DCIT, Circle-16(2), Hyd, Hyderabad V. Pragati Green Meadows & Resorts Ltd., Hyd, Hyderabad

ITA 663/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5965 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.663 & 664/HYD/2016 ASSESSMENT YEAR 2010-2011 & 2011-2012 DCIT, CIRCLE-16(2) HYDERABAD. VS. M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., HYDERABAD. PAN AACCP5283H (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A. SITARAMA RAO FOR ASSESSEE : SHRI P. MURALIMOHAN RAO DATE OF HEARING : 08.12.2016 DATE OF PRONOUNCEMENT : 08.12.2016 ORDER PER D. MANMOHAN, V.P. THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAI NST THE ORDERS PASSED BY THE CIT(A)-IV, HYDERABAD AND THEY PE RTAIN TO THE A.YS. 2010-2011 AND 2011-2012. FOR THE A.Y. 2010-2011 THE F OLLOWING GROUNDS WERE URGED BY THE REVENUE. 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.10,11,130 MADE BY THE A.O. TOWARDS DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. 3. THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.88,79,070 MADE BY THE A.O. TOWARDS DISALLOWANCE U/S.40(A)(IA) OF THE INCOME TAX ACT. 1.1. IN SO FAR AS THE A.Y. 2011-2012 IS CONC ERNED, THE REVENUE RAISED ONLY ONE GROUND WHICH READS AS UNDER : 2 ITA.NOS.663 & 664/HYD/2016 M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., HYDERABAD. 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.1,60,92,487 MADE BY THE A.O. TOWARDS DISALLOWANCE U/S.40(A)(IA) OF THE INCOME TAX ACT. 2. AT THE TIME OF HEARING, LD. D.R. STRONGLY RELIED UP ON THE ORDER PASSED BY THE A.O. WHEREAS THE LEARNED COUNSE L APPEARING ON BEHALF OF THE ASSESSEE PLACED BEFORE US SEVERAL CASE LAW TO SUBMIT THAT THE ISSUES STAND SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE AND AGAINST THE REVENUE AND THUS SUPPORTED THE ORDERS PASSED BY THE LD. CIT(A). 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN APPEAL FOR THE A.Y. 2010-2011 THE FIRST ISSUE IS WITH REGARD TO THE DELETION OF THE ADDITION OF RS.10,11, 130 REFERRABLE TO DELAYED PAYMENT TO THE P.F. ACCOUNT (EMPLOYEES CONTRIBU TION). IT IS NOT IN DISPUTE, VIDE PARA-4 OF THE ASSESSMENT ORDER, THAT THE PAYMENTS WERE MADE BEFORE THE DUE DATE FOR FILING THE RETURN OF INCO ME. THE LD. CIT(A) RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH CO URT IN THE CASE OF CIT VS., AIMIL LIMITED (2010) 188 TAXMAN 265 (DEL.) TO CONCLUDE THAT EVEN IF THERE IS A DELAY IN MAKING PAYMENT TO THE P.F. ACCOUNT, SO LONG AS IT IS PAID BEFORE THE DATE OF FILING OF THE RETURN TH ERE CANNOT BE ANY DISALLOWANCE UNDER THE I.T. ACT. LEARNED COUNSEL, APP EARING ON BEHALF OF THE ASSESSEE, ADVERTED OUR ATTENTION TO THE HONBLE D ELHI HIGH COURT JUDGMENT TO SUBMIT THAT IN THE SAID CASE THE A.O. MADE THE DISALLOWANCE ON THE GROUND THAT THERE IS A DELAY IN PA YMENT OF EMPLOYEES CONTRIBUTION TOWARDS P.F. BUT THE HONBLE HIGH COURT FOLLOWED THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. VINAY CEMENTS LTD., (2007) 213 CTR 268 (SC)/(2009) 313 ITR (ST.) 1 (SC) TO CONCLUDE THAT SO LONG AS THE PAYMENT IS MADE BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME NO DISALLOWANCE CAN BE M ADE BY APPLYING THE PROVISIONS OF SECTION 36(I)(VA) OF THE ACT. THIS VIEW WAS CONSISTENTLY FOLLOWED BY THE ITAT, HYDERABAD BENCHES ALSO. THE LD . D.R. COULD NOT PLACE ANY DECISION WHEREIN A CONTRARY VIEW WAS TAKEN BY ANY COORDINATE 3 ITA.NOS.663 & 664/HYD/2016 M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., HYDERABAD. BENCH PARTICULARLY SUBSEQUENT TO THE DECISION OF THE APE X COURT IN THE CASE OF VINAY CEMENTS LTD., (SUPRA). 4. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ACCEPT THE CLAIM OF THE ASSESSEE AND HOLD THAT THE LD. CIT(A) H AVING SET ASIDE THE DISALLOWANCE BY FOLLOWING THE DECISION OF THE HO NBLE DELHI HIGH COURT WHICH INTURN, FOLLOWED THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF VINAY CEMENTS LTD., (SUPRA) THE VIEW TAKEN B Y THE LD. CIT(A) DO NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 OF THE REVENUE (FOR THE A.Y. 2010-2011) IS DISMISSED. 5. GROUND NOS. 3 FOR THE A.Y. 2010-2011 AND THE ONLY GROUND URGED IN THE APPEAL FOR THE A.Y. 2011-2012 IS WITH RE GARD TO THE DISALLOWANCE MADE BY THE A.O. BY APPLYING THE PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT WHICH WAS SET ASIDE BY THE LD. CIT (A) ON THE GROUND THAT THE SAID SECTION APPLIES ONLY IN THE CASE OF AMOUNT PAYABLE AND NOT IN RESPECT OF THE AMOUNT ALREADY PAID. IN THIS REGAR D, THE LD. CIT(A) FOLLOWED THE DECISION OF THE ITAT, SPECIAL BENCH IN TH E CASE OF M/S. MERILYN SHIPPING & TRANSPORT, VISAKHAPATNAM 136 ITD 2 3. 6. WE HAVE HEARD LD. D.R. AS WELL AS THE LEARNED C OUNSEL APPEARING ON BEHALF OF THE ASSESSEE IN THIS REGARD. A DMITTEDLY IDENTICAL ISSUE WAS DECIDED BY THE ITAT, HYDERABAD BENCH, IN N UMBER OF CASES, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN THE LIGHT OF OBSERVATIONS OF THE HONBLE JURISDICTIONAL HIGH COURT [IN THE CASE OF CIT- II, HYDERABAD VS., M/S. JANAPRIYA ENGINEERS SYNDICA TE 371 ITR 439] WHEREIN THE COURT OBSERVED THAT UNTIL AND UNLESS THE DE CISION OF THE SPECIAL BENCH IS UPSET BY THIS COURT IT IS BINDING ON S MALLER BENCHES AND COORDINATE BENCHES OF THE TRIBUNAL. IN ITA.NOS.16 14, 1622, 1623 & 1624/HYD/2012 DATED 19.01.2015 [IN THE CASE OF ACIT , CENTRAL CIRCLE-2, HYDERABAD VS., M/S. JANAPRIYA PROPERTIES P VT. LTD., HYDERABAD, WHEREIN ONE OF US IS A PARTY] THE TRIBUNA L HAS ANALYSED THE 4 ITA.NOS.663 & 664/HYD/2016 M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., HYDERABAD. ISSUE AND CONCLUDED THAT SECTION 40(A)(IA) CANNOT BE IN VOKED WHERE THE PAYMENTS WERE ALREADY MADE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED FOR IMMEDIATE REFERENCE : 5. HAVING REGARD TO THE DIRECTION GIVEN BY THE HO N'BLE HIGH COURT, THE MATTER WAS POSTED FOR HEARING. THE LEARN ED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE PLACED BEFORE U S THE FOLLOWING ORDERS OF THE ITAT TO SUBMIT THAT THE HON'BLE ALLAH ABAD HIGH COURT IN ITS DECISION IN THE CASE OF CIT V/S. VECTOR SHIP PING SERVICES PVT. LTD. (357 ITR 647) HAS TAKEN A VIEW ON THE ISSUE IN FAVOUR OF THE ASSESSEE IN CONSONANCE WITH THE VIEW TAKEN BY THE I TAT VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERYLIN SHIPPING AND TRANSPORT (SUPRA), AND THE VIEW TAKEN BY THE HON'BL E ALLAHABAD HIGH COURT WAS IMPLIEDLY AFFIRMED BY THE HON'BLE S UPREME COURT BY DISMISSING AN SLP SOUGHT BY THE REVENUE, AND THUS T HE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM DESERVES T O BE FOLLOWED. (A) DECISION OF HYDERABAD BENCH A OF THE TRIBUNAL IN USHODAYA ENTERPRISES LTD. HYDERABAD V/S. DY. COMMISSIONER OF INCOME- TAX CIRCLE 16(2), HYDERABAD (ITA NOS.676/HYD/2009 & 411/HYD/2010 DATED 7.1.2015) (B) DECISION OF MUMBAI BENCH A OF THE TRIBUNAL IN M/S . ARCADIA SHARE & STOCK BROKERS PVT. LTD., MUMBAI V/S. DY. COMMISSIONER OF INCOME-TAX, RANGE 4(1), MUMBAI (ITA NO.1871/MUM/2013 DATED 22.12.2014) 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED THAT THE ITAT HYDERABAD BENCH CONSIDERED AN IDENTIC AL ISSUE AND FOLLOWED THE DECISION OF THE SPECIAL BENCH IN THE C ASE OF MERYLIN SHIPPING AND TRANSPORT (SUPRA). 7. UPON HEARING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE DECISION OF THE ITAT SPECIAL BENCH IS BINDING O N THE TRIBUNAL, PARTICULARLY IN VIEW OF THE CLARIFICATORY ORDER PAS SED BY THE HON'BLE HIGH COURT OF JUDICATURE AT HYDERABAD IN THE INSTAN T CASE, AND THUS, WE RESPECTFULLY FOLLOW THE DECISION OF SPECIAL BENC H IN THE CASE OF MERYLIN SHIPPING AND TRANSPORTS (SUPRA), AND HOLD T HAT THE PROVISIONS OF S.40(A)(IA) CANNOT BE INVOKED WHERE THE PAYMENTS WERE ALREADY MADE BY THE ASSESSEE. WE DIRECT THE A SSESSING OFFICER ACCORDINGLY. IN THE RESULT, APPEALS OF THE REVENUE INSOFAR AS THE ABOVE ISSUE IS CONCERNED, ARE HEREBY DISMISSED. 5 ITA.NOS.663 & 664/HYD/2016 M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., HYDERABAD. 6.1. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD TH E ORDER OF THE CIT(A) AND REJECT THE GROUND URGED BY THE REVEN UE. 7. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DI SMISSED, AS PRONOUNCED IN THE OPEN COURT ON 08 TH DECEMBER, 2016. SD/- SD/- (S. RIFAUR RAHMAN) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 08 TH DECEMBER, 2016. VBP/- COPY TO 1. THE DCIT, CIRCLE-16(2), 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. PRAGATI GREEN MEADOWS & RESORTS LTD., 7-1-28/4 /4, SHAYAM KARAN ROAD, AMEERPET, HYDERABAD. 3. CIT(A)-4, 2 ND FLOOR ANNEXE, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004. 4. PR. CIT-4, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE