Deputy Commissioner of Income Tax- 5(1), Indore, Indore V. M/s Thirdeye Security Services Pvt.Ltd. , Indore

ITA 610/Ind/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5315 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 19-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGEE SH MISHRA
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Business expenditure
• Section: 43B; 143(3); 142(1); 250; 143(2); 139(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.609& 610/IND/2017 ASSESSMENT YEARS: 2013-14 & 2014-15 DCIT - 5(1), INDORE / VS. M/S. THIRDEYE SECURITY SERVICES, PVT. LTD. LG 21,BCM HEIGHT PU, 4, A5, SCHEME NO.54, VIJAY NAGAR, INDORE ( REVENUE ) ( RESPONDENT ) P.A. AACCT3827H REVENUE BY SHRI YOGEE SH MISHRA SR. DR RESPONDENT BY SHRI ANIL KAMAL GARG & ARPIT GAU R, CAS DATE OF HEARING: 17.10.2018 DATE OF PRONOUNCEMENT: 23 .10.2018 / O R D E R PER MANISH BORAD, A.M: THESE TWO APPEAL AT THE INSTANCE OF REVENUE PERTAINING TO A.YS. 2013-14 & 2014-15 ARE DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS) -II, INDORE, (IN SHORT CIT(A)), DATED 27.06.2017 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TA X ACT THI RDEYE SECURITY SERVICES P. LTD. 2 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 11.03.2 016 BY ACIT-5(1), INDORE. 2. IN BOTH THE APPEALS, THE ONLY ISSUE RAISED BY THE R EVENUE RELATES TO THE DELETION OF ADDITION BY THE LD. CIT(A) WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DELAY IN PAYMENT OF EMPLOYEES CONTRIBUTION TO PF & ESIC AT RS.1,18,38,293/- AND RS.1,77,30,759/- RELATING TO A.Y S. 2013-14 & 2014-15 RESPECTIVELY, AS THE ALLEGED EMPLOY EES CONTRIBUTION WAS NOT PAID BEFORE THE DUE DATE OF PAYME NTS AS REQUIRED UNDER THE PROVISIONS OF SECTION 36(1)(VA) READ WITH SECTION 2(24) (X) OF THE I. T. ACT 1961. 3. AS ISSUES RAISED IN BOTH THESE APPEALS ARE COMMON AN D THEY RELATES TO SAME ASSESSEE, THESE WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR TH E SAKE OF CONVENIENCE AND BREVITY. 4. BRIEF FACTS RELATING TO ISSUES RAISED IN BOTH THESE APPEALS, AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF PROVIDING SECURITY CONSULTANCY AND MANPOWE R SUPPLY SERVICES. THE CASE FOR BOTH ASSESSMENT YEARS I .E. A.YS. 2013-14 & 2014-15 WERE SELECTED FOR SCRUTINY, NECESSARY NOTICES U/S 143(2) AND 142(1) OF THE ACT SE RVED UPON THE ASSESSEE. FOR BOTH THE YEARS LD. ASSESSING O FFICER THI RDEYE SECURITY SERVICES P. LTD. 3 EXAMINED THE DETAILS OF AMOUNT DEDUCTED AND DEPOSITED AS EMPLOYEES CONTRIBUTION TOWARDS PF AND ESIC UNDER THE PROVISIONS OF SECTION 36(1)(VA) OF THE I.T. ACT, 196 1. IT WAS COMMONLY OBSERVED THAT A SUM OF RS.1,18,38,293/- AND RS.1,77,30,759/- RELEVANT TO A.YS. 2013-14 & 2014-15 WERE DEPOSITED AFTER THE DUE DATE AS PROVIDED UNDER TH E EXPLANATION OF PROVISO U/S 36(1)((VA) OF THE ACT I.E. THE DUE DATE PRESCRIBED UNDER THE PF AND ESIC LAWS. BOTH THE AMOUNTS WERE DISALLOWED AND ADDED TO INCOME OF THE ASSESSEE, BY THE LD. ASSESSING OFFICER EVEN WHEN DUR ING THE ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE SUBMIT TED NECESSARY PROOF TO SHOW THAT THE IMPUGNED AMOUNTS WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOM E U/S 139(1) OF THE ACT. 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AND SUCCEEDED FOR BOTH THE YEARS, AS THE LD . CIT(A) ALLOWED THE GROUNDS RAISED BY ASSESSEE FOLLOWI NG THE JUDGMENT OF HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF SAGUN FOUNDRY PRIVATE LTD. VS. CIT 1479 (ALLHC ) ITANO.87/2006 DATED 21.12.2016 WHEREIN IT WAS HELD TH AT NO DISALLOWANCE OF THE EMPLOYEES CONTRIBUTION TO PF/ ESIC THI RDEYE SECURITY SERVICES P. LTD. 4 WAS CALLED FOR IF THE ALLEGED AMOUNT IS DEPOSITED BEFOR E THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL F OR BOTH THE ASSESSMENT YEARS. THE LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF THE ASSESSING OFFICE R AND ALSO REFERRED TO THE CIRCULAR ISSUED BY THE CENTRAL BO ARD OF DIRECT TAXES BEARING NO.22/2015 DATED 17.12.2015 MENTIONING THAT THE EMPLOYEES CONTRIBUTION TOWARDS PF/ESIC CAN BE ALLOWED ONLY IF THEY ARE PAID WITHIN THE DUE DATE AS PROVIDED IN THE EXPLANATION TO SECTION 36(1 )(VA) OF THE ACT AND NOT BEFORE THE DUE DATE OF FILING OF R ETURN OF INCOME. 7. PER CONTRA LD. COUNSEL FOR THE ASSESSEE REFERRED AN D RELIED ON THE FINDING OF LD. CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD PLACED BEFORE US. THE COMMO N ISSUE RAISED IN BOTH THESE TWO APPEALS RELATES TO THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TOWARDS PF & ESIC AT RS.1,18,38,293/- AND RS.1,77,30,759/- FOR A.YS. 2 013- 14 & 2014-15 RESPECTIVELY. FIRST UNDISPUTED FACT IS THAT THE ALLEGED AMOUNT WHICH IS THE TOTAL OF MONTHLY AMOUNT PAID FOR EACH FINANCIAL YEAR THI RDEYE SECURITY SERVICES P. LTD. 5 TOWARDS PF & ESIC IS REGULARLY PAID BY THE ASSESSEE FOR EACH MONTH AND THE ACTUAL DATE OF PAYMENT IS AFTER THE D UE DATE OF PAYMENTS AS PRESCRIBED UNDER THE RELEVANT STATUTORY LAWS APPLICABLE FOR PF & ESIC. SECOND UNDISPUTED FACT IS THAT THE ALLEGED AMOUNTS HAVE BEEN PAI D TO THE GOVERNMENT TREASURY UNDER THE PF & ESIC BEFOR E THE DUE DATE FOR FILING OF THE RETURN OF INCOME U/S 139( 1) OF THE ACT APPLICABLE TO THE CATEGORY OF ASSESSEE. 9. NOW THE ONLY ISSUE TO BE ADJUDICATED IS WHETHER IN THE IMPUGNED AMOUNT OF EMPLOYEES CONTRIBUTION FOR PF & ESIC CAN BE CLAIMED AS A BUSINESS EXPENDITURE FOR THE RE LEVANT ASSESSMENT YEARS IN THE LIGHT OF THE FACT THAT THE AMOUNT HAS BEEN PAID AFTER THE DUE DATE PRESCRIBED FOR EACH MON TH UNDER THE RELEVANT LAWS FOR PF & ESIC BUT PAID BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S 139(1 ) OF THE ACT. 10. WE OBSERVE THAT HON'BLE RAJASTHAN HIGH COURT IN T HE CASE OF PR. CIT VS. RAJASTHAN STATE BEVERAGES CORPN. LT D. 84 TAXMANN.COM 173 (20017) HELD THAT IF THE AMOUNT CLAIMED ON PAYMENT OF PF & ESIC CONTRIBUTION BY EMPL OYER HAVING BEEN DEPOSITED ON OR BEFORE THE DUE DATE OF FI LING OF RETURNS OF INCOME, SAME COULD NOT DISALLOWED U/S 43B R.W.S 36(1)(VA) OF THE ACT. THI RDEYE SECURITY SERVICES P. LTD. 6 11. THIS JUDGMENT OF THE HON'BLE RAJASTHAN HIGH COURT WAS CHALLENGED BY THE REVENUE BEFORE THE HON'BLE APEX COURT. HOWEVER, HON'BLE APEX COURT DISMISSED THE SP ECIAL LEAVE PETITION FILED BY THE REVENUE THEREBY CONFIRMI NG THE VIEW TAKEN BY THE HON'BLE RAJASTHAN HIGH COURT [(2017) 250 TAXMANN.COM 16 (HON'BLE SUPREME COURT) DATED 4 TH AUGUST 2017]. 12. ABOVE REFERRED JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF RAJASTHAN STATE BEVERAGES CORPN. LTD(SUPRA) HAS COME AFTER THE JUDGMENT OF HON'BLE HIG H COURT OF ALLAHABAD IN THE CASE OF SAGUN FOUNDRY PRIVATE LTD. VS. CIT (SUPRA). THE VIEW TAKEN BY BOTH THE HON' BLE COURTS ARE SAME. LD. CIT(A) HAS ALLOWED THE ASSESSEES APPEAL RELYING ON THE JUDGMENT OF HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF SAGUN FOUNDRY PRIVATE LTD. VS. CIT (SUPRA). 13. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCE S OF THE CASE AND RESPECTFULLY FOLLOWING ABOVE QUOTED JUDGM ENT OF HON'BLE HIGH COURT AND ALSO CONSIDERING THE FACT TH AT THE HON'BLE APEX COURT HAS DISMISSED THE SLP FILED BY TH E REVENUE AGAINST THE JUDGMENT OF HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF RAJASTHAN STATE BEVERAGES CORPN. LTD(SUPRA), ARE OF THE CONSIDERED VIEW THAT EXPLANATION THI RDEYE SECURITY SERVICES P. LTD. 7 36(1)(VA) IS TO BE READ ALONG WITH SECTION 43B OF THE ACT AND SECTION 43B OF THE ACT BEING A SECTION STARTING WITH THE PHRASE NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, HAS TO BE GIVEN AN EDGE OVER EXPLANATION TO SECTION 36(1)(VA) OF THE ACT AND THE DUE DATE IS TO BE CONSTRUED AS THE DUE DATE FOR FILING THE RET URN OF INCOME U/S 139(1) OF THE ACT. ACCORDINGLY, BOTH THE IMPUGNED AMOUNTS AT RS. RS.1,18,38,293/- AND RS.1,77,30,759/- RELEVANT TO A.YS. 2013-14 & 2014-15 RESPECTIVELY, BEING THE AMOUNT TOWARDS EMPLOYEES CONTRIBUTION TO PF & ESIC EACH TO BE ALLOWED AS BUSIN ESS EXPENDITURE. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE FINDING OF LD. CIT(A). BOTH THE APPEALS OF THE REVENU E ARE STAND DISMISSED. 14. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23 .10.2018. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 23/10/2018 CTX? P.S/. . . THI RDEYE SECURITY SERVICES P. LTD. 8 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR