Socomec Innovative Power Solutions Private Limited, CHENNAI V. DCIT, CHENNAI

ITA 617/CHNY/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4750 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 06-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2015
• Court: TRIBUNAL
• Department Lawyers: PATHALAVATH PEERYA
• Assessee Lawyers: KAPIL HIRANIC A; DAPAR KIRPALANI
• Keywords: Transfer pricing; Principle of natural justice; International transaction; Additional evidence; Question of law
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NOS.617/MDS./2015 & 572/MDS./2016 ASSESSMENT YEARS : 2010-11 & 2011-12 M/S.SOCOMEC INNOVATIVE POWER SOLUTIONS PVT LTD ., THIRU-VI-KA INDUSTRIAL ESTATE, GUINDY, CHENNAI 600 032. VS. THE DCIT, CORPORATE CIRCLE 6(2), ROOM NO.705,VANAPARATHY BLOCK AAYAKAR BHAWAN, CHENNAI. [PAN AAKCS 3579 H ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.KAPIL HIRANI,C.A & MR.DAPAR KIRPALANI,ADVOCATE /RESPONDENT BY : MR.PATHALAVATH PEERYA, CIT D.R / DATE OF HEARING : 06 - 03 - 201 7 / DATE OF PRONOUNCEMENT : 26 - 04 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2 010-11 IS DIRECTED AGAINST THE DIRECTION OF THE DISPUTE RESO LUTION PANEL (DRP),CHENNAI DATED 19.11.2014 AND THE OTHER APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2011-12 IS AGAINST THE ASSESSMENT O RDER DATED 23.12.2015 GIVING EFFECT TO THE DIRECTION OF DRP, B ANGALORE DATED ITA NO.572/16, 617/15 :- 2 -: 23.12.2015. SINCE ISSUES INVOLVED IN THESE TWO APPE ALS ARE COMMON IN NATURE, THESE APPEALS ARE CLUBBED TOGETHER, HEARD T OGETHER, DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E. 2. THE COMMON GROUND IN THESE APPEALS BY THE ASSE SSEE IS THAT THE AO/TPO/DRP HAVE ERRED IN LAW AND FACTS IN REJEC TING COMPARABLE UNCONTROLLED PRICE (CUP) METHOD ADOPTED BY THE ASS ESSEE AS THE MOST APPROPRIATE METHOD (MAM) FOR THE PURPOSE OF BENCHMA RKING ITS INTERNATIONAL TRANSACTION WITH ITS ASSOCIATED ENTER PRISES(AE). 3. THE FACTS OF THE CASE AS NARRATED IN ASSESSMENT YEA R 2010-11 ARE THAT THE ASSESSEE IS A SUBSIDIARY OF SOCOMEC SA FRANCE A ND IS ENGAGED IN THE BUSINESS OF IMPORT OF SOCOMEC BRANDED UNINTERRUPT ED POWER SUPPLY (UPS) FROM ITS AES AND THE SAME IS SOLD IN INDIA. THE AS SESSEE IS THUS ONLY A TRADING ENTITY. THE ASSESSEE ALSO PROVIDES POST SA LES SERVICES IN CONNECTION TO THE UPS SYSTEMS SO SOLD BY IT. THE ASSESSEE FIL ED ITS RETURN OF INCOME FOR A.Y 2010-11 ON 30.9.2010 DECLARING LOSS OF ` 3,91,97,109/-. THE ASSESSEE HAS DURING THE YEAR UNDER CONSIDELRATION HAD ADOPTE D CUP AS MOST APPROPRIATE METHOD (MAM) FOR DETERMINING THE ALP OF ITS AE PURCHASES. THE ASSESSEE HAD ACCORDINGLY ALSO FILED DETAILED CUP WO RKINGS BEFORE THE TPO IN SUPPORT OF ITS DETERMINATION OF ALP. THE LD. TPO RE JECTED THE CUP METHOD SO ADOPTED BY THE APPELLANT ON VARIOUS GROUNDS AS M ENTIONED IN PARA 8 OF THE TPO ORDER WHICH ARE BASELESS, PRESUMPTUOUS AND THUS INVALID. THE LD. TPO, AFTER REJECTING CUP AS THE MAM, SUGGESTED RESA LE PRICE METHOD (RPM) ITA NO.572/16, 617/15 :- 3 -: OR BERRY RATIO (GROSS PROFIT / VALUE ADDED EXPENSES ) AS THE OTHER MOST APPROPRIATE METHOD. THE TPO THOUGH SUGGESTING RPM A S THE OTHER MAM AND DESPITE RPM BEING ONE OF THE PRESCRIBED METHODS FOR DETERMINING THE ALP UNDER THE PROVISIONS OF INCOME TAX ACT AND RULES, P ROCEEDED TO DETERMINE THE ALP OF THE ASSESSEE S TRANSACTION OF IMPORTS (P URCHASES) FROM ITS AE USING BERRY RATIO WHICH IS NOT ONE OF THE PRESCRIBE D METHODS UNDER LAW. THE ASSESSEE FILED ITS DETAILED OBJECTION TO THE AC TION OF THE TPO OF REJECTING CUP AND USING BERRY RATIO. 3.1 THE LD. TPO. DETERMINED THE ALP OF THE TRANSAC TIONS OF THE APPELLANT USING BERRY RATIO AND MADE AN ADJUSTMENT OF ` 11,64,40,050/- TO THE ALP OF THE IMPORTS MADE BY THE APPELLANT IGNORING THE BASI C FACT THAT THE APPELLANT IS MERELY A TRADER AND AS SUCH DOES NOT ADD MUCH VA LUE TO THE PRODUCTS BEING SOLD. THUS USING RATIO OF GROSS PROFIT / VALU E ADDED EXPENSES AND COMPARING IT WITH OTHER COMPARABLES IS NOT APPLICAB LE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AS THE APPELLANT DOES NOT DO ANY VALUE ADDITION TO THE PRODUCTS BEING TRADED BY IT. THE ID. TPO FURTHE R WHILE CALCULATING THE BERRY RATIO AT PARA 15 OF TPO ORDER, NOT CONSIDERED THE FIGURE OF OTHER INCOME OF ` 2,34,17,434/- IN THE TOTAL OF OPERATING INCOME DESP ITE INCLUDING IT IN THE LIST OF OPERATING INCOMES. THE FIGURE OF OTHER INCOME HAS BEEN DULY ADDED IN THE CALCULATIONS FOR AY 2011-12 WHICH HAS IDENTICAL FACTS. THE LD. TPO SELECTED COMPARABLE COMPANIES TO COMPARE THE BE RRY RATIO AS THE SAID COMPARABLE COMPANIES, WHICH ARE SAID TO BE ENGAGED IN SIMILAR BUSINESSES. THE COMPARABLES SELECTED BY THE TPO ARE AS UNDER: ITA NO.572/16, 617/15 :- 4 -: ADTECH SYSTEMS LTD. ENGAGED IN BUSINESS OF EAS SOLUTIONS, DISPLAY SECURE SYSTEM, CCTV/IP SYSTEM, ACCESS CONTROL SYSTE M, FIRE DETECTION SYSTEM ETC. ALERT FIRE PROTECTION SYSTEMS PVT. LTD. THE COM PARABLE COMPANY HAS BEEN IN BUSINESS FOR 17 YEARS WHEREAS THE APPELLANT HAS EFFECTIVELY COMMENCED ITS BUSINESS OPERATIONS IN F.Y 2009-10 AF TER ITS SPLIT WITH ITS IV PARTNER. LNTEX TECHNOLOGIES LTD. ENGAGED IN BUSINESS OF PRODUCING MULTIMEDIA SPEAKERS, MOBILE PHONE BATTERIES, CHARGERS ETC. PAE LTD. ENGAGED IN BUSINESS OF DEALING IN AUTO BATTERIES, AUTO PARTS, LNVERTER AND LNVERTER BATTERIES ETC. 3.2 THE ACTION OF THE TPO SUBSEQUENTLY CONFIRMED BY THE DRP, OF USING BERRY RATIO INSTEAD OF RPM. THE ASSESSEE HAD, DURIN G ASSESSMENT PROCEEDINGS HAD ALSO SUGGESTED USE OF RPM IN CASE C UP WAS HELD TO BE NOT JUSTIFIED BY THE TPO. THE ASSESSEE HAS DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL, SUBMITTED ADDITIONAL EVIDENCE BEING F RESH SEARCH OF THE COMPARABLE COMPANIES USING RESALE PRICE METHOD (RPM ) ANALYSIS. 3.3 THE ASSESSEE HAS ALSO IN ITEM 5 OF THE ADDITIO NAL EVIDENCE SUBMITTED BEFORE THE TRIBUNAL, GIVEN THE CORRECTED CALCULATIO NS OF THE GROSS PROFIT AND GROSS PROFIT RATIO. THE ASSESSEE HAS CONSIDERED ALL THE INCOMES WHICH ARE INTEGRAL PART OF THE BUSINESS OF THE ASSESSEE IN CA LCULATING THE GP RATIO INCLUDING SERVICE INCOME AND COMMISSION INCOME. THE SAID INCOMES HAVE ALSO BEEN CONSIDERED BY THE TPO AS PART OF GROSS PR OFIT WHILE CALCULATING BERRY RATIO. THE ASSESSEE HAS FURTHER EXCLUDED IMPO RT DUTY PAID BY IT AS THE ITA NO.572/16, 617/15 :- 5 -: SAME HAS TO BE EXCLUDED TO MAKE THE RESULTING GP RA TIO COMPARABLE WITH OTHER COMPANIES WHO HAVE VARYING DEGREES OF IMPORTS . THE A.R IN THE LIGHT OF THE ABOVE FACTS, PRAYED BEFORE THE TRIBUNAL TO A LLOW THE ALTERNATE RPM ANALYSIS UNDERTAKEN BY THE ASSESSEE ALONG WITH CORR ECTED GROSS PROFIT IN THE INTEREST OF NATURAL JUSTICE. 4. ON THE OTHER HAND, LD.D.R SUBMITTED THAT THE TP O HAS DISCUSSED IN DETAIL THE METHOD ADOPTED BY THE ASSESSEE AND HAS O BSERVED THE DEFICIENCIES AND LACUNAE INVOLVED. ACCORDING TO TPO , THE DIFFERENT BRANDS OF THE SAME PRODUCT CANNOT BE COMPARED UNDER CUP METHO D. THE PRODUCTS WHICH VARY WIDELY WITH RESPECT TO BRAND VALUE, TEC HNOLOGY, COST OF PRODUCTION, PLACE OF PRODUCTION, ENERGY EFFICIENCY CANNOT BE COMPARED BY CUP METHOD. THE DR ARGUES THAT DEPENDING ON THE VOL UME OF SALES, THE SALE PRICE WOULD VARY. THE ASSESSE COMPANY HAD COMPARED HUGE VOLUMES OF PURCHASE WITH SMALL / NEGLIGIBLE QUANTITIES IN THE UNCONTROLLED TRANSACTIONS, WHICH IS NOT PROPER. THE DR HAS ALSO QUOTED RELEVAN T JUDICIAL DECISIONS IN SUPPORT OF HIS ACTION. ANALYSING THE FUNCTION CARRI ED OUT BY THE ASSESSEE COMPANY, THE DR STATED THAT BERRY RATIO IS THE APPR OPRIATE METHOD FOR THE COMPARABILITY STUDY IN CASE OF THE ASSESSEE. IT HAS BEEN SUBMITTED THAT, THE ASSESSEE FOR THE RELEVANT YEAR APART FROM TRADING H AS DONE SUBSTANTIAL VALUE ADDITION SERVICES. HE PLEADED TO REJECT CUP AS MAM AND TO ADOPT BERRY RATIO AS PLI. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS A TRADER IN UPS SYSTEM AND ACCESSOR IES AND ALSO PROVIDING SALES AFTER SERVICES. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT MADE ANY ITA NO.572/16, 617/15 :- 6 -: VALUE ADDITION TO THE UPS GOODS PROCURED FROM ITS A .E. THE UPS WERE SOLD IN INDIAN MARKET AS IT IS PROCURED FROM THE AE. THE TP O HAS ACCEPTED THE TP STUDY THAT RESALE PRICE METHOD (RPM) IS ONE OF THE ACCEPTED METHODS OUT OF FIVE METHODS IN TRANSFER PRICING (TP). EVEN AFTER SUGGESTING THAT ONE, HE IS NOT READY TO ACCEPT THAT METHOD. THE RESALE PRICE M ETHOD (RPM) IS A METHOD TO COMPARE THE GROSS PROFIT OF THE ASSESSEE WITH THE GROSS PROFIT OF THE COMPARABLE COMPANIES AND TO COMPUTE THE ALP. TH E RPM BEGINS WITH THE PRICE AT WHICH A PRODUCT THAT HAS BEEN PURCHASE D FROM A.E AS RESOLD TO AN INDEPENDENT ENTERPRISES. THIS PRICE IS THEN RED UCED BY AN APPROPRIATE GROSS PROFIT, THAT THIS PRICE REPRESENTING THE AMO UNT OUT OF WHICH THE SELLER WOULD SEEK TO COVER ON SELLING AND OTHER OPERATIVE EXPENSES. IN THE LIGHT OF THE FUNCTIONS PERFORMED, MAKE AN APPROPRIATE PROFIT MARGIN CAN BE RECORDED, AFTER ADJUSTMENTS FOR OTHER COSTS ASSOCIA TED WITH THE PURCHASE OF THE PRODUCT AS AN ALP FILED ORIGINAL TRANSFER OF TH E PRICING BETWEEN A.ES. THE TPO OVERWHELMING THE RPM ADOPTED FROM BERRY RATIO METHOD ON THE REASON THAT THE COMPANY IS NOT JUST TRADER. THERE WAS ALSO VALUE ADDED SERVICE BY THE ASSESSEE COMPANY WH ICH IS A PERMANENT FACTOR. ACCORDING TO TPO, THE CONDUCT OF THE ASSESS EE CLEARLY SHOWS THAT IT IS CAPTIVE FOR AE. FOR THIS PURPOSE REJECTING THE RPM, TPO HAS GIVEN THE REASONS THAT THE ASSESSEE HAS NOT PURCHASED ALL TH E MATERIALS FROM ITS AE. IT PURCHASED MERELY 50% OF THE MATERIALS SUCH AS BATT ERY AND OTHER RELATED MATERIALS FROM DOMESTIC MARKET AND OTHER INDEPENDEN T ENTERPRISES. IF THE RPM IS CONSIDERED AS MOST APPROPRIATE METHOD, THE M ARGIN EARNED BY THE ITA NO.572/16, 617/15 :- 7 -: ASSESSEE TO PURCHASE THE MATERIAL FROM OTHER INDEPE NDENT PARTIES IS ALSO PART OF THE GROSS PROFIT EARNED BY THE ASSESSEE, WH ICH LEASED TO ANNUALLY. 6. BEFORE US, LD.A.R PLEADED THAT THERE IS NO PURC HASE FROM DOMESTIC MARKET. HOWEVER, THIS ARGUMENT OF THE LD.A.R IS CO NTRARY TO THE FINDINGS OF THE LOWER AUTHORITIES. HENCE, WE ARE NOT IN A POSI TION TO APPRECIATE THE ARGUMENT OF THE LD.A.R. LD.A.R RELIED ON THE FOLLOW ING TRIBUNAL CASES:- I) MATTEL TOYS INDIA PVT LTD. IN ITA NO.2476/MUM/20 08, DATED 12.06.2013 II) DANISCO (INDIA) PVT LTD. IN ITA NO.5291/DEL./20 10, DATED 29.04.2014 III) STAR DIAMOND GROUP IN ITA NO.3923/MUM/2008, DA TED 28.01.2011 IV) KODAK POLYCHROME GRAPHICS (I) P LTD., IN ITA NO .1557/MUM/2009, DATED 26.06.2013 V) OF FRIGOGLASS INDIA P LTD., IN ITA NO.463/DEL./2 013, DATED 11.04.2014 VI) TUPPERWARE INDIA PVT LTD. IN ITA NO.2140/DEL./2 011, DATED 29.08.2014 6.1 IN ALL THE ABOVE CASE LAWS CITED BY THE ASSESS EE, THE GOODS ARE SOLD WITHOUT ANY VALUE ADDITION. IN THE PRESENT CASE, I T IS NOT THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS PURCHASED ALL FROM I TS A.E. BEING SO, THE RATIO LAID DOWN BY THE ABOVE CASE LAWS HAVE NO APPL ICATION TO THE ASSESSEES CASE. HENCE, WE ARE OF THE OPINION THAT THE APPLIC ATION OF BERRY RATIO IS MOST APPROPRIATE METHOD ADOPTED BY AO/TPO. DRP IS J USTIFIED AND THE SAME IS CONFIRMED. THIS GROUND OF APPEAL OF THE ASSESSEE IS REJECTED. 7. THE NEXT GROUND IS WITH REGARD TO DISALLOWING T HE PROVISIONS FOR WARRANTY BY AO/TRP/DRP. ITA NO.572/16, 617/15 :- 8 -: 7.1 THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE H AS CLAIMED PROVISIONS OF WARRANTY OF ` 1,67,33,228/-. THE LD.A.R RELIED ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF ROTORK CONTROLS INDIA (P) LTD IN (2009) 314 ITR 62 HAS HELD THE CONDITIONS REQUIRED TO ALLOW A PROVISIONS AS EXPENSES OF WHICH THE RELEVANT PART IS REPRODUCED AS UNDER:- THE PRINCIPLE WHICH EMERGES IS THAT IF THE HIS TORICAL TREND INDICATES THAT A LARGE NUMBER OF SOPHISTICATED GOOD S WERE BEING MANUFACTURED IN THE PAST AND IF THE FACTS ESTABLISH ED SHOW THAT DEFECTS EXISTED IN SOME OF THE ITEMS MANUFACTURED A ND SOLD, THEN THE PROVISIONS MADE FOR WARRANTY IN RESPECT OF THE ARMY OF SUCH SOPHISTICATED GOODS WOULD BE ENTITLED TO DEDUCTION FROM THE GROSS RECEIPTS U/S.37. IT WOULD ALL DEPEND ON THE DATA SY STEMATICALLY MAINTAINED BY THE ASSESSEE. BEFORE LOWER AUTHORITIES, WHEN THE ASSESSEE ASKED A BOUT THE HISTORICAL TRENDS AND THE BASIS FOR CALCULATION FOR PROVISIONS FOR WARRANTY EXPENSES, FILED A LETTER DATED 30.03.2015 PRODUCED THE COMPUT ATIONAL BASIS FOR CLAIMING WARRANTY EXPENSES. IT IS FOUND THAT THE ASSESSEE HA S NOT CLAIMED THE PROVISION ON WARRANTY EXPENSES IN THE EARLIER YEARS AND HAS CLAIMED IN THIS YEAR FOR ` 1,67,33,228/-. HENCE, THE CLAIM OF ASSESSEE WAS R EJECTED BY THE DRP. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFOR E US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, IF THE PROVISIONS FOR WARRANTY CLAI MED BY THE ASSESSEE IS BASED ON THE SCIENTIFIC BASIS IT IS TO BE ALLOWED, PROVIDED IF THE ASSESSEE HAS REVERSED THE EXCESS PROVISIONS MADE IN THE SUBSEQUE NT ASSESSMENT YEARS. ACCORDINGLY, WE REMIT THE ISSUE TO THE FILE OF AO T O EXAMINE WHETHER THE ITA NO.572/16, 617/15 :- 9 -: ASSESSEE FOLLOWING THE SAME METHOD OF MAKING PROVIS IONS FOR WARRANTY EXPENSES AND CONSISTENT BASIS YEAR TO YEAR AND REVE RSE THE EXCESS PROVISIONS IN THE SUBSEQUENT YEAR AND DECIDE ACCORDINGLY IN TH E LIGHT OF ABOVE APEX COURT DECISION CITED SUPRA. 9. THE OTHER GROUND IN ITA NO.617/MDS/2015 IS WITH REGARD TO DISALLOWANCE OF ` 1,54,892/- TOWARDS DELAYED PAYMENTS OF EMPLOYEES CONTRIBUTION TO PF AND ESI, ALTHOUGH PAID BEFORE TH E DUE DATE OF FILING THE RETURN OF INCOME UNDER INCOME TAX ACT. 10. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAD DURING THE YEAR DEPOSITED THE EMPLOYEES CONTRIBUTION TO PF & ESI AM OUNTING TO ` 1,54,892/- ON 17.4.2010 FOR WHICH THE DUE DATE UNDER THE RELEV ANT PF AND ESI ACTS WAS 15.4.2010. THE PAYMENT WAS THUS DELAYED CONSIDERING THE PF AND ESI STATUTES BUT WAS WITHIN THE DUE DATE OF FILING THE RETURN OF INCOME AS PRESCRIBED UNDER INCOME TAX ACT, 1961.THE ID. AO IG NORING THE SUBMISSIONS OF THE APPELLANT, PROCEEDED TO MAKE AN ADDITION OF ` 1,54,892/- U/S 2(24)(X) R.W.S 36(1)(VA) IGNORING THE FACT THAT THESAID PAYM ENT HAS BEEN MADE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AS PRES CRIBED UNDER THE PROVISIONS OF THE INCOME TAX ACT, 1961 AND AS SUCH IS AN ALLOW ABLE DEDUCTION UNDER LAW. 11. BEFORE US, THE ASSESSEE PLACED RELIANCE ON THE VARIOUS JUDGMENTS WHEREIN IT HAS BEEN HELD THAT THE EMPLOYEES CONTRIB UTIONS TO PF / ESI IF PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AS PRESCRIBED UNDER THE INCOME TAX ACT, 1961 IS ALLOWABLE AS DEDUCTION. ITA NO.572/16, 617/15 :- 10 - : 12. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINI ON THAT THE GRIEVANCE OF THE ASSESSEE PERTAINING TO EMPLOYEES CONTRIBUTION TOWARDS PF & ESI BEFORE DUE DATE AS PRESCRIBED UNDE R THE ACT IS SQUARELY COVERED BY THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. MIS. INDUSTRIAL SECURITY & INTELLIGENCE INDI A PVT. LTD. IN TC(APPEAL) NOS.585 & 586 OF 2015 DATED 24.7.2015 AN D HELD AS UNDER:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUS IONS LTD. REPORTED IN 319 ITR 386, WHEREBY, THE SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTION 43B AND AMEND MENT TO FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATIVE AND ARE EFFECTIVE RETROSPECTIVELY, I.E., WITH EFFECT FROM 1.4.1988 I. E., THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT V. AMIL LTD. REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWA RDS PROVIDENT FUND AND ESI AFTER DUE AS PRESCRIBED UNDE R THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VI EW OF THE PROVISIONS OF SECTION 43B AS AMENDED BY FINANCE ACT , 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED T HE EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYM ENT, BUT WITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME . HENCE, FOLLOWING THE ABOVE-SAID DECISIONS, WE FIND NO REAS ON TO DIFFER WITH THE FINDINGS OF THE TRIBUNAL. ACCORDINGLY, WE FIND NO QUESTION OF LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THESE APPEALS. ACCORDIN GLY, BOTH THE TAX CASE (APPEALS) STAND DISMISSED. NO COSTS. CONSEQUENTLY, M.P.NO. 1 OF 2015 IS ALSO DISMISSED. 13. IN VIEW OF THE ABOVE JUDGEMENT OF JURISDICTION AL HIGH COURT, THIS GROUND RAISED BY THE ASSESSEE IS ALLOWED SUBJECT TO VERIFICATION BY AO. THE ITA NO.1772/MDS./16 IS ALSO DISPOSED OFF AS ABO VE. ITA NO.572/16, 617/15 :- 11 - : 4. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN ITA NO.617/MDS./15 IS PARTLY ALLOWED AND IN ITA NO.1772 /MDS./16 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON APRIL, 2017, AT CHENNA I. . ! '# $ ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER %& / CHENNAI '() / DATED: APRIL, 2017. K S SUNDARAM (*++,-.+/. / COPY TO: + 1 . / APPELLANT 3. + 0+$ / CIT(A) 5. .12+,,3 / DR 2. / RESPONDENT 4. + 0 / CIT 6. 2#4+5 / GF