYEES' CONTRIBUTION AND THE EMPLOYERS' CONTRIBUTION. ONCE THE CONTRIBUTION IS MADE, WHETHER BY THE EMPLO YEE OR BY THE EMPLOYER, IT IS A CONTRIBUTION TO A WELFARE FUND HELD IN A TRUST BY T HE EMPLOYER, WHO IS BOUND TO DEPOSIT THE SAME. WHEN THE EMPLOYER DOES NOT DEPOSIT THE SA ME WITHIN THE TIME PRESCRIBED UNDER THE WELFARE ACTS, SUCH AS THE PROVIDENT FUND ACT. ESI ACT ETC., THE EMPLOYER MAY FACE CRIMINAL PROSECUTION UNDER THE SAID ACT. THE E MPLOYER MAY ALSO BE LIABLE TO PAY INTEREST OR PENALTY. HOWEVER, THAT CANNOT BE A REAS ON TO DENY HIM THE BENEFIT OF SEC 43B OF THE ACT, WHICH STARTS WITH A NON OBSTANTE CL AUSE AND WHICH CLEARLY LAYS DOWN THAT THE TAXPAYER CAN TAKE BENEFIT OF DEDUCTION OF SUCH CONTRIBUTIONS, IF THE SAME ARE PAID BEFORE FURNISHING THE RETURN OF INCOME. IN THE CASE OF THE ASSESSEE, IT IS OBSERVED FROM TAX AUDIT REPORT SUBMITTED BY THE ASSESSEE THA T, IT HAS RECEIVED RS.18,116/- FROM ITS EMPLOYEES TOWARDS EMPLOYEE CONTRIBUTION FUND WI THIN DATES BUT DEPOSITED TO THE FUND HOUSES BEFORE FILING ITR. IN THE LIGHT OF THE AFORESAID JUDICIAL PRONOUNCEMENTS, IT M/S POSITIVE PACKAGING ITA NO. 4103/M/2019 4 IS CONSIDERED THAT SEC 43B OF THE ACT, 1961 APPLIES TO BOTH EMPLOYEE AND EMPLOYER CONTRIBUTIONS AND IF THE CONTRIBUTIONS ARE PAID TO THE FUND HOUSES BEFORE FILING ITR, NO DISALLOWANCE U/S 36(1)(VA) IS WARRANTED. THUS IT IS ESTABLISHED THAT WHEN THE EMPLOYEE DEPOSITS BOTH OF ITS CONTRIBUTION AND EMPL OYEES' CONTRIBUTION TO THE FUND HOUSES BEFORE THE DATE OF FILING ITR, THE ENTIRE AM OUNT WILL BE ALLOWED AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSE U/S 43B OF INCOME-TAX ACT, 1961. IN THE LIGHT OF AFORESAID DISCUSSION AND VARIOUS JUDICIAL PRONOU NCEMENTS, THE A.O, IS THUS DIRECTED TO DELETE THE ADDITION OF RS18,116/- MADE TO THE TO TAL INCOME OF THE ASSESSEE U/S 36(1)(VA) OF THE ACT AND ALLOW THE SAID ADDITION U/ S 43B OF THE ACT. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED. 5. CONSIDERING THE AMOUNT INVOLVED AND DELAYS INVOL VED OF ONLY FEW DAYS AND ALSO THE CONCLUSION REACHED BY THE LD CIT(A) WH ICH ARE IN LINE WITH THE DECISIONS OF THIS COORDINATE BENCHES, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD CIT(A). IN THE RESULT GROUND S RAISED BY THE REVENUE IN THIS REGARD ARE DISMISSED. 6. IN THE NET RESULT APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/06/2021. SD/- SD/- (MAHAVIR SINGH) ( S. RIFAUR RAHMAN ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI; DATED: 02/06/2021. RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- M/S POSITIVE PACKAGING ITA NO. 4103/M/2019 5 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI