Dev Information Technology Pvt. Ltd., Ahmedabad V. The Deputy Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

ITA 412/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5116 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Section: 143(3); 14A

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 412/AHD/2017 ( ASSESSMENT YEAR : 2013-14) DEV INFORMATION TECHNOLOGY PVT. LTD., 14, AARYAN CORPORATE PARK, NR. SHILAJ CROSSING THALTEJ, AHMEDABAD / VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1)(2), AHMEDABAD ././ PAN/GIR NO. : AAACD5427B ( APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : SHRI M. J. SHAH, A.R. !' $# / RESPONDENT BY : SHRI ALOK KUMAR, SR. D.R. % &'($) DATE OF HEARING 04/07/2018 , $) / DATE OF PRONOUNCEMENT 02/08/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-1, AHMEDAB AD (CIT(A) IN SHORT), DATED 28.10.2016 ARISING IN THE ASSESSMENT ORDER DATED 06.11.2015 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 20 13-14. 2. ASSESSEE HAS FILED BELATED APPEAL BY 39 DAYS. CONSIDERING THE SMALLNESS OF DELAY, THE SAME STANDS CONDONED AN D THE APPEAL IS ADMITTED FOR HEARING. ITA NO. 412/AHD/17 [DEV INFORMATION TECHNOLOGY PVT. LTD. VS. DCIT] A.Y. 2013-14 - 2 - 3. GROUND NO.1 CONCERNS DELETION OF DISALLOWANCE O F DELAYED IN PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND (PF) AND EMPLOYEES' STATE INSURANCE CORPORATION (ESIC) AGGRE GATING AMOUNT OF RS.17,99,164/- UNDER S. 2(24)(X) OF THE A CT. 4. THE CIT(A) DENIED THE RELIEF CLAIMED BY THE ASSE SSEE IN THE FIRST APPEAL. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE EXAMINED THE ISSUE TOWARDS ALLOWABILITY OF PF & ESIC UNDER S.36(1)(VA) R.W.S. 2(24)(X) OF THE ACT. WE NOTICE AT THE OUTSET THAT THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CO RPORATION 366 ITR 170 (GUJ) IS AGAINST THE ASSESSEE ON THE FIRST PRINCIPLES. THE HONBLE GUJARAT HIGH COURT CONSIDERED THE QUESTION WITH RESPECT TO THE DISALLOWANCE OF AMOUNT BEING EMPLOYEES CONT RIBUTION TO PF ACCOUNT/ESIC CONTRIBUTION, WHICH ADMITTEDLY, THE ASSESSEE IN THAT CASE DID NOT DEPOSIT WITH THE PF DEPARTMENT/ E SIC DEPARTMENT ON OR BEFORE THE DUE DATE UNDER THE PF ACT AND/OR E SI ACT. HOWEVER, IN THE COURSE OF HEARING BEFORE US, THE AS SESSEE HAS TRIED TO DEMONSTRATE THAT EMPLOYEES CONTRIBUTION TO PF/E SIC HAS BEEN MADE BEFORE THE DUE DATE AS PRESCRIBED UNDER THE RESPECTIVE ACT HAVING REGARD TO THE MONTH OF DISBURSEMENT OF SALAR Y/WAGES AND ALSO THE GRACE PERIOD AVAILABLE UNDER THE RELEVANT ACTS. IT IS THUS BROADLY THE CASE OF THE ASSESSEE THAT THE RELEVANT DUE DATE FOR MAKING PAYMENT OF CONTRIBUTION HAS TO BE SEEN NOT W ITH REFERENCE TO THE RELEVANT MONTHS RELATABLE TO WAGES/SALARY BU T THE MONTH OF ITS ACTUAL DISBURSEMENT. COUPLED WITH THIS, GRACE P ERIOD AVAILABLE ITA NO. 412/AHD/17 [DEV INFORMATION TECHNOLOGY PVT. LTD. VS. DCIT] A.Y. 2013-14 - 3 - UNDER THE RESPECTIVE ACT IS ALSO REQUIRED TO BE TAK EN INTO ACCOUNT. IN THIS REGARD, WE OBSERVE THAT THE CO-ORDINATE BEN CH OF TRIBUNAL IN KANOI PAPER & INDUSTRIES LTD. VS. ACIT 75 TTJ 44 8 HAS OBSERVED THAT THE RELEVANT DUE DATE IN SUCH A CASE IS TO BE SEEN WITH REFERENCE TO THE MONTH OF THE ACTUAL DISBURSE MENT OF WAGES/SALARIES. WE ALSO ARE OF THE VIEW THAT GRACE PERIOD AVAILABLE UNDER THE RESPECTIVE ACTS SHOULD BE TAKEN INTO ACCOUNT WHILE COMPUTING THE DELAY, IF ANY. 7. HENCE, WE CONSIDER IT EXPEDIENT TO RESTORE THE I SSUE BACK TO THE FILE OF THE AO FOR FACTUAL VERIFICATION AND RE- DETERMINATION OF THE ISSUE IN THE LIGHT OF THE OBSERVATIONS MADE BY THE CO-ORDINATE BENCH IN THE CASE OF KANOI PAPER & INDUSTRIES LTD. (SUPRA). THE AO SHALL THUS RE-COMPUTE THE AMOUNT OF DISALLOWANCE UNDER S.36(1)(VA) R.W.S. 2(24)(X) OF THE ACT, IF ANY, ON THE ABOVE BASIS, IN ACCORDANCE WITH LAW. THE ASSESSEE SHALL BE ENTI TLED TO RELIEF UNDER S. 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT WHERE IT IS FOUND THAT THE DEPOSITS HAVE BEEN MADE TOWARDS PF/ESIC WITHIN THE DUE DATE FROM THE CLOSE OF MONTH OF ACTUAL DISBURSEMENT OF S ALARY/WAGES IN THE LIGHT OF INTERPRETATION RENDERED IN CASE OF KAN OI PAPER & INDUSTRIES LTD. (SUPRA). 8. IN THE RESULT, GROUND NO.1 OF THE ASSESSEES APP EAL IS ALLOWED FOR STATISTICAL PURPOSES. 9. GROUND NO.2 CONCERNS DISALLOWANCE OF RS.62,632/- BY INVOKING SECTION 14A OF THE ACT. 10. THE AFORESAID AMOUNT OF RS.62,632/- REPRESENTS ESTIMATED DISALLOWANCE AT 0.5% OF THE INVESTMENT AS PER THIRD LIMB OF RULE 8D(2). IN VIEW OF THE TAX FREE INCOME GENERATED FR OM THE ITA NO. 412/AHD/17 [DEV INFORMATION TECHNOLOGY PVT. LTD. VS. DCIT] A.Y. 2013-14 - 4 - INVESTMENT AND IN VIEW OF THE ADMINISTRATIVE EXPENS ES REQUIRED TO BE INCURRED FOR HANDLING THE ISSUES CONNECTED TO IN VESTMENT PORTFOLIO, WE DO NOT SEE ANY ERROR IN THE ORDER OF CIT(A) IN SUSTAINING THE AFORESAID DISALLOWANCE. 11. IN THE RESULT, GROUND NO.2 OF THE ASSESSEES AP PEAL IS DISMISSED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 02/08/2018 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- ..' / REVENUE 2.' / ASSESSEE 0. ) % 1) / CONCERNED CIT 4. % 1)- / CIT (A) 4.5'67!8)8& 9 9 / DR, ITAT, AHMEDABAD :.7;<= / GUARD FILE. BY ORDER / 9 / 9 THIS ORDER PRONOUNCED IN OPEN COURT ON 02/08/2 018