GULSHAN INTERNATIONAL PVT. LTD., NEW DELHI V. ACIT, CIRCLE- 10(2), NEW DELHI

ITA 4708/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3481 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.4708/DEL/2017 ASSESSMENT YEAR : 2013-14 GULSHAN INTERNATIONAL PVT. LTD., B-20/1, WAZIRPUR INDUSTRIAL AREA, DELHI 110052. VS. ACIT, CIRCLE- 10(2), NEW DELHI. PAN : AABCG1201H (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI AMIT JAIN, SR.DR DATE OF HEARING : 26-10-2017 DATE OF PRONOUNCEMENT : 30-10-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 21.06.2017 OF CIT(A)- 35, NEW DELHI RELATING TO ASS ESSMENT YEAR 2013-14. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHA LF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DISPOSED OF ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY INCORPORATED ON 20.01.1998 AND IS ENGAGED I N THE BUSINESS OF MANUFACTURING OF PVC CHAPPALS AND FOOTWEAR SOLES ET C.. IT FILED ITS RETURN OF INCOME ON 07.09.2013 DECLARING TOTAL INCOME OF RS.2 ,49,609/-. THE ASSESSING 2 ITA NO.4708/DEL/2017 OFFICER COMPLETED THE ASSESSMENT U/S 143(3) DETERMI NING THE TOTAL INCOME OF RS.14,26,960/- BY MAKING THE FOLLOWING THREE ADDITI ONS :- (A) DISALLOWANCE OF DEPRECIATION ON MOTORCYCLE AND MOTORCYCLE RUNNING AND MAINTENANCE - RS.4,02, 183/- (B) ADDITION ON ACCOUNT OF INTEREST ON INCOME-TAX R EFUND - RS.2,91,111/- (C) DISALLOWANCE OF EXPENSES U/S 36(1)(VA) ON ACCOU NT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION OF ESI AND EPF - RS.4,84,056/- 4. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS :- 1) WHETHER ON FACTS AND UNDER THE CIRCUMSTANCES AN D IN LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING ADDITION ON ACCOUNT OF DEPRECIATION OF RS.2,81,564/- ON THE MOTORCYCLE AND RS.1,20,619/- TOWARDS MOTORCYCLE S RUNNING & MAINTENANCE EXPENSES, PROVIDED TO THE DIRECTOR OF THE COMPANY F OR DISCHARGING, ATTENDING AND EXECUTING THE BUSINESS OBLIGATION OF THE APPELLANT COMPANY. THE ACTION BASED ON PRESUMPTIONS AND ASSUMPTIONS IS LIABLE AND URGED TO BE DELETED. 2) WHETHER ON FACTS AND UNDER THE CIRCUMSTANCES AND IN LAW, THE LEARNED CIT(A) WAS WITHIN THE LAW IN CONFIRMING ADDITION ON ACCOUN T OF INTEREST ON INCOME TAX REFUND OF RS.2,91,111/- GENERATED BY THE CPC-BANGAL ORE AND SUO-MOTTO ADJUSTED AGAINST THE OUTSTANDING DEMANDS IN ARREAR WITHOUT A NY INTIMATION AND IN THE ABSENCE OF NOTICE U/S. 245 OF THE ACT; IN AS MUCH AS, INTER EST ON INCOME-TAX REFUND IS NOT APPEARING IN FORM 26AS. THE UNCALLED FOR ACTION IS LIABLE AND URGED TO BE SET ASIDE. 3) WHETHER ON FACTS AND UNDER THE CIRCUMSTANCES AND IN LAW, THE LEARNED CIT(A) WAS WITHIN THE LAW IN CONFIRMING ADDITION ON ACCOUN T OF DELAYED PAYMENT OF EPF AND ESI OF RS.4,84,056/- (EMPLOYEES CONTRIBUTION) WITH THE INTERPRETATION THAT THE AMOUNT DEPOSITED BEYOND DUE DATE AS PROVIDED UNDER THE REL EVANT STATUTE, THEREBY, IGNORING THE CBDT CIRCULAR NO. 22.2015, DATED 17.12.2015. TH E ARBITRARY DISALLOWANCE IS LIABLE AND URGED TO BE DELETED. 4) THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH/ADDITIONAL GROUNDS OF APPEAL AND/OR WITHDRAW, MODIFY AND OF THE GROUNDS O F APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. 5. SO FAR AS FIRST GROUND IS CONCERNED, THE SAME RE LATES TO ADDITION ON ACCOUNT OF DEPRECIATION OF RS.2,81,564/- ON THE MOT ORCYCLES AND RS.1,20,619/- 3 ITA NO.4708/DEL/2017 TOWARDS MOTORCYCLES RUNNING & MAINTENANCE EXPENSES PROVIDED TO THE DIRECTOR OF THE ASSESSEE COMPANY. SINCE THE ASSESS EE IS A PRIVATE LIMITED COMPANY, THEREFORE, DEPRECIATION ON MOTORCYCLE AND MOTORCYCLE RUNNING & MAINTENANCE EXPENSES CANNOT BE DISALLOWED AS AN EXP ENDITURE BEING PERSONAL IN NATURE IN THE HANDS OF THE ASSESSEE COMPANY. THE A DDITION, IF ANY, CAN BE MADE IN THE HANDS OF THE DIRECTORS AS PERQUISITE AND NO DISALLOWANCE CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. FOR THE ABOVE P ROPOSITION I FIND SUPPORT FROM THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON & ENGINEERING CO. VS. CIT REPORTED IN 253 ITR 749. I, THEREFORE, SET-ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT TH E ASSESSING OFFICER TO DELETE THE DISALLOWANCE SO MADE. 6. SO FAR AS THE SECOND GROUND IS CONCERNED, THE SA ME RELATES TO THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION ON ACCOUN T OF INTEREST ON INCOME-TAX REFUND. SINCE THE ASSESSEE HAS RECEIVED INTEREST O F RS.2,91,111/- ON THE INCOME- TAX REFUND DURING THE IMPUGNED ASSESSMENT YEAR, THE REFORE, THE SAME IN MY OPINION IS TAXABLE IN THE HANDS OF THE ASSESSEE COM PANY. THEREFORE, THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD AND THE GROU ND RAISED BY THE ASSESSEE IS DISMISSED. 7. SO FAR AS THE THIRD GROUND IS CONCERNED, THE SAM E RELATES TO THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.4,8 4,056/- ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO EPF A ND ESI. 4 ITA NO.4708/DEL/2017 8. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS T HAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUTION TO EPF AND ES I AFTER THE DUE DATE PRESCRIBED IN THE SAID PROVISIONS BUT BEFORE THE DU E DATE OF FILING OF THE RETURN U/S 139(1) OF THE I.T. ACT. SUCH DETAILS HAVE BEEN REPRODUCED BY THE LD. CIT(A) IN HIS ORDER AT PAGE 5 WHICH GIVES THE DETAILS AS U NDER :- MONTH AMOUNT ACTUAL DATE DUE DATE APRIL, 2012 92,809/ - 28.05.2012 15.05.2012 DEC., 2012 1,09,087/ - 21.01.2013 15.01.2013 FEB., 2013 1,34,738/ - 22.03.2013 15.03.2013 MAR., 2013 1,47,422/- 01.05.2013 15.04.2013 TOTAL 4,84,056/- 9. SINCE THE ASSESSEE IN THE INSTANT CASE HAS ADMIT TEDLY DEPOSITED THE EMPLOYEES CONTRIBUTION TO PF AND ESI BEFORE THE DU E DATE OF FILING OF THE RETURN, THEREFORE, FOLLOWING THE CONSISTENT DECISIO NS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL THAT DISALLOWANCE CANNOT BE MADE ON AC COUNT OF DELAYED PAYMENT OF EPF AND ESI PAID BEFORE THE DUE DATE OF FILING O F THE RETURN, I SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OF FICER TO DELETE THE ADDITION. THE THIRD GROUND RAISED BY THE ASSESSEE IS ACCORDIN GLY ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 30-10-2017. SUJEET 5 ITA NO.4708/DEL/2017 COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI