DCIT, Jaipur V. RAJASTHAN RAJYA KRIYA VIKRAYA SANGH LTD., Jaipur

ITA 54/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5353 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V K JAIN CA DHK

Judgement Text

ITA NO. 54/JP/2015 DCIT, CIRCLE- 6, JAIPUR VS. M/S. RAJAST HAN RAJYA KRIYA VIKRYA SANGH LTD. , JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLA G ;KNO] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 54/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 THE DCIT CIRCLE-6, JAIPUR CUKE VS. M/S. RAJASTHAN RAJYA KRIYA VIKRIYA SANGH LTD. 4, BHAWANI SINGH ROAD,JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAAAR0279B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH, JCIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI V.K. JAIN , CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/03/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28 /04/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A) DATED 17-11-2014 FOR THE ASSESSMENT YEAR 2010-11 RA ISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADD ITION OF RS. 57,16,357/- MADE BY THE AO BY DISALLOWING DEDUCTION U/S 80P(2)(A)IV) OF THE ACT 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADD ITION OF RS.20,76,502/- MADE BY THE AO BY DISALLOWING CONTRI BUTION TO LIC GROUP GRATUITY SCHEME THOUGH THE ASSESSEE FAILE D TO PROVE THAT IT IS AN APPROVED GRATUITY SCHEME ITA NO. 54/JP/2015 DCIT, CIRCLE- 6, JAIPUR VS. M/S. RAJAST HAN RAJYA KRIYA VIKRYA SANGH LTD. , JAIPUR 2 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADD ITION OF RS.99,268/- MADE BY THE AO ON ACCOUNT OF PRIOR PER IOD EXPENSES. 2.1 AT THE OUTSET OF THE HEARING OF THE APPEAL, THE LD. AR OF THE ASSESSEE RELIED ON THE DECISIONS OF ITAT JAIPUR BENCH IN ASS ESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2007-08 (ITA NO. 1042/JP/2010- REVE NUE AND ITA NO. 1013/JP/2010- ASSESSEE VIDE ORDER DATED 04-02-2011 ) AND ASSESSMENT YEAR 2006-07 ( ITA NO. 702/JP/2009 REVENUE AND ITA NO. 707/JP/2009- ASSESSEE VIDE ORDER DATED 16-07-2010) PRAYING THAT THE ISSUES RAISED ABOVE BY THE REVENUE ARE COVERED IN FAVOUR OF THE ASSESS EE. THE LD. AR OF THE ASSESSEE ALSO SUPPORTED THE ORDER OF THE LD. CIT(A) TO THIS EFFECT. 2.2 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS GROUND NO. 1 RELATI NG TO DELETION OF ADDITION OF RS. 57,16,357/- U/S 80P(2)(A)(IV) BY THE LD. CIT (A), WE FIND THAT THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH IN THE ASSESSMENT YEAR 2007-08 BY OBSERVING AS UNDE R:- 2.1 THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE L D. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P(2)(A)(IV) OF THE ACT AMOUNTING TO RS. 58,40,176/- WITHOUT APPRECIATING THE FACT THAT THE PROFIT FROM PURCHASE OF AND SALE OF FERTILIZERS DO NOT FALL WITHIN THE PUR VIEW OF THE SAID SECTION. 2.2 THE AO HAS NOT ALLOWED DEDUCTION U/S 80P(2)(A)( IV) IN RESPECT OF INCOME DERIVED FROM SUPPLY OF FERTILIZERS AND SEEDS TO MEMBER COOPERATIVE SOCIETIES. THE DEDUCTION HAS NOT BEEN ALLOWED BECAU SE THE WORD FERTILISER ITA NO. 54/JP/2015 DCIT, CIRCLE- 6, JAIPUR VS. M/S. RAJAST HAN RAJYA KRIYA VIKRYA SANGH LTD. , JAIPUR 3 IS NOT MENTIONED IN SUB-SECTION (IV) OF SECTION U/S 80P(2)(A). SUCH ISSUE HAS ARISEN IN THE CASE OF THE ASSESSEE FOR THE EARL IER YEARS AND THE ISSUE STANDS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASS ESSEE. 2.3 THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2003-04 AND ALLOWED THE DEDUCTION OF RS. 58,40,176/- U/S 80P(2)(A)(IV). 2.4 WE HAVE HEARD BOTH THE PARTIES. THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL VIDE ORDER DATED 16 TH JULY, 2010 IN THE CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEAR AND THEREFORE, THE LD. CIT (A) WAS JUSTIFIED IN ALLOWING THE DEDUCTION U/S 80P(2)(A)(IV) OF THE AC T. THUS THE SOLITARY GROUND OF THE REVENUE IS DISMISSED. RESPECTFULLY FOLLOWING THE DECISION DATED 04-02-201 1 OF COORDINATE BENCH (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE OR DER OF THE LD. CIT(A) WHICH IS SUSTAINED . HENCE GROUND NO. 1 OF THE REVENUE IS DISMISSED 2.3.1 AS REGARDS GROUND NO. 2 RELATING TO DELETION OF ADDITION OF RS. 20,76,502/- BY THE LD. CIT(A) TOWARDS CONTRIBUTION TO LIC GROUP GRATUITY SCHEME, WE FIND THAT THIS ISSUE HAS ALREADY BEEN DE CIDED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH IN THE ASSESSMENT YEAR 2007-08 BY OBSERVING AS UNDER:- 3.2 THE ISSUE IN RESPECT OF ALLOWABILITY OF SUM OF RS. 15.00 LACS AS CONTRIBUTION TO LIC GROUP GRATUITY SCHEME HAS BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE ASSESS MENT YEAR 2006-07 VIDE ORDER DATED 16 TH JULY, 2010. THE TRIBUNAL OBSERVED AS UNDER:- 10. WE HAVE HEARD BOTH THE PARTIES. AS PER RULE 4 OF PART C OF SCHEDULE (XIV), AN APPLICATION FOR APPROVAL OF GRA TUITY FUNDS IS TO BE MADE IN WRITING ALONGWITH COPY OF TRUST DEED. THE COPY OF APPLICATION HAS BEEN FILED IN THE PAPER BOOK. THE TRUSTEES FURN ISHED THE INFORMATION AS REQUIRED UNDER RULE 9(1)(A) AND ALSO SUBMITTED C OPY OF TRUST DEED. THE APPROVAL IS TO BE GIVEN IN CASE THE CONDITIONS AS MENTIONED IN RULE 3 OF PART C OF SCHEDULE IV ARE SATISFIED. IT IS THE C ASE OF THE ASSESSEE THAT THE APPROVAL WAS RECEIVED BUT THEY ARE NOT ABLE TO HAVE COPY OF THAT BECAUSE THE MATTER IS VERY OLD. IT IS NOT THE CASE OF THE R EVENUE THAT THE CONDITIONS ITA NO. 54/JP/2015 DCIT, CIRCLE- 6, JAIPUR VS. M/S. RAJAST HAN RAJYA KRIYA VIKRYA SANGH LTD. , JAIPUR 4 AS MENTIONED IN RULE ARE NOT SATISFIED. IT IS NOT T HE CASE OF THE REVENUE THAT THE PREMIUM TO LIC IN RESPECT OF GROUP GRATUIT Y SCHEME IS NOT ALLOWABLE BECAUSE THE TRUST VIOLATES THE CONDITIONS AS MENTIONED IN RULE3 OF PART C OF SCHEDULE IV. WE HAVE ALSO NOTICED THAT ACTUAL GRATUITY PAYABLE IS TO THE EXTENT OF FRS 14.05 LACS. IN CASE THE PREMIUM OF GROUP GRATUITY SCHEME IS NOT ALLOWED THEN THE DEDUCTION I N RESPECT OF ACTUAL PAYMENT WAS TO BE ALLOWED. IN CASE THE APPROVAL LET TER IS NOT EITHER WITH THE ASSESSEE OR THE DEPARTMENT, THE REVENUE COULD H AVE CONSIDERED THE APPLICATION AFRESH FOR ALLOWING APPROVAL TO THE TRU ST FUND. THEREFORE, WE FEEL THAT THE DEDUCTION OF RS. 15.00 LACS IS TO BE ALLOWED AS THE ASSESSEE HAS PLACED SUFFICIENT MATERIAL TO SHOW THAT IT HAS APPLIED FOR APPROVAL AND IN NO CASE THE ASSESSEE DOES NOT SATISFY THE CONDIT IONS FOR THE APPROVAL OF GRATUITY FUND. SINCE WE ARE ALLOWING LIABILITY OF R S. 15.00 LACS THE ALTERNATIVE CLAIM IS NOT ACCEPTED. 3.3 WE HAVE HEARD BOTH THE PARTIES. FOLLOWING OUR O RDER, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 15.00 LACS AS CONTRIBUTION TO LIC GROUP GRATUITY SCHEME. SINCE WE ARE ALLOWING TH E CONTRIBUTION, THEREFORE, THE ALTERNATIVE GROUND OF THE ASSESSEE I N RESPECT OF ALLOWING ACTUAL SUM PAID IN RESPECT OF GRATUITY TO THE EXTEN T OF RS. 34,75,603/- IS NOT ACCEPTED. RESPECTFULLY FOLLOWING THE DECISION DATED 04-02-201 1 OF COORDINATE BENCH (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE OR DER OF THE LD. CIT(A) WHICH IS SUSTAINED .HENCE GROUND NO. 2 OF THE REVENUE IS DISMISSED. 2.3.2 AS REGARDS GROUND NO. 3 RELATING TO DELETION OF ADDITION OF RS. 99,268/- BY THE LD. CIT(A) ON ACCOUNT OF PRIOR PER IOD EXPENSES, , WE FIND THAT THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH IN THE ASSESSMENT YEAR 2006-07 BY OBSERVING AS UNDER:- 5. THE SECOND GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,34,279/ -IN RESPECT OF PRIOR PERIOD EXPENSES . 6. THE ASSESSEE CLAIMED THE TELEPHONE BILL OF RS. 6 3,200/- OF MARCH 2005 WHICH WAS RECEIVED IN APRIL 05 AND PAID IN APRIL, 2005. WATER AND ELECTRICITY BILLS OF RS. 5,137/- FOR THE MONTH MARCH 2005 HAS BEEN PAID IN APRIL 2005 AS THE BILLS WERE RECEIVED IN APRIL, 2005. A SUM OF ITA NO. 54/JP/2015 DCIT, CIRCLE- 6, JAIPUR VS. M/S. RAJAST HAN RAJYA KRIYA VIKRYA SANGH LTD. , JAIPUR 5 RS. 15,161/- HAS BEEN PAID DURING THE YEAR BECAUSE THE MEDICAL BILLS OF STAFF WERE SUBMITTED LATE THOUGH SUCH MEDICAL BILLS PERTAINS TO EARLIER YEAR. THE ASSESSEE CLAIMED. THE ASSESSEE CLAIMED RS . 1,07,167/- IN RESPECT OF THE AUDIT OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . THE ISSUE OF ALLOWABILITY OF PRIOR PERIOD EXPENSES HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMEN T YEAR 2003-04 AND 2005-05 BY THE TRIBUNAL. LOOKING TO THE NATURE OF T HE EXPENSES, IT IS CLEAR THAT ALL SUCH EXPENSES ARE ALLOWABLE AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. RESPECTFULLY FOLLOWING THE DECISION DATED 16-07-201 0 OF COORDINATE BENCH (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE OR DER OF THE LD. CIT(A) WHICH IS SUSTAINED. HENCE, GROUND NO.3 OF THE REVENUE IS DISMISSED. 3.0. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/20 16. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28/04/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT , CIRCLE- 6, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-M/S.RAJASTHAN RAJYA KRIYAVIKRAYASANG H LTD. 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.54/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR