ACIT, Jaipur V. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., Jaipur

ITA 759/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5544 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Opportunity of being heard; Diversion of income; Competent authority
• Section: 43B; 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 759/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., SETU BHAWAN, OPP. JHALANA DOONGRI, AGRA BYE PASS, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABCR 9650 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/12/2015 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/01/2016 VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 25/07/2013 OF THE LEARNED C.I.T.(A)-II, JAIPUR FOR A .Y. 2008-09. THE EFFECTIVE GROUNDS OF APPEAL ARE REPRODUCED AS UNDER :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN 2 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. DELETING THE ADDITION MADE BY THE AO BY DISALLOWING THE CLAIM OF RS. 10,00,000/- MADE TO CONTRIBUTION TO ST ATE RENEWABLE FUND DESPITE THE FACT THAT IT WAS APPLICATI ON OF INCOME NOT EXPENDITURE INCURRED FOR BUSINESS EXPEDIENCY. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETIN G THE ADDITION MADE BY THE AO BY DISALLOWING THE CLAIM OF CONTRIBUTION MADE TO GRATUITY FUND OF RS. 19,52,975 /-. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO BY DISALLOWING RS. 13,29,889/- OUT OF PRIOR PERIOD EXPENSES. 4. (I) WHETHER ON THE FACTS AND IN CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN DELETING ADDITION OF RS.2,99,104/- MADE FOR DEPOSIT ING THE EMPLOYEES CONTRIBUTION TO ESI & PF BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIVE AC TS. (II) WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN HOLDING THAT EMPLOYEES CONTRIBUTION TO ESI & PF ARE GOVERNED BY THE PROVISION OF SECTION 43B AND NOT BY SECTION 36(L)(VA) R.W.S. 2(24)(X) OF I.T. ACT. 2. THE ASSESSEE COMPANY IS A STATE GOVERNMENT UNDERT AKING. IT DERIVED INCOME FROM THE ACTIVITIES OF CONSTRUCTION OF ROADS, BRIDGES AND CONSTRUCTION PROJECTS. THE ASSESSEE COMPANY FILED RE TURN ON 29/09/2008 SHOWING NIL INCOME. THE FIRST GROUND OF REVENUES APP EAL IS AGAINST DELETING THE ADDITION OF RS. 10 LACS MADE TO CONTRI BUTION TO STATE RENEWAL 3 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. FUND. THE LD ASSESSING OFFICER OBSERVED THAT THE AS SESSEE COMPANY HAD DEBITED A SUM OF RS. 10 LACS UNDER THE HEAD PAYMENT TO AND PROVISION FOR EMPLOYEES IN THE P&L ACCOUNT, WHICH WAS CONTRIBUTION TO THE STATE RENEWAL FUND. THE ASSESSING OFFICER GAVE REASONABLE O PPORTUNITY OF BEING HEARD ON THIS ISSUE THAT THESE EXPENSES ARE NOT ALL OWABLE U/S 37 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), WHICH WAS AVA ILED BY THE ASSESSEE VIDE LETTER DATED 15/11/2010, THE SAME HAS BEEN REPRODUCED ON PAGE NO. 2 OF THE ASSESSMENT ORDER. AFTER CONSIDERI NG THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HAS HELD THAT THE R EPLY OF THE A/R OF THE ASSESSEE HAS BEEN CONSIDERED AND THE SAME IS NOT FO UND ACCEPTABLE. IT IS TO STATE THAT SOME OTHER CORPORATIONS HAVE THEMSELV ES ADDED CONTRIBUTION TO STATE RENEWAL FUND AS A DISALLOWABLE EXPENDITURE I N THE COMPUTATION OF INCOME SUBMITTED BY THEM. THE PRINCIPLE RELATING TO DIVERSION OF INCOME BY OVERRIDING TITLE ARE: IF A THIRD PERSON BECOMES ENT ITLED TO RECEIVE AN AMOUNT UNDER AN OBLIGATION OF AN ASSESSEE EVEN BEFO RE HE COULD CLAIM TO RECEIVE IT AS HIS INCOME, THERE WOULD BE A DIVERSION OF INCOME BY OVERRIDING TITLE BUT WHEN AFTER RECEIPT OF THE INCO ME BY THE ASSESSEE, THE SAME IS PASSED ON TO A THIRD PERSON IN DISCHARGE OF THE OBLIGATION OF THE ASSESSEE, IT WILL BE A CASE OF APPLICATION OF INCOME BY THE ASSESSEE AND NOT OF DIVERSION OF INCOME BY OVERRIDING TITLE. WHERE A COOPERATIVE SOCIETY 4 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. TRANSFER'S PART OF THE NET PROFIT TO A RESERVE FUND AS A REQUIREMENT OF STATUTE, THE QUESTION ARISES, WHETHER SUCH AMOUNT CO ULD BE ALLOWED EITHER AS A BUSINESS EXPENDITURE OR AS INCOME DIVERTED BY OVERRIDING TITLE. THE TEST IN SUCH CASE IS THE PURPOSE FOR WHICH THE AMOUN T IS SET APART, THE BENEFICIARIES OF SUCH RESERVES AND THE RIGHT OF THE COMPANY OVER SUCH RESERVES. THE JURISDICTIONAL HIGH COURT IN CIT V. JOD HPUR COOPERATIVE MARKETING SOCIETY [2005] 275 ITR 372 (RAJ) CAME TO T HE CONCLUSION THAT SUCH RESERVES UNDER THE CONTROL OF THE SOCIETY WERE FOR THE ULTIMATE BENEFIT OF THE SOCIETY AS WELL AS ITS SHAREHOLDERS, SO THAT SUCH AMOUNT COULD NOT BE EXCLUDED FROM THE INCOME OF THE SOCIETY. HENCE, IT IS CLEAR THAT, TRANSFER TO EDUCATION FUND DOES NOT LEAD TO DIVERSION OF INC OME BY OVERRIDING TITLE; IT IS MERELY, AN APPLICATION OF INCOME. IN VIEW OF T HE FORGOING DISCUSSION, THE TRANSFER OF RS. 10,00,000/- TO THE STATE RENEWAL FUND IS NOT AN ALLOWABLE EXPENDITURE . THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSION MADE. IT IS SEEN THAT THE SIMILAR DISALLOWANCE WAS MA DE IN 5 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. A.Y. 2005-06 AND 2006-07 WHEREIN THE MATTER WHEN UP TO THE ITAT JAIPUR BENCH. THE HONBLE ITAT JAIPUR BENCH I N ITA NO. 233/JP/2009 FOR A.Y. 2006-07 AND ITA NO. 919/JP/2009 FOR A.Y. 2005-06 HAS ALLOWED THE CLAIM O F ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, THE DISAL LOWANCE OF RS. 10,00,000/- MADE BY THE A.O. ON ACCOUNT OF CONTRIBUTION TO STATE RENEWAL FUND IS DELETED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS COVER ED IN ASSESSEES OWN CASE DECISION FOR A.Y. 2005-06 ORDER DATED 16/07/20 10 IN ITA NO. 919/JP/2009, FOR A.Y. 2006-07 ORDER DATED 26/02/201 0 IN ITA NO. 754/JP/2009. THEREFORE, HE PRAYED TO CONFIRM THE ORD ER OF THE LD CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ISSUE IS A LREADY CONSIDERED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN A.Y. 2005 -06 AND 2006-07, WHICH IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THE CASE LAW CITED BY THE AR ALSO SUPPORTING THE ASSESSEES CASE, THEREFO RE, WE UPHOLD THE ORDER OF THE LD CIT(A). ACCORDINGLY, THIS GROUND OF REVENU ES APPEAL IS DISMISSED. 6. THE GROUND NO. 2 OF THE REVENUES APPEAL IS AGAIN ST DELETING THE ADDITION OF RS. 19,52,975/- MADE ON ACCOUNT OF GRAT UITY FUND. THE LD 6 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CL AIMED CONTRIBUTION OF RS. 19,52,795/- MADE TO THE GRATUITY FUND, THE ASSE SSEE WAS ASKED TO FILE THE COPY OF APPROVAL FROM THE COMPETENT AUTHORITY. THE GRATUITY FUND WAS CREATED LONG BACK IN 1977. THE MATTER BEING VERY OLD , THE RELEVANT PAPERS RELATING TO THE APPROVAL OF THE FUND BY CIT WAS NOT A VAILABLE AS SUBMITTED BY THE ASSESSEE. AS PER SECTION 36(1)(V), SUCH PAYM ENT IS ALLOWABLE IF PAID FOR THE APPROVED GRATUITY FUND. HE FURTHER RELIED O N THE DECISION IN THE CASE OF CIT VS. ELECTRA (JAIPUR) P. LTD. (2006) 282 ITR 598 (ALL.). THE FUND HAD NOT BEEN RECOGNIZED BY THE INCOME TAX DEPARTMENT , THEREFORE, HE MADE THE ADDITION TO THAT EXTENT. 7. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSION MADE. IT IS SEEN THAT THE SIMILAR DISALLOWANCE WAS MA DE IN A.Y. 2005-06 AND 2006-07 WHEREIN THE MATTER WHEN UP TO THE ITAT JAIPUR BENCH. THE HONBLE ITAT JAIPUR BENCH I N ITA NO. 233/JP/2009 FOR A.Y. 2006-07 AND ITA NO. 919/JP/2009 FOR A.Y. 2005-06 HAS ALLOWED THE CLAIM O F ASSESSEE ON THE GROUND THAT ASSESSEE HAS ALREADY AP PLIED FOR THE APPROVAL AND THEREFORE THERE IS NO LAPS ON PART OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, THE 7 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. DISALLOWANCE OF RS. 19,52,795/- MADE BY THE A.O. ON ACCOUNT OF GRATUITY FUND IS DELETED. 8. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS TA KEN A SCHEME OF GROUP GRATUITY FROM LIC FOR PAYMENT OF GRATUITY CON TRIBUTION. THE APPLICATION FOR APPROVAL OF GRATUITY SCHEME WAS SUBM ITTED TO THE CIT TO PURSUE THE MATTER, THE ASSESSEE VIDE LETTER DATED 1 2/4/1983 REQUESTED THE ASSESSING OFFICER TO SEND THE REPORT TO THE CIT. A DEED FOR VARIATION WAS ALSO SUBMITTED TO THE CIT ON 27/5/1998 WHEN THERE WAS A VARIATION IN THE GRATUITY SCHEME. THUS, ONLY BECAUSE ASSESSEE DO NOT HAVE A FORMAL LETTER OF APPROVAL OF THIS FUND FROM THE CIT WHEN IT HAS DI SCHARGED ITS OBLIGATION TO GET IT APPROVED, HE CANNOT BE MADE TO SUFFER ON INACTION ON THE PART OF THE CIT TO MAKE NECESSARY ENQUIRY TO ASCERTAIN THE F ACT.. HE FURTHER SUBMITTED THAT THIS ISSUE IS COVERED IN ASSESSEES OWN CASE DECISION FOR A.Y. 2005-06 ORDER DATED 16/07/2010 IN ITA NO. 919/ JP/2009, FOR A.Y. 2006-07 ORDER DATED 26/02/2010 IN ITA NO. 754/JP/20 09. HE ALSO RELIED ON THE DECISION IN THE CASE OF CIT VS. TEXTOOL CO. LTD. (2013) 216 TAXMAN 327 AND JAISALMER CENTRAL CO-OPERATIVE BANK LTD. VS . JCIT (2013) 158 TTJ 0001. THEREFORE, HE PRAYED TO CONFIRM THE ORDER OF T HE LD CIT(A). 8 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ISSUE IS A LREADY CONSIDERED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN A.Y. 2005 -06 AND 2006-07, WHICH IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THE CASE LAW CITED BY THE AR ALSO SUPPORTING THE ASSESSEES CASE, THEREFO RE, WE UPHOLD THE ORDER OF THE LD CIT(A). ACCORDINGLY, THIS GROUND OF REVENU ES APPEAL IS DISMISSED. 10. THE 3 RD GROUND OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITION OF RS. 13,29,889/- OUT OF PRIOR PERIOD EXP ENSES. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IN AUDIT REPORT HAD SHOWN PRIOR PERIOD EXPENSES OF RS. 13,29,889/- THE TOTAL AMOUNT IN RES PECT OF PRIOR YEAR EXPENSES. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS, WHICH WAS AVAILED BY THE ASSESSEE VIDE LETTER DATED 24/10/2009. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT ALL THESE EXPENSES WERE CRYSTALLIZED DURING THE YEAR AS GOT APPROVED BY THE RESPECTIVE OFFICERS IN THE YEAR UNDER CONSID ERATION. THE ASSESSEE CORPORATION IS HAVING VARIOUS SITES WHERE PROJECT WOR K IS UNDERGONE. SOME EXPENSES REMAINED UNPOSTED DUE TO NON RECEIPT OF BI LLS OR NON-PASSING OF BILLS OR DUE TO SOME OTHER REASON. THE HONBLE ITAT J AIPUR BENCH IN THE CASE OF RIICO LTD., RSEB AND VARIOUS OTHER CASES HE LD THAT PRIOR PERIOD EXPENSES IS ALLOWABLE IN THE YEAR IN WHICH SANCTION H AS BEEN RECEIVED AND 9 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. EXPENSES HAS BEEN BOOKED. AFTER CONSIDERING THE ASS ESSEES REPLY, THE LD ASSESSING OFFICER HAS HELD THAT THE EXPENSES CLAIME D BY THE ASSESSEE ARE CONTRARY TO THE METHOD OF ACCOUNTING REGULARLY FOLL OWED BY THE ASSESSEE. THE ASSESSEE COMPANY WAS FOLLOWING THE ACCRUAL SYSTEM OF ACCOUNTING. THE ASSESSEE SHOULD HAVE CLAIMED THESE EXPENSES ON T HE BASIS OF ACCRUAL. THE LD ASSESSING OFFICER RELIED ON THE DECISION OF H ON'BLE MARDAS HIGH COURT IN THE CASE OF DEVI FILMS (P) LTD. VS. CIT (19 70) 75 ITR 301 WHEREIN TRADING LOSS OF PREVIOUS YEAR HAS NOT BEEN ALLOWED I N SUBSEQUENT YEAR. THE ASSESSEE HAS CLAIMED THESE EXPENSES ON CASH BASIS. IT IS NOT OPEN TO THE ASSESSEE TO CLAIM PRIOR PERIOD EXPENSES ON CRYSTALL IZED BASIS. ACCORDINGLY BE MADE DISALLOWANCE OF RS. 9,34,554/-. 11. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUB MISSION MADE. IT IS SEEN THAT THE ASSESSEE IS A STATE GOVER NMENT UNDERTAKING WHERE THERE IS PRESCRIBED RULE FOR MAKI NG PAYMENT OF EXPENDITURE. THE EXPENSES ARE BOOKED ONLY AFTER THEY ARE APPROVED BY THE APPROPRIATE AUTHORITY. FOR THESE RE ASONS, THE EXPENDITURE PERTAINING TO A PARTICULAR YEAR MAY GET APPROVED IN SUBSEQUENT YEARS AND ACCORDINGLY ENTERED IN THE BOOKS F 10 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. ACCOUNTS IN THAT YEAR. THERE IS NO DOUBT REGARDING T HE GENUINENESS OF THE EXPENDITURE. AS PER THE REGULAR SYSTEM OF ACCOUNTING ALL EXPENSES ARE ACCOUNTED AFTER GETTING APPROVAL FROM CONCERN AUTHORITIES. HONBLE ITAT JAIPUR BENCH IN VARIOUS CASES OF STATE GOVERNMENT UNDERTAKING I.E. RIICO, R SEB, RSMDC, RBCC IS CONSISTENTLY TAKING A VIEW TO ALLOW SU CH EXPENDITURE IN THE YEAR WHEN THE EXPENSES ARE FINALL Y SANCTIONED AND APPROVED. THE NATURE OF THE ASSESSEE S EXPENDITURE IS SAME. FOLLOWING THE DECISION OF THE I TAT JAIPUR BENCH IN THE VARIOUS GOVERNMENT ORGANIZATION, THE S AME IS ALLOWED AND ACCORDINGLY DISALLOWANCE OF RS. 13,29,889 /- MADE BY THE AO IS DELETED. SO FAR AS THE ALTERNATIVE GRO UNDS OF ALLOWING THE PRIOR PERIOD EXPENDITURE IN EARLIER YEA R OR EXCLUDING THE PRIOR PERIOD INCOME IS CONCERNED, THE SAME IS DISMISSED AS I HAVE ALREADY ALLOWED THE CLAIM OF PRI OR PERIOD EXPENSES. 12. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS COVER ED IN FAVOUR OF THE ASSESSEE BY ITAT ORDER IN THE CASE OF RAJASTHAN STAT E SEEDS CORPORATION LTD. IN ITA NO. 307/JP/2009 ORDER DATED 21/08/2009 FOR A.Y. 2006-07. HE ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COUR T IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. 358 ITR 295. THEREFORE, HE PRA YED TO CONFIRM THE ORDER OF THE LD CIT(A). 11 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. 13. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE S CASE IS COVERED BY THE COORDINATE BENCH DECISION IN THE CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD. IN ITA NO. 307/JP/2009 ORDER DATED 21/08/2009 FOR A.Y. 2006-07. FURTHER THE HON'BLE SUPREME COURT DECISION IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. (SUPRA) IS ALSO RELEVANT AS THERE IS NO REVENUE LOSS IN ALLOWING THE PRIOR PERIOD EXPENSES IN SUBSEQUENT YEAR. THE GENUINENESS OF THE EXPENSES HAVE NOT BEEN DOUBTED BY THE LOWER A UTHORITIES. THEREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). ACCO RDINGLY, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 14. THE 4 TH GROUND OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITION OF RS. 2,99,104/- MADE ON ACCOUNT OF EMPL OYEES CONTRIBUTION AND ESI BEYOND THE PRESCRIBED TIME LIMIT. THE LD ASS ESSING OFFICER OBSERVED THAT AS PER AUDIT REPORT, THE ASSESSEE COM PANY FAILED TO DEPOSIT THE EMPLOYEES ESI CONTRIBUTION AMOUNTING TO RS. 2,9 9,104/- IN RESPECT OF VARIOUS UNITS/BRANCHES WITHIN THE PRESCRIBED TIME LI MIT AS PER PROVISIONS OF LIMITATION ACT. ACCORDINGLY HE MADE ADDITION U/S 36 (1)(VA) READ WITH SECTION 2(24)(X) OF THE ACT. 12 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. IN FIRST APPEAL, THE LD CIT(A) HAD ALLOWED THE APPEA L ON THE GROUND THAT THE HONBLE ITAT JAIPUR BENCH IS CONSISTENTLY H OLDING THAT CONTRIBUTION TO PF IS DEPOSIT PRIOR TO DATE OF FILING OF RETURN THEN THE SAME IS ALLOWABLE. IT IS A FACT THAT ESI PAYMENT HAD BEEN MADE BEFORE DUE DATE OF RETURN IN THE ASSESSEES CASE. HE RELIED ON THE DECISION OF H ONBLE ITAT, JAIPUR BENCH IN THE CASE OF DCIT VS AMIT BASU ITA NO. 765/J P/2011 DATED 25/01/2012 AND THE HONBLE BENCH ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT THE OUTSET, THE LD AR OF THE ASSESSEE H AS RELIED ON THE FOLLOWING DECISIONS: (I) CIT VS SBBJ (2014) 363 ITR 70 (RAJ.) (II) CIT VS. JVVNL (2014) 363 ITR 307 (RAJ) (III) CIT VS UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. (2014) 366 ITR 163) (RAJ) HE HAS SUBMITTED THAT THE ABOVE JUDICIAL PRONOUNCEM ENTS ON ALLOWABILITY OF DEDUCTION OF EMPLOYEES CONTRIBUTION TO PF AND O THER FUNDS AFTER THE DUE DATES IN RESPECTIVE STATUTE BUT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, CIT(A) HAS RIGHTLY DELETED THE ADDITION. THEREFORE, HE PRAYED TO CONFIRM THE ORDER OF THE LD CIT(A). 13 ITA NO. 759/JP/2013 ACIT VS M/S RAJASTHAN STATE ROAD DEVLP. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE H AD PAID ESI AND PF BEFORE DUE DATE OF FILING OF RETURN OF INCOME TAX. THE CASE LAWS CITED BY THE AR ARE SQUARELY APPLICABLE ON FACTS AND CIRCUMS TANCES OF THE CASE. THEREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). 15. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 TH JANUARY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD., JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 759/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR