M/s. Injectcare Parenterals Pvt.Ltd., Vapi V. The DY.CIT.,Circle-4, Ahmedabad

ITA 515/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8561 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 09-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Section: 43B; 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. INJECT CARE PARENTERALS PVT. LTD., PLOT NO. 130, GIDC, VAPI - 396195 PAN: AABCI0232J (APPELLANT) VS THE DCIT, INCOME TAX, CIRCLE - 4 AHMEDABAD (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: S H RI M.J. SHAH , A.R. DATE OF HEARING : 24 - 08 - 2 017 DATE OF PRONOUNCEMENT : 15 - 09 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S AP PEAL FOR A.Y. 2010 - 11 , AR ISES FROM ORDER OF THE CIT(A) - II, AHMEDABAD DATED 09 - 12 - 2014 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I T A NO . 515 / A HD/20 15 A SSE SSMENT YEAR 2010 - 11 I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 2 1. THE C.I.T.(APPEALS) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF RS.27,136/ - U/S.40(A)(IA). 2. THE C.I.T.(APPEALS) FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF RS.2,45,620/ - BEING THE INTEREST ON THE CONSOLIDATED TAX PAID BY THE ASSESSEE. 3. THE C.I.T.(APPEALS) FURTHER ER RED IN UPHOLDING THE DISALLOWANCE OF EMPLOYEES' CONTRIBUTION TO ESIC OF RS.41,258/ - AND PF CONTRIBUTION OF RS.2,56,319/ - . 3. IN THIS CASE, RETURN OF INCOME DECLARING LOSS OF RS. - 1 , 98 , 95 , 076/ - WAS FILED ON 30 TH SEP, 2010. FURTHER, THE ASSESSEE HAS REVISED ITS RETURN OF INCOME ON 1 8 TH APRIL, 2011 DECLARING TOTAL LOSS OF RS. - 4 , 36 , 06 , 508/ - . SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE 143(2) OF THE ACT ON 3 RD AUGUST, 2012. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSING OFFICER NOTICED THAT ASSESSEE HAS MADE PAYMENT OF RS. 27 ,1 36/ - AS INTEREST TO TATA CAPITAL LTD. ON WHICH TDS WAS NOT MADE . CONSEQUENTLY , THE ASSESSING OFFICER HAS DISALLOWED IT WITHIN THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. T HE ASSESSIN G OFFICER HAS MADE ANOTHER ADDITION OF RS. 2,45,620/ - IN N RESPECT OF PRIOR PERIOD EXPENSES PAID TO GIDC . T HE ASSESSING OFFICER HAS ALSO MADE DISALLOWANCE U/S. 36(1)(VA) OF RS. 41,258 OF ESIC AND RS. 2 , 56 , 319/ - OF PF CONTRIBUTION BECAUSE FOR DELAY IN DEPOSIT ING THESE AMOUNTS . 4. AGGRIEVED AGAINST THE DECISION, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ABOVE ADDITIONS BY OBSERVING AS UNDER: - REGARDING DISALLOWANCE OF RS. 27 , 136/ - U/S. 40(A)(IA) OF THE ACT, THE LD. CIT(A) HAS OBSERVED AS UNDER: - I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 3 4.3 DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE APPELLANT HAS ALSO CONTENDED THAT THE SECTION 40(A)(IA) WAS APPLI CABLE ONLY IN RESPECT OF TDS DEFAULTS IF THE AMOUNT WAS PAYABLE. IN THE CASE OF THE APPELLANT, THE AMOUNT WAS ALREADY PAID AND THEREFORE, THE SAME CANNOT BE CONSIDERED AS COVERED BY THE PROVISIONS OF SECTION 40(A)(IA). THE APPELLANT PLACED RELIANCE ON THE JUDGEMENT OF TEJA CONSTRUCTION IS 39 SOT 13, ITAT HYDERABAD. FURTHER, IT ALSO PLACED RELIANCE ON THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING SERVICES PVT. LTD. 357 ITR 642 AGAINST WHICH THE SLP FILED BY THE DEPT, HAS BEEN DISMISSED BY - HONOURABLE SUPREME COURT. IT HAS ACCORDINGLY BEEN SUBMITTED BY THE APPELLANT THAT SINCE THE SLP HAS BEEN DISMISSED THE PROPOSITION LAID BY THIRD MEMBER BENCH OF VISAKHAPATNAM IN THE CASE OF MARILYN SHIPPING & TRANSPORTERS VS. ACIT IN ITA NO. 477/VIZ/20 08 DATED 29/03/2012 WAS APPROVED. THE SUBMISSION OF THE APPELLANT, THAT THE SLP AGAINST THE JUDGEMENT OF HONOURABLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED AND ACCORDINGLY THE DECISION OF ITAT VISAKHAPATNAM BENCH IN THE CASE OF MARILYN SHIPPING & TRANSPORT S WAS APPROVED, CANNOT BE ACCEPTED. THE HONOURABLE SUPREME COURT HAS SIMPLY DISMISSED THE SLP FILED BY THE DEPT. WITHOUT GIVING ANY REASONS. NO DETAILED ORDER REGARDING THE JUDGEMENT PASSED BY THE HONOURABLE ALLAHABAD HIGH COURT HAS BEEN GIVEN. IT IS A SET TLED PRINCIPLE OF LAW THAT DISMISSAL SIMPLICITER IS NOT BINDING PRECEDENT. RELIANCE IS PLACED ON THE JUDGEMENT OF HONOURABLE SUPREME COURT IN THE CASE OF SAURASHTRA OIL MILLS ASSOCIATION GUJARAT VS STATE OF GUJARAT REPORTED IN 2002 AIR 1130. THEREFORE, THE APPELLANT SHOULD HAVE DEDUCTED THE TAX ON THE AMOUNT WHICH WAS EITHER PAID OR PAYABLE DURING THE YEAR. RELIANCE IS PLACED ON THE JUDGEMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF SIKANDAR KHAN N TANWAR 357 ITR 312 WHICH IS BINDING IN THE STATE OF GUJARAT. RECENTLY, ITAT COCHIN BENCH IN THE CASE OF THE RAMANTHALI SERVICE CO - OPERATIVE BANK LTD IN I.T.A NO. 361 /COCH/2012 DATED 21 /11 /2014 HAS ALSO UPHELD THE ABOVE VIEW. REGARDING, THE FACTUAL ASPECTS RELATED TO THE ISSUE IT IS UNDISPUTED THAT THE APPELLANT HAS PAID INTEREST TO TATA CAPITAL LTD ON WHICH THE TAX WAS LIABLE TO BE DEDUCTED. THE APPELLANT HAS CLEARLY MADE A DEFAULT AND THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE. ACCORDINGLY, IT IS HE LD THAT THE APPELLANT COMPANY WAS LIABLE TO D EDUCT TAX ON THE AMOUNT OF INTEREST PAID TO WITHOUT DEDUCTING IDS. THE DISALLOWANCE MADE BY THE AO IS THEREFORE UPHELD. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. REGARDING DISALLOWANCE OF RS. 2 , 45 , 620/ - , THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANC E BY OBSERVING AS UNDER: - 5.3 DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE APPELLANT HAS CLAIMED DEDUCTION ON ACCOUNT OF PAYMENT OF CONSOLIDATED TAX TO GIDC VAPI. TH E AO DISALLOWED THE SAME IS AS IT WAS NOTED BY HIM THAT THE AMOUNT DID NOT RELATE TO THE PREVIOUS YEAR BUT TO THE PRIOR PERIOD. THE APPELLANT ON THE OTHER HAND HAS SUBMITTED THAT IT WAS NOT AWARE ABOUT THE LIABILITY AND INTEREST AND ON RECEIPT OF MEMO DATE D 15/10/2009 AT ONLY COME TO KNOW ABOUT THE SAME. THE EXPENSES WERE NOT SHOWN IN THE BOOKS OF ACCOUNTS OF EARLIER YEAR. THE APPELLANT WAS FACING FINANCIAL DIFFICULTY AND INCURRING LOSSES AND THEREFORE, THE PAYMENT WAS MADE IN AUGUST, 2010 AND OCTOBER, 20 10 AND AS PER THE INSTALLMENT GRANTED BY THE CONCERNED AUTHORITY. THE DISALLOWANCE WAS NOT MADE BY THE APPELLANT ITSELF AS THE PAYMENT WAS MADE BEFORE THE DUE DATE OF FILING OF RETURN. THE APPELLANT HAS ALSO SUBMITTED THAT THERE WAS A FIRE IN THE APPELLANT COMPANY IN THE YEAR 2005 - 06 AND THEREFORE, IT COULD NOT START ITS BUSINESS. ON RECEIPT OF THE NOTICE FOR PAYMENT OF TAX THE APPELLANT MADE A REQUEST TO THE NOTIFIED AREA AUTHORITY FOR WAIVING THE TAX FOR THE PERIOD UP TO 01/07/2007. THEREAFTER, I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 4 THE NEGOTI ATIONS WERE HELD AND THE AMOUNT WAS AGREED BY THE APPELLANT FOR PAYMENT. THE APPELLANT HAS ALSO CLAIMED THAT EVEN THOUGH THE AMOUNT PERTAINS TO EARLIER YEAR, IT HAS CRYSTALLISED DURING THE YEAR UNDER CONSIDERATION AND THE SAME SHOULD ACCORDINGLY BE ALLOWED AS DEDUCTION KEEPING IN VIEW THE JUDGEMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENTS AND CHEMICAL INDUSTRIES (SUPRA). THE APPELLANT IN THE ALTERNATIVE HAS ALSO CLAIMED THAT SINCE THE AMOUNT HAS BEEN PAID DURING THE CURRENT YEAR AN D THE NOTIFIED AREA AUTHORITY VAPI SHOULD BE TREATED AS MUNICIPALITY BECAUSE OF THE PROVISIONS OF GUJARAT MUNICIPALITIES ACT, THE DEDUCTION SHOULD BE ALLOWED ON PAYMENT BASIS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 43B OF THE ACT. THE CONTENTION REG ARDING TREATING THE NOTIFIED AREA AUTHORITY AS MUNICIPALITY WAS FORWARDED TO AO FOR COMMENT VIDE THIS OFFICE LETTER DATED 13/10/2014. THE REPORT OF THE AO HAS ALSO BEEN RECEIVED VIDE HIS OFFICE LETTER DATED 28/10/2014. IN THE LETTER, IT HAS BEEN DISPUTED B Y THE AO THAT THE TAX LEVIED BY THE NOTIFIED AREA IS NOT TO TAX WHICH CAN BE CONSIDERED UNDER SECTION 43B OF THE ACT. IT IS ALSO BEEN SUBMITTED BY THE AO THAT SINCE THE ASSESSEE DID NOT FURNISH ANY EVIDENCE IN THIS RESPECT DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THE SAME SHOULD NOT BE ADMITTED NOW. I HAVE CAREFULLY CONSIDERED ALL RELEVANT ASPECTS, THE SUBMISSION OF \ THE APPELLANT, THE ADDITIONAL GROUNDS RAISED BY IT DURING THE COURSE OF APPELLATE PROCEEDINGS AND THE REPORT OF THE AO ON THE ADDITIONAL G ROUND AND THE WRITTEN SUBMISSION OF THE APPELLANT. IT IS NOTED THAT THE CLAIM OF THE APPELLANT REGARDING CRYSTALLISATION OF THE DEMAND DURING THE YEAR UNDER CONSIDERATION IS NOT ACCEPTABLE. THE APPELLANT WAS OPERATING IN THE NOTIFIED AREA AUTHORITY AND WAS FULLY AWARE OF THE TAXES TO BE PAID TO THE AUTHORITY. THE CLAIM OF THE APPELLANT THAT IT HAD FINANCIAL DIFFICULTIES AND WAS NOT AWARE OF THE DEMAND IS WITHOUT ANY BASIS. EVEN IF IT HAD FINANCIAL DIFFICULTIES, IT SHOULD HAVE ACCOUNTED FOR THE TAXES IN THE EACH YEAR. THEREFORE, THE CLAIM OF THE APPELLANT THAT THE EXPENSES ARE NOT PRIOR PERIOD EXPENSES CANNOT BE ACCEPTED. REGARDING, THE CL AIM OF THE APPELLANT THAT THE DEDUCTION SHOULD BE ALLOWED ON THE PAYMENT BASIS UNDER SECTION 43B, THE CLAIM IS PARTLY ACC EPTABLE AS THE JUDGEMENT OF HONOURABLE ITAT AHMEDABAD IN ITA NUMBER 1315/AHD/2007 IN THE CASE OF SACHIN NOTIFIED AREA AUTHORITY IS IN FAVOUR OF THE APPELLANT. IN THAT CASE, IT WAS HELD THAT THE NOTIFIED AREA AUTHORITY IS ALSO A MUNICIPALITY BECAUSE OF THE POWERS IN PROVISIONS CONTAINED IN GUJARAT MUNICIPALITIES ACT. THEREFORE, THE PAYMENT OF TAX SHALL HAVE TO BE ALLOWED TO THE APPELLANT UNDER SECTION 43B OF THE ACT AS THE SAME HAVE BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THE PAYM ENT OF INTEREST OF RS. 2,45,620/ - CANNOT.BE ALLOWED AS IT IS IN THE NATURE OF PENALTY FOR NOT PAYING THE DUE TAXES LEVIED BY AN ACT OF THE STATE. THE APPELLANT IS THEREFORE ALLOWED IN DEDUCTION OF RS. 6,75,718/ - . THE APPELLANT HAS ALSO CLAIMED, IN THE FIFTH GROU ND, THAT THE AO SHOULD HAVE GIVEN DIRECTION FOR ALLOWING THE CONSOLIDATED TAX OF RS .91,726/ - IN THE YEAR OF PAYMENT IN THE SECTION 43B OF THE ACT. THE CLAIM OF THE APPELLANT IS NOT ACCEPTABLE. THE AO CANNOT GIVE ANY DIRECTION FOR ALLOWING THE DEDUCTION IN NEXT YEAR OR IN THE YEAR IN WHICH THE PAYMENT IS MADE. THE CLAIM FOR A DEDUCTION IS TO BE MADE BY THE APPELLANT IN THE RETURN OF INCOME FOR THE YEAR IN WHICH THE PAYMENT IS MADE. THIS GROUND OF APPEAL IS THEREFORE DISMISSED. THE FOURTH GROUND OF APPEAL IS ACCORDINGLY PARTLY ALLOWED AND THE FIFTH GROUND OF APPEAL IS DISMISSED. I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 5 IN RESPECT OF THIRD DISALLOWANCE OF CONTRIBUTION OF ESIS OF RS. 41 , 258/ - AND PF CONTRIBUTION OF RS. 2 , 56 , 319/ - , THE LD. CIT(A) HAS SUSTAINED THIS ADDITION BY OBSERVING AS UNDER: - 6.3 DECISION: - I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. IT IS NOTED THAT THE ISSUE OF LATE DEPOSIT OF EMPLOYEES CONTRIBUTION IS COVERED AGAINST THE APPELLANT BY A RECENT JUDGEMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION, 41 TAXMAN.COM TOO, WHEREIN IT HAS BEEN HELD THAT SECTION 43B WHICH PERMITS A DEDUCTION FOR PAYMENTS MADE UP TO THE DUE DATE FOR FILING THE ROI APPLIES ONLY TO THE EM PLOYER'S CONTRIBUTION TO THE PROVIDENT FUND ET CETERA. IT DOES NOT APPLY TO THE EMPLOYEES CONTRIBUTION. THE EMPLOYEES CONTRIBUTION RECEIVED BY THE EMPLOYER - ASSESSEE IS DEEMED TO BE INCOME IN THE ASSESSEE'S HANDS U/S 2(24) (X) AND IF THE ASSESSEE HAS NOT C REDITED THE SAID SUM TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE MENTIONED IN EXPLANATION TO S, 36(1)(VA), THE ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTIONS OF SUCH AMOUNT IN COMPUTING THE INCOME REFERRED TO IN S. 28 OF THE ACT, THE HONOURABLE COURT HAS HELD THAT THE ARGUMENT THAT TWO VIEW WERE POSSIBLE WAS NOT ACCEPTABLE BECAUSE ONLY ONE VIEW WAS POSSIBLE ON A CORRECT INTERPRETATION OF THE PROVISION. THE RELEVANT EXTRACT FROM THE JUDGEMENT IS QUOTED AS UNDER: - 'SECTIO N 43B, READ WITH SECTION 36(1)(VA) OF THE INCOME - TAX ACT, 1961 - BUSINESS DISALLOWANCE - CERTAIN DEDUCTIONS TO BE ALLOWED ON ACTUAL PAYMENT (EMPLOYEES CONTRIBUTION) - WHETHER WHERE AN EMPLOYER HAS NOT CREDITED SUM RECEIVED BY IT AS EMPLOYEES' CONTRIBUTION TO EMPLOYEES' ACCOUNT IN RELEVANT FUND ON OR BEFORE DUE DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1)(VA), ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT THOUGH HE DEPOSITS SAME BEFORE DUE DATE PRESCRIBED UNDER SECTION 438 I.E., PRIOR TO F ILING OF RETURN UNDER SECTION 139(1) - HELD, YES - ASSESSEE SFATE TRANSPORT CORPORATION COLLECTED A SUM BEING PROVIDENT FUND CONTRIBUTION FROM ITS EMPLOYEES - HOWEVER, IT HAD DEPOSITED LESSER SUM IN PROVIDENT FUND ACCOUNT - ASSESSING OFFICER DISALLOWED SAME UNDER SECTION 438 - HOWEVER, COMMISSI ONER (APPEALS) DELETED DISALLOWANCE ON GROUND THAT EMPLOYEES CONTRIBUTION WAS DEPOSITED BEFORE FILING RETURN - WHETHER SINCE ASSESSEE HAD NOT DEPOSITED SAID CONTRIBUTION IN RESPECTIVE FUND ACCOUNT ON DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1 )(VA), DISALLOWANCE MADE BY ASSESSING OFFICER WAS JUST AND PROPER - HELD, Y ES [PARA 8] [I N FAVOUR OF REVENUE]' RESPECTFULLY FOLLOWING THE JUDGEMENT OF JURISDICTIONAL HIGH COURT THE DISALLOWANCE MADE BY THE AO IS UPHELD AS IT IS THE CASE OF LATE DEPOSIT OF EMPLOYEE'S CONTRIBUTION OF PF AND ESIC. THE GROUND OF APPEAL IS ACCORDINGLY, DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE MATERIAL ON RECORD CAREFULLY. WE HAVE NOTICED THAT THE ASSESSEE HA S PAID INTEREST TO THE TATA CAPITAL LIMITED ON WHICH THE TDS WAS NOT MADE . AFTER CONSIDERING THE DETAILED FACTS AND JUDICIAL FINDINGS AS I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 6 ELABORATED IN THE DECISION OF THE LEARNED CIT APPEAL AS SUPRA IN THIS ORDER , WE ARE OF THE VIEW THAT THE ASSESSEE COMPANY WAS LIABLE TO DEDUCT TAX ON THE AMOUNT OF INTEREST PAID TO TATA CAPITAL LTD. THEREFORE , WE UPHOLD THE DECISION OF THE LEARNED CIT APPEAL ON THIS ISSUE AND THE APPEAL OF THE ASSESSEE IS DISMISSED. IN RESPECT OF ADDITION OF RS.2 , 45 , 620/ , WE HAVE NO TICED THAT TH E ASSESSEE COMPANY HAS PAID THE OUTSTANDING RELIABILITY OF CONSOLIDATED TAX OF RS.6 75718/ - AND INTEREST THERE ON OF RS.2 45620/. THE ASSESSING OFFICER HAS DIS ALLOWED THE SAME AS IT WAS NOTED BY HIM THAT THE AMOUNT WAS NOT RELATED TO THE YEAR UNDER CONSIDERATION . T HEREFORE , HE HAS CONSIDERED THE SAME AS PRIOR PERIOD EXPENSES . THE LEARNED CIT APPEAL HAS A LLOWED THE PAYMENT OF TAX PART TO THE EXTENT OF RS.6 75718 / - UNDER SECTION 43B OF THE ACT AND DIS ALLOWED THE A MOUNT PERTAINING TO INTEREST OF RS. 2 45620 BY CONSIDERING THE SAME IN THE NATURE OF PENALTY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE HAS PLACED RELIANCE ON THE JUDICIAL PRONOUNCEMENT OF THE CALCUTTA HIGH COURT 137 ITR 358 RUSSEL PROPERTIES PVT. LTD. V. CIT IN WHICH IT WAS HELD THAT IN CASE THE INTEREST AMOUNT WAS GE NERATED AUTOMATICALLY AS PART OF THE PROVISIONS PRESCRIBED IN THE ACT THEN IT WILL NOT BE TREATED AS PENALTY . WE HAVE CONSIDERED THAT IT WAS NOT ESTABLISHED FROM THE RECORD THAT THE AFORESAID INTEREST AMOUNT WAS SEPARATELY LEVIED AS PE NALTY IN THE CASE OF THE ASSESSEE . T HEREFORE , WE ARE NOT INCLINED WITH THE DECISION OF THE LEARNE D CIT APPEAL AND THE APPEAL OF THE ASSESSEE IS ALLOWED ON THIS ISSUE. I.T.A NO. 515 /AHD/20 15 A.Y. 2010 - 11 PAGE NO M/S. INJECT CARE PARENTERAL S PVT. LTD. VS. DCIT 7 REGARDING DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO ESIC AND PF , WE UPHOLD THE DECISION OF THE LEARNED CIT IN VIEW OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT AS MENTIONED IN THE FINDING OF THE LEARNED CIT APPEAL AS SUPRA IN THIS ORDER. THEREFORE , THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS DISMISSED. 6. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 15 - 09 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15 /09 /2017 / COPY OF ORDER FORWA RDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,