ACIT 15(2)(1), MUMBAI V. KIMPLAS PIPING SYSTEMS LTD, NASHIK

ITA 6039/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4050 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 26-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI M. BALAGANESH , AM & SHRI RAM LAL NEGI , JM ITA NO. 6039 / MUM/20 1 7 ( ASSESSMENT YEAR : 2014 - 15 ) ASST. COMMISSIONER OF INCOME TAX 15(2)(1) ROOM NO.357, 3 RD FLOOR, AAYAKAR BHAVAN, MAHARS HI KARVE ROAD MUMBAI 400 020 VS. M/S. KIMPLAS PIPING SYSTEMS LTD., B - 20, MIDC, AMBAD AMBAD, NASHIK 400 010 PAN/GIR NO. AAACG3404H ( APPELLANT ) .. ( RESPONDENT ) CO NO. 362 /MUM/20 18 (ARISING OUT OF ITA NO.6039/MUM/2017) ( ASSESSMENT YEAR : 2014 - 15 ) M/S. K IMPLAS PIPING SYSTEMS LTD., B - 20, MIDC, AMBAD AMBAD, NASHIK 400 010 VS. ASST. COMMISSIONER OF INCOME TAX 15(2)(1) ROOM NO.357, 3 RD FLOOR, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD MUMBAI 400 020 PAN/GIR NO. AAACG3404H ( APPELLANT ) .. ( RESPONDENT ) REVENUE B Y SHRI UDAYA BHASKAR JAKKA ASSESSEE BY SHRI NISHIT GANDHI DATE OF HEARING 31 / 01 /201 9 DATE OF PRONOUNCEMENT 06 / 02 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A) - 24, MUMBAI DATED ITA NO.6039/MUM/2017 & CO NO.362/MUM/2018 M/S. KIMPLAS PIPING SYSTEMS LTD., 2 19/01/2017 FOR A.Y.2014 - 15 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER LD. CIT(A) WAS JUSTIFIED IN DEALING THE DISALLOWANCE OF RS.33,33,249/ - MADE BY THE LD. AO ON ACCOUNT OF EMPLOYEE S CONTRIBUTION TO PF AND ESI WHICH WAS PAID BEYOND THE DATE PRE SCRIBED UNDER THE RELEVANT ACT BUT BEFORE END OF THE PREVIOUS YEAR FOR VARIOUS MONTHS. 3. THE LD. AO DISALLOWED THE SAID SUM U/S.36(1)(VA) OF THE ACT R.W.S. 2(24)(X) OF THE ACT. THE LD. CIT(A) BY PLACING RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. HINDUSTAN ORGANICS CHEMICALS LTD., IN ITA NO.399 OF 2012 DATED 11/07/2014 DELETED THE SAID DISALLOWANCE AND GRANTED RELIEF TO THE ASSESSEE. 4. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE F IND THAT THE LD. DR VEHEMENTLY PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT ON THE IMPUGNED ISSUE WHICH WAS DECIDED IN FAVOUR OF THE REVENUE WHEREIN THE HONBLE GUJARAT HIGH COURT HAD CATEGORICALLY HELD THAT THE EMPLOYEE S CONTRIBUTION TO PF AND ESI REPRESENTS AMOUNT RECOVER ED FROM THE SALARY OF EMPLOYEES WHI CH AT THE FIRST INSTANCE FALLS WITHIN THE DEFINITION OF INCOME OF THE ASSESSEE IN TERMS OF SECTION 2(24)(X) OF THE ACT. THE SAME IS ALLOWABLE AS DEDUCTION ONLY WHEN THE SAID RECOV ERY OF PF AND ESI IS REMITTED WITHIN THE DUE DATE PRESCRIBED UNDER THE RELEVANT A CTS IN TERMS OF SECTION 36(1)(VA) OF THE ACT. THE LD. DR ALSO ARGUED THAT ITA NO.6039/MUM/2017 & CO NO.362/MUM/2018 M/S. KIMPLAS PIPING SYSTEMS LTD., 3 THE AMENDMENT BROUGHT IN SECTION 43B IS ONLY WITH RESPECT TO EMPLOYER CONTRIBUTION AND NOT EMPLOYEE C ONTRIBUTION. BUT WE FIND THAT ALL THESE ARGUMENTS HAVE BEEN DULY CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE RELIED UPON BY THE LD. CIT(A) SUPRA FROM PARA 4 TO PARA 10 OF THE SAID ORDER. THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IS BINDING ON THIS TRIBUNAL AND HENCE, REQUIRES TO BE FOLLOWED. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. NOW, LET US COME TO THE CROSS OBJECTION OF THE ASSESSEE WITH REGARD TO THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANC E OF RS.8,64,493/ - IN RESPECT OF INTEREST PAID ON DELAYED PAYMENT OF TAX DEDUCTED AT SOURCE. THE BRIEF FACTS OF THE ISSUE IS THAT THE ASSESSEE CLAIM ED AN EXPENDITURE OF RS.17,12,954/ - ON ACCOUNT OF LATE PAYMENT OF STATUTORY DUES UNDER THE HEAD FINANCE COS TS. THE LD. AO CONSIDERED THE SAME AS IN THE NATURE OF PENALTY AND ACCORDINGLY DISALLOWED THE SAME. THE ASSESSEE STATED THAT INTEREST ON LATE PAYMENT OF VAT, ENTRY TAX, EXCISE, TDS, SERVICE TAX, CST, LBT ETC., WERE INCURRED ONLY IN ORDINARY COURSE OF BUSI NESS AND ARE FULLY VERIFIABLE, THE DETAILS OF WHICH WERE DULY SUBMITTED BEFORE THE LD. AO. IT WAS PLEADED BEFORE THE LD. CIT(A) THAT THE SAID INTEREST PAYMENT WAS ONLY COMPENSATORY IN NATURE AND CANNOT BE CATEGORIZED AS PENALTY FOR INFRINGEMENT OF LAW. THE LD. CIT(A) APPRECIATED THAT INTEREST PAID BY THE ASSESSEE ON VARIOUS STATUTORY DUES ARE COMPENSATORY IN NATURE AND HENCE ALLOWABLE AS DEDUCTION EXCEPT IN ITA NO.6039/MUM/2017 & CO NO.362/MUM/2018 M/S. KIMPLAS PIPING SYSTEMS LTD., 4 RESPECT OF INTEREST ON DELAYED PAYMENT OF TDS TO THE TUNE OF RS.8,64,493/ - WHICH DISALLOWANCE WAS UPH ELD BY HIM. 7 . AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 8 . WE HAVE HEARD RIVAL SUBMISSIONS . WE FIND THAT THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANCE OF INTEREST PAID ON DELAYED PAYMENT OF TDS TO THE TUNE OF RS.8,64,493/ - WAS DONE BASE D ON THE ISSUE BEING CONCEDED AND ACCEPTED BY AUTHORISED REPRESENTATIVE OF THE ASSESSEE BEFORE THE LD. CIT(A). THE ASSESSEE HAVING AUTHORISED HIS AR TO CONCEDE THIS DISALLOWANCE BEFORE THE LD. CIT(A) OUGHT NOT TO HAVE PREFERRED CROSS OBJECTION BEFORE US. E VEN THOUGH VARIOUS ARGUMENTS WERE ADVANCED BY THE LD. AR BEFORE US BY PLACING RELIANCE ON VARIOUS DECISIONS OF CO - ORDINATE BENCHES OF THIS TRIBUNAL, WE FIND THAT NO ARGUMENT WAS ADVANCED ON BEHALF OF THE ASSESSEE WITH REGARD TO THE CRUCIAL ASPECT OF THE IS SUE ALREADY CONCEDED BEFORE THE LD. CIT(A). HENCE, WE DO NOT DEEM FIT TO INTERFERE WITH THE ACTION OF THE LD. CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE DISMISSED. 9 . IN TH E RESULT, BOTH THE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06 / 02 /201 9 SD/ - ( RAM LAL NEGI ) SD/ - ( M. BALAGANESH ) JUDICIAL ME MBER ACCOUNTANT MEMBER MUMBAI ; DATED 06 / 02 /201 9 ITA NO.6039/MUM/2017 & CO NO.362/MUM/2018 M/S. KIMPLAS PIPING SYSTEMS LTD., 5 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//