ACIT Corporate, Cochin V. M/s.Kerala State Civil Supplies Corporation Ltd, Cochin

ITA 79/COCH/2015

• Counselvise Citation: 7921914 RSA 2015
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: RADHESHA BHATT
• Section: 43B; 28; 139

Judgement Text

ITA NO.79/COCH/2015 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & GEORGE GEORGE.K , JM ITA NO . 79/COCH/2015 (ASST YEAR 2009 - 10 ) THE ASST COMMR OF INCOME TAX CORPORATE CIRCLE 1(2), KOCHI VS M/S THE KERALA STATE CIVIL SUPPLIES CORPORA TION LTD MAVELI BHAVAN GANDHI NAGAR KADAVANTHRA KOCHI 682 020 ( APP ELLANT ) (RESPONDENT) PAN NO. AAACK6767F ASSESSEE BY SH RADHESHA. BHATT REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 17 TH SEPT 2015 DATE OF PRONOUNCEMENT 21 ST SEPT 2015 OR D ER PER GEORGE GEORGE.K JM : THIS APPEAL AT THE INSTANCE OF THE REVENUE IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 30.9.2014. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. 2 THERE IS A DELAY OF 8 DAYS IN FILING THIS APPEAL. AN AFFIDAVIT HAS BEEN FILE D BY THE ASST COMMR OF INCOME TAX EXPLAINING THE REASONS FOR THE DELAY IN FILING THE APPEAL. ON PERUSAL OF THE REASONS STATED IN THE AFFIDAVIT, WE FIND THE DELAY CAUSED IN FILING THE APPEAL IS ON ACCOUNT OF SATISFACTORY REASONS AND WE CONDONE THE SAME AN D PROCEED TO DISPOSE OF THE MATTER ON MERIT, 3 THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN ALLOWING THE DEDUCTION U/S 36(1)(VA) OF THE I T ACT WHEN THE EMPLOYEES CONTRIBUTION TO GPF WAS NOT REMITTED WITHIN THE SPECIFIED TIME LIMIT . 4 THE BRIEF FACTS THAT ARE NECESSARY FOR THE DISPOSAL OF THIS APPEAL ARE AS FOLLOW: ITA NO.79/COCH/2015 2 THE ASSESSEE IS A KERALA GOVERNMENT UNDERTAKING ENGAGED IN THE BUSINESS OF DISTRIBUTING ESSENTIAL COMMODITIES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 29.9.2009 DECLARING NIL INCOME AFTER SETTING OFF OF BROUGHT FORWARD LOSS . THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY AND THE SCRUTINY ASSESSMENT WAS COMPLETED VIDE ORDER DATED 23.12.2011. THE AO , IN THE SCRUTINY ASSESS MENT, DISALLOWED A SUM OF RS. 1,46,82,040/ - BEING THE AMOUNT RECEIVED BY THE ASSESSEE FROM ITS EMPLOYEES AS CONTRIBUTION TO GENERAL PROVIDENT FUND. THE DISALLOWANCE WAS FOR THE REASONS THAT THE SAID AMOUNT WAS NOT REMITTED BEFORE THE DUE DATE MENTIONED I N EXPLANATION TO SECTION 36(1)(VA) OF THE I T ACT 1961. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL TO THE F IRST APPELLATE AUTHORITY. THE CI T(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT FINDINGS OF THE CIT(A) READ AS UNDER: 5.3 I HAVE GONE TH ROUGH THE FACTS OF THE CASE, ASSESSMENT ORDER, ASSESSEES SUBMISSIONS IN THIS REGARD AND THE LEGAL POSITION AS IT EXISTS. IT IS NOW HELD BY VARIOUS HIGH COURTS THAT ESI/PF CONTRIBUTIONS, IF THEY WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN, THEN NO DI SALLOWANCE SHOULD BE MADE ON THIS ACCOUNT. THE DELHI HIGH COURT HAS HELD IN THE CASE OF CIT VS AIML LTD 321 ITR 508 THAT EMPLOYERS CONTRIBUTION AS WELL AS EMPLOYEES CONTRIBUTION TOWARDS PF AND ESI DEPOSITED AFTER THE DUE DATE, AS PRESCRIBED UNDER THE RELE VANT RULES BUT BEFORE THE DUE DATE FOR FILING THE RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVISIONS OF SEC. 43B AS AMENDED BY THE FINANCE ACT 2003. 6 REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. THE LD DR SUBMI TTED THAT THE ISSUE IN QUESTION IS COVERED BY THE RECENT JUDGMENT S OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE S OF ; (I) CIT VS SOUTH INDIA CORPORATION LTD REPORTED IN (2015) 58 TAXMANN.COM 208(KERALA) & (II) CIT VS MERCHEM LTD . , REPORTED IN (2 015) 61 TAXANN.COM 119(KERALA) 7 ON THE OTHER HAND, THE LD COUNSEL FOR THE ASSESSEE HAS GIVEN A BRIEF NOTE, THE RELEVANT PORTION OF WHICH READ AS UNDER: IT IS SUBMITTED THAT, NO DISALLOWANCE OUGHT TO HAVE BEEN MADE SINCE THE PROVIDENT FUND RECOVERED WERE REMITTED EITHER BEFORE THE YEAREND OR IN THE SUCCEEDING MONTHS ITSELF , BEFORE THE DUE DATE OF FILING OF RETURNS IN ALL CASES. THE DETAILS OF ACTUAL DATES OF REMITTANCE ARE ENCLOSED AS ANNEXURE 1. ITA NO.79/COCH/2015 3 IT IS NOW SETTLED THAT IF THE CONTRIBUTION FROM EMPLOYEES IS REMITTED TO THE AUTHORITY BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, SUCH AMOUNTS SHOULD BE ALLOWED AS DEDUCTION. IT IS FURTHER SUBMITTED THAT, IT IS NOT CORRECT TO STATE THAT THE DECIS I ON I N THE CASE OF CIT V. AIMIL LTD WAS RENDERED IN T H E CO N TE X T OF PRO VI S I O N S O R SEC . 4 3B O F THE I T AC T . I N FACT , T H E DEC I S I O N WAS SPECIALLY ON ALLOWABILITY OF EMPLOYEES SHARE OF PF, IF REMITTED AFTER DUE DATES SPECIFIED IN THE RESPECTIVE ACT . HOWEVER , THE HON BLE HIGH COURT IN THE SAID DECISION HAVE MADE REFEREN CE TO THE AMENDMENTS TO THE PROVISIONS OF SEC . 43 B MADE IN THE FINANCE ACT 2003. THE RESPONDENT FURTHER SUBMITS THAT THE CIT (A) HAS RIGHTLY R ELIED ON THE DECISION OF THE HON BLE HIGH COURT OF KERALA (JURISDICTIONAL HIGH COURT) IN THE CASE OF KERALA S TATE WAREHOUSING CORPORATION LIMITED IN WHICH CASE, THE HIGH COURT HAS HELD THAT IF THE CONTRIBUTION TO PF IS REMITTED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME , IT IS SUFFICIENT COMPLIANCE OF PROVISIONS OF SEC. 43 B OF THE ACT (COPY OF THE DECI SIONS ENCLOSED AS ANNEXURE 2) . IN THIS DECISION, THE HONB LE KERALA HIGH COURT HAS RELIED ON THE DECISION OF THE APEX COURT IN THE CASE OF CIT V . VINAY CEMENTS (213 CTR 268). FOLLOWING THE ABOVE DECISION OF THE JURISDICTIONAL HIGH COURT, WHICH IS BINDING, THE CLAIM ALLOWED BY THE CIT (A) MAY KINDLY BE SUSTAINED . THE RESPONDENT PLACES RELIANCE ON THE FOLLOWI NG DECISIONS ALSO ON IDENTICAL ISSUES. CIT VS NIPRO POLY FABRICS LTD - 350 ITR 327 (HIMACHAL HE). CIT VS AIMIL LTD (DEL) - 3211TR 508 CIT VS. SABARI E NTERPRISES - 298 ITR 141 (KARNATAKA HE) CLT VS KICHHA SUGAR COMPANY LTD - 356 ITR 351 (UTTARAKHAND HE) CIT V. VIJAY SHREE LTD (CALCUTTA HIGH COURT) CI T VS . JAIPUR V I D YUT VITRAN NIGAM LTD (RAJASTHAN HIGH COURT) / ' 8 WE HAVE HEARD THE RIVAL CONTENT IONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY , IN THIS CASE , THE DISALLOWANCE MADE IS WITH REFERENCE TO THE EMPLOYEES CONTRIBUTION TO GPF . THE ASSESSEE HAS GIVEN THE REMITTANCE DATE OF THE EMPLOYEES CONTRIBUTIONS , WHICH IS BEFORE THE DATE OF FILING OF RETURN U/S 139(1) OF THE ACT. HOWEVER, THE REMITTANCE IS ADMITTEDLY BEYOND THE DUE DATE MENTIONED IN SEC. 36(1)(VA) OF THE ACT. T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE S OF CIT VS SOUTH INDIA CORPORATION AND CIT VS MERCHEM LTD (SUPRA) HAS CATEGORICALLY HELD WITH REFERENCE TO EMPLOYEES CONTRIBUTION IN ORDER TO CLAIM IT AS A DEDUCTION, THE SAME HAS TO BE REMITTED WITHIN THE DUE DATE SPECIFIED UNDER SECTION 36(1)(VA) OF THE ACT. THE RELEVANT FINDINGS OF THE HONBLE JURISDICTIONAL HIGH CO URT IN THE CASES OF SOUTH INDIA CORP ORATION LTD.(SUPRA) READ AS UNDER: 4. G O I N G B Y THE M A T E RI A L FINDIN GS OF F AC T S, IT CA NN O T B E DI S PUTED THAT TH E PA Y M E NT S WE R E M A D E B Y TH E AS S E SS EE A F T E R TH E D A T E B Y W HI C H TH E A SSESSEE WAS R E QUIR E D A S T H E E MPL OYE R T O C R E D I T AN E MP L OYE E 'S C O NTR I BUTI O N T O TH E E MPL O Y EES' AC CO UNT IN TH E P ROV I DE NT F UND . T HER EF O R E, I N TE R M S O F T H E EX P L A N A TI O N T O C L A U SE ( VA ) OF SEC TI O N 36 ( I ) O F TH E IN CO M E TAX AC T , S UCH S UM S P A I D A F T E R T H E DU E D A T E C A NN O T B E CL A IME D AS O THER ITA NO.79/COCH/2015 4 D E DUCTI O N S IN T E RM S O F SEC TI O N 36 O F TH E INC O M E T AX AC T . T HI S I S P O I N TE DL Y SO B E CA U S E IN TERM S OF S EC TI O N 4 3 B O F T H E IN C O ME TAX AC T , DE DUCTI O N S A R E TO BE O NL Y O N AC T U A L P AY M EN T . T H ESE T WO PR OV I S I O N S WE R E C O N S I D E R E D B Y TH E H O N ' BL E A NDHR A PR A D ES H HI G H C O U RT I N HIT EC H ( I NDIA ) ( P . ) LTD . V. U NION OF I NDIA L19 97] 2 2 7 I T R 44 6 / 94 T AX MA N 454 IN W HI CH IT WAS H E LD TH A T A CO MB INE D R EA DIN G OF C L A U SE (VA ) O R S EC T I O N 36 ( I ) AND S EC TI O N 43B O F TH E I NC O ME T AX AC T M AKE S IT C L EA R TH A T I F TH E A S S E SS EE (E MPL OYE R ) C R EDITED A N Y S UM R ECE I VE D B Y H I M F R O M A N Y O F H I S E M PL OYEES O N O R B E F O R E TH E D U E DA TE, TH A T I S , TH E D A T E B Y W HI C H TH E A SS E S SEE ( E M P L OYER) I S R EQ UIR ED T O CRED IT TH E E M P L OY E E S' C O N T R IBUTI O N T O THE E MPL O Y EE S' A CC O UNT IN TH E R E L EVA NT F UND ( IN C LUDIN G TH E P R O V ID EN T F U ND ) , HE W IL L BE E NTITL E D T O D E DUCT TH E SA ID A M O UNT IN C O MPUT I N G HI S BU S INE SS IN CO M E. BUT , SE CTI O N 43 B C O NTR O L S TH E A LL O WA BILIT Y O F DEDU C TI O N O R P AY MENT S PECIFI E D IN C LAU S ES (A) T O ( D ) TH E R EOF A N D PR O VIDE S C ERT A IN C O NDITION S S UBJECT T O WHICH A L O N E TH E D E DU C TI O N S M A Y BE P E RMI S S IBL E . E NU N C I A TI N G TH E P O I NT . IT W A S HELD THAT DEDUCTION W O ULD B E AVA IL A BL E O NL Y IF TH E R E MITT A NC E T O TH E F UND I S M A D E W I T HIN TH E D U E DA T E FI XE D FOR MAKING SUCH REMITT A N CE INT O THE FUND ; IN TH E C ASE IN H A ND , THE PR OV ID E NT F UND . S O M UC H SO , TH E QUE S TI O N REFERRED IS T O BE ANSWERED IN FAV O UR O F TH E REVENUE. HENCE W E A N SWE R TH E R E F E R E N CE B Y HOLDING THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION OF THE BELATED PAYMENT TO THE PROVIDENT FUND IN VIEW OF THE PROVISIONS OF THE EXPLANATION TO CLAUSE (VA) OF SECTION 36(1) AND 43B OF THE INCOME TAX ACT, IN THE LIGHT OF THE LAW LAID IN HITECH (INDIA) P LTDS CASE (SUPRA) 9 FURTHER, THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MERCHEM LTD (SUPRA) FOLLOW ING THE JUDGMEN T OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS GUJARAT STATE ROAD TRANSPORT CORPORATION REPORTED IN 366 ITR 179(GUJ) HAVE ELABORATELY E XAMINED THE ISSUE AND DECIDED THE MATTER IN FAVOUR OF THE REVENUE. THE RELEVANT FINDINGS OF THE HONBLE JURISD ICTIONAL HIGH COURT IN THE CASE OF MERCHEM LTD (SUPRA) READ AS UNDER: 18. ON A READIN G O F SEC . 36 ( I )(VA), W H A T WE F IND I S THAT A N Y S UM R E CEIVED BY TH E ASSESSEE F R O M HI S E M PL OY EE S T O W HICH TH E PR O VI S I O N S OF S UB - C L A U SE (X ) O F C L A U S E ( 2 4) OF SEC.2 APPLY WAS CRED I TED BY TH E A SS E SSE E T O TH E EMPL O YEES ' ACC O UNT IN THE REL E VANT FUND O R F UND S O N O R B E F O RE TH E DU E DAT E PR E S C RIB ED UND E R EXPLANATION I TO SEC . 36( I )(V A), I S ENTITLED T O DEDUCTI O N . ACC O RDIN G T O U S, IT THU S M EA N S TH AT S E C .36( I )(V A ) TAK ES CARE O F CO NTRIBUTI O N RE CE I V ED O N A CCO UNT O F TH E E MPL OYEES A ND C R EDI T E D BY THE ASS E SSE E T O TH E EMPL OY EE S' AC C O UNT IN THE REL EVA NT F UND O R FUND S O N OR BE F O R E TH E DU E D A T E AS P R OVIDE D UNDER THE RELEVANT S TATUTE AL O NE WILL BE ENTITLED T O GET DEDU C TI O N . IN THI S CO NT EX T , TH E D EF INI T I O N OF INCOME CONTAINED UNDER SEC . 2(24) (X) IS RELEVANT , WHICH READ THU S: ' AN Y SUM RECEIVED B Y THE ASSESSEE FROM HIS EMPLOYEES AS C O NTRIBUTION S T O A N Y PR OV IDENT FUND ON S UPERANNUATI O N FUND OR AN Y FUND SET UP UNDER THE PRO V ISI O N S O F THE E MPL OYEES' S T A T E IN S UR A NC E ACT , 1948 (34 OF 1948) , O R A N Y OTHER FUND F O R TH E WELFARE OF S UCH EMPL OY EE S.' 19. THEREFORE, INCOME OF THE ASSESSEE INCLUDED ANY SUM RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEE AS CO NTRIBUTI O N T O AN Y PROVIDENT FUND O R S UPERANNUATI O N FUND O R FUND S SE T UP UND E R TH E P R OV I S I O N S OF TH E E MPL OY EE S' STATE IN S URANCE A C T , 1948 ( 34 O F 1 9 48 ) O R AN Y O THER F UND FO R TH E WE L FA R E O F S UCH E MPLO Y EE S. A CC O RDIN G T O U S, O N A RE A DIN G OF S E C .3 6 ( 1 )(VA) A L O N G W ITH SCC.2(24)(X), IT I S CA T EGO RI C A N D CLEAR TH AT THE CONTRIBUTION RECEIVED B Y THE A SS E S SEE FR O M THE EMPL OY EE AL O NE W AS TREATED AS INC O M E FOR THE PURPO S E OF ITA NO.79/COCH/2015 5 SE C.3 6 ( I ) ( V A) OF TH E A C T A ND TH E R E F O R E W E A R E O F TH E CONSIDERED OPINION T H A T THE A SS E SS EE WAS E NTITLED T O GE T DEDU C TI O N FO R TH E S UM R ECEIVE D B Y TH E ASSESSEE F R O M HI S E MPL OYEES TOWARDS CO NTRIBUT IO N T O TH E FUND O R F UND S SO M E NTI O N ED O NL Y IF TH E SA ID A M O UN T WAS CREDI T ED BY T HE ASS E SSE E ON O R B E F O RE TH E DUE D A T E T O THE EMPL OYEES A C CO UNT I N TH E REL EV ANT FUND A S PR OV I DE D UN DE R EXPLA N A TI O N 1 TO S EC . 36( I )(VA) OF THE ACT . ACCORDING T O US, S O FAR A S SEC . 43B (B) IS CONCERNED, IT TAKE S C A R E O F O NL Y THE CO NTRIBUTION PAYABLE BY THE EMPLOYER / ASSESSEE TO THE RESPECTIVE FUND . TH E REF O RE , IN THAT C IR C UM S T A N CES S E C. 36 ( 1) ( V A) AND SEC . 43B ( B ) O PER A TE IN DIFFERENT F IELD S I.E . THE F O RMER TAK ES CA R E OF E MPL OYEE'S CO NTRIBUTI O N AND THE LATTER EMPL OY ER 'S C O NTRIBUTI O N. TH E A S SE SSEE WAS E NTITL E D T O GE T T H E BEN EFI T OF DEDUCTION UNDER SEC . 43B ( B ) AS PR O VIDED UNDER THE PR O VIS O THERET O O NL Y W ITH R EGA RD T O THE P O RTI O N OF TH E A M O U NT PAID BY THE EMPLO Y ER T O THE CONTRIBUTORY FUND . SUCH AN UND E R S T A NDING OF SE C . 43 B I S FURTHER EX EMPLIFIED B Y THE PHRASEOLO GY U S ED IN THE PR O VIS O, WHICH READS THU S: ' PR OV ID E D THAT N O THIN G C O NT A IN E D IN THI S SE C TI O N S H A LL A PPL Y IN R E L A TI O N T O A N Y SU M W H IC H IS A CTUALL Y PAID B Y THE ASS E SSEE O N O R B E F O R E THE DUE D A TE A PPLIC A BL E I N HI S CASE FO R F URNI S HI NG TH E RETURN O F IN CO ME UND E R S UB - SE CTI O N (I ) OF S EC T I O N 1 39 IN R ES P E CT O F TH E PR EV I O U S YEAR IN W HI C H THE LI A BILIT Y T O P AY S U C H S UM WAS IN C URR E D AS A F O R ESA ID A N D TH E EV I DE N CE OF S U CH P AYMEN T I S FURNI S H ED BY TH E ASSESSEE A L O N G W ITH S U C H R E TURN .' F URTH E R , IN EX PLAN A TI O N I T O S EC . 43 B A L SO TH E PHRA SEO L OGY U S ED P E R S U A D E U S T O TH INK TH A T SEC. - 43B CAN BE A PPLI E D T O THE C O NTRIBUTI O N PA Y ABL E B Y TH E A S S E SS EE A S A N EMPL OY ER, WHICH R E AD S THU S: FOR THE REM O VAL OF DOUBT S, IT I S HEREB Y DECLARED TH A T WH E RE A D E DUCTI O N I N R ES P EC T OF A N Y SUM REFERRED TO IN C L AUSE (A) OR CLAUSE (B) OF THIS SECTION IS ALLOWED IN C O MPUTING TH E INC O M E REFERR E D TO IN SECTION 28 O F THE PRE V I O US Y EA R ( BEING A PREVIOUS Y EAR REL E VANT T O TH E A SSESS MENT YE A) CO MMENCING O N THE IST D AY O F APRIL , 1 9 8 3 O R A N Y EA RLIER ASSESS MENT Y E A R ) IN W HI C H T H E LI A BILIT Y TO PAY SUCH SUM W A S INCURR ED B Y T HE ASSESS EE, TH E ASSESS EE S HALL N O T B E E NTITL ED T O ANY DE DU C TI ON UNDER THIS SECTION IN RESPECT OF S UCH S UM IN C O MPUTIN G TH E INCOM E O F TH E PR EV I O U S YEA R IN W HICH THE SUM IS ACTUALLY PAID B Y HIM . ' ITA NO. 79/COCH/2015 1 T H E R E F O RE , A C CO RDIN G T O U S, S INC E THE R ES P O ND E NT H AS A DMITT E DL Y N O T P A ID TH E D ED U C T IO N SO MA D E W ITHI N THE DUE D A TE A S PR O V IDED UND E R SE C.3 6( I )(VA), TH E R ES P O ND E NT WAS N O T E NTITL ED T O GE T D ED U C TI O N O R TH E AM O UNT S DEDUCTED THER E UN D ER FO R A ND O N BEH A L F OF TH E E MPL OY E ES . 20. IN V I EW O F TH E R E LI A N C E PL ACE D B Y V AR IO U S HI G H CO UR TS IN 'ALOM EXTRUSIONS' (SUPRA ), TO ARRIVE A T A CO N C LU S I O N TH A T TH E ASSESS EE S TH E R E IN WER E L IA BL E T O P AY B O TH THE EMPL OYEES AS WE LL AS E MPL OYE R ' S CO NTRIBUTI O N O N O R BEF O RE FILIN G O F RETURN UND E R SEC. 1 39( I ) O NL Y, WE TH O U G HT T H A T IF 'AL OM EX TRU S I O N S' (S UPRA) I S DISCUS S ED IN DETAIL ; TH E QUE S TION R A I SE D IN THI S CASE CA N B E M ADE C L EA R . IN PA R AG RAPH 3 O F THE SA ID JUD G M E NT , THE QUE S TI O N CO N S ID E RED WAS FOR MUL A T E D AS FO LL OWS: '3 . A S H O RT QU ES T IO N W H IC H AR I SES FO R DETERM IN AT I O N I N TH I S B A T C H OF CIVI L APPEAL S I S WHE TH ER O M ISSION (DELETI O N ) OF T HE S ECOND PROVI SO T O S EC T ION 43B O F T HE I NC O ME - TAX ACT . 1961 BY T H E FI N ANCE AC T 2003 O P ERATED WITH EFFECT FROM 1 S T APRI L . 2004 O R WHET H ER IT O PER A TED RE TR OSPEC T IVELY W ITH E F FEC T FRO M 1S T A PR I I . 1988 ? '. 21 . T H E R EFO R E, T H E QU ES TI O N TH A T WAS CO N S ID ERED I N ALOM EX T RUSIONS' CA SE' WAS WHET H ER O M ISSIO N OF SECO ND PR OV IS O T O SE C . 43B O F TH E IN CO ME TAX AC T B Y T H E F IN A N CE AC T , 2003 O P ERA T ED WITH EFFECT FROM 1S T APRIL , 2004 OR R E TR OS PECTIV E L Y WITH EFFE C T F R O M 1 S T A PRIL , 1 9 88. T H E R EFO R E, TH E QU E S T IO N R A I SED IN THI S APPEAL HA S NOTHIN G TO DO WITH THE QUESTI O N CO N S IDER E D IN TH E S AID D EC I S I O N . IT I S T RU E TH AT SEC . 2 (24 , (X) AS W ELL AS SEC . 36 ( I ) ( VA ) WERE DI S CUSS E D IN P ARAG RAPH S 10 A ND II OF TH E S AID J UD G M EN T . B U T I T WAS FOR TH E SO L E PURP OS E OF UNDER S T A NDIN G THE SC H E M E OF THE I NC OME TAX A C T , 1 96 1 AS I T EXISTED PR IO R T O 1 ST A PRIL , 1 984 A ND AS IT S T OO D A FT E R I S T APRIL , 1 9 8 4. AFTE R DI SC U SS IN G TH E AFO R ESA ID PR OV I S I O N S AN D SEC . 43 B THE A P EX CO URT H E LD IN P A R AG R A PH 14 OF T HE J UD G M E N T AS FOL L OWS : ' 1 4. ON RE ADIN G T H E A B OVE PR OVIS I O N S , I T BECO M ES CL EA R T H AT THE ASSESSEE( S ) - EMPLO YER ) WOU LD BE E NTITL E D TO D E DU CT I O N O NL Y IF TH E CO NTRIBU TIO N STA ND S CRE DIT E D O N OR BEFORE T H E D U E DATE GIVE N IN THE PR OV ID E NT FUND AC T . H OWEVE R , TH E SECO N D PR OV I SO O N CE AGA IN C R EA T ED FURTH ER DI FF I C UL TIES. IN MANY O F TH E C O MPA NI ES, FINANCI A L YEA R E NDED O N 3 1 S T M A R C H , W HI C H D I D NO T COI N C ID E W ITH TH E ACCO UNTING PERI O D O R R .P.F.C. FO R EXA MPL E, I N M ANY CA S E TH E T IM E T O M AKE CO NT RI B U TI ON T O R . P .F . C ENDED AF T E R DU E D A T E OF F ILIN G OR RE TU RNS. T H ER E F O RE, TH E I ND U S T R Y ONCE AGAIN MA D E REPRE S EN T A T ION T O TH E M INI S TR Y O F F IN ANCE A ND TA KIN G COG N IZA N CE OF TH IS D I FF I C UL TY, TH E PAR L IAM E NT IN S ERTED O N E MORE A M E NDM E NT VI D E F IN A N CE AC T 2003 , W H ICH, AS S T A T E D A B OVE, CAME I N T O F O RCE W.E.F . I S T APRIL 2004. IN O TH E R WO RD S, A FT E R I S T A PR I L , 2004 , TWO C H A N GES WE R E MADE, NA M E L Y, DELETION O F THE SECOND PR OVISO A ND F URTH E R A M E NDM E NT I N THE F I RST PR OV I SO , Q U O T E D A B OVE. B Y T H E FINA N CE ACT 2003, T H E A M E ND ME NT M A D E IN TH E F IR ST PR OV I SO EQU A T E D IN T E RM S ITA NO. 79/COCH/2015 2 OF TH E B E N EFI T OF DE DU CTIO N OF TAX, DUTY, CESS A ND F EE O N TH E O N E H A ND W ITH CO NTRIBUTI O N S TO E MPL OYEES ; PR OV ID E N T F UN D , S U PERA N N U ATION F UN D O N E O TH E R WE LF A RE F UNDS ON THE O THE R . H O W EVER , TH E FIN A N CE AC T , 2 0 03, B RIN GI N G A B O UT T HIS UN I F ORMITY CA M E INT O F O RCE W. E .F. I S T APRIL , 2 004 . 22. THE REFO R E , O N A READI N G OF T H E AFORE - EXTRACTED PO RT ION OF T H E JUDGMEN T , IT I S C L EAR T HA T THE APEX COURT HAD CONSIDE R ED ONLY THE QUE S TI O N RELA T IN G TO T HE EFF E CT OF THE AMENDMENT SO MADE A ND FOUND THAT A M ENDME NT WAS CURATIVE IN NAT U RE AND T HEREFORE THAT I T OPE R ATED R E TR OSPEC T IVELY FR O M 1 S T A PRIL . 1988 . 23. T H E R EAF T ER, IN PA R AG R A PH 1 5 OF TH E J UD G M ENT, IT WAS H E LD TH A T T H E A M ENDME NT S WERE B R OUG HT ABOUT U ND ER TH E FI N A N CE AC T , 198 3 FO R TH E PURP OSE OF E N S URIN G TH A T TH E RE L AXA T IO N / IN CE N T I VE WAS REST RI C T ED O NL Y T O T AX, DUT Y, CESS A ND F EE UND E R SEC . 4 3 B IN O RD E R T O E N S UR E TH A T IT DID N O T A PPL Y T O CO N T RIBUT IO N S T O LA B O UR WE L FA R E F UND S. F URTH ER , IT WAS HE LD TH A T T H E REA S O N AP P EA R S T O BE T HA T THE EMP L OY ER S S H O ULD N O T SIT : O N THE CO LL EC T E D CO N T RI B UTI O N S A N D DEPRIVE THE WO RK M EN O F TH E RIGH T FU L BEN E F IT S UNDER S O CIAL WE L FARE LEGIS L A TI O N S B Y D E L AY IN G PA Y M E N T OF CO NTR I BU TIONS TO TH E WE L FA R E FU N DS. IT WAS A L S O HE L D T HAT CONSEQUENT TO THE IMP LE MENT A T IO N PR O BLEM S OF TH E SECO ND P ROV I SO T O SEC . 4 3 B R ES UL TE D I N E N AC TM E N T OF FINA N CE AC T 2003 , DEL E TIN G TH E SECO ND PR OV I SO A ND B R IN G IN G A B OUT U NI FO RMIT Y I N TH E F IR S T PR OV I SO BY EQ U A TIN G TAX D UT Y, C E SS AND FEE W ITH C O NTRIBUTI O N S TO WE L FA R E F UND S AND TH E R EFO RE T H E F IN A N CE AC T , 2003 W HI CH WA S M A D E APPLIC A BLE B Y TH E PARLI A M E NT O NL Y WIT H EFFEC T F R O M I S T A PRIL , 2004 WO UL D B ECOME C U RA TI VE IN N A TURE A ND HENCE IT WO ULD APPL Y R E TR OS P EC TI VE L Y F R O M A PRIL , 1 988. 24. S O A L SO , THE LE A RN E D C O UN SE L FO R TH E A SSESSEE CO NT E NT E D TH A T S IN CE SEC . 43 B CO MM E N C E S ' WI TH A NON O B S T A NT E C L A U S E , EX PL A NATI O N I T O SEC.36 ( I )(VA) WAS EXC LUD E D . BUT I N ALOM EX T RUS I ONS ' CASE ' (S U PRA) THE AP EX COU RT H A D H E LD TH A T TH E UND E RL Y I NG OBJEC T OF TH E N O N - O B S T A NT E C L AUSE W AS T O D I S A LL O W DED U CT I O N S C L AI M E D M E R E L Y BY M AKI N G T HE BO O K ENTRY U NDER MERCANTI L E SYS TEM O F ACC O U NTING TH E R E FORE , T HE CONTENTI O N OF THE LEARNED COUNSEL FOR THE A S SESSEE THAT SINCE SEC . 4 3 B C O MMENCES W ITH , N O N - OBSTANTE CLAUSE , SEC . 36( I ) (VA) STOOD EXCLUDED, CANN O T BE SUSTAINED . A C C O RDIN G T O U S , THE F INDIN G OF THE APEX COURT TOWARDS THE LATTER PART OF PARAGRAPH 15 MAKE S THE I NTENTI O N A ND PURP OSE B E HIND TH E A M E NDMENT BR O UGHT ABOUT T O SEC . 43B CLEAR AND IT READ S THU S: ACC O RDIN G L Y, W E ' H O LD TH A T F IN A NCE ACT , 2003 W I L L O P E R A T E R E TR OS P E CTI VE L Y W.E.F . IS T A PRIL 19 88 (WHEN THE FIRST PR O VI SO S T OO D IN S ERTED ). L AS TL Y, WE MA Y ITA NO. 79/COCH/2015 3 P O I NT O UT THE H A RD S H IP A N D TH E IN V IDI O U S DI S CRIMINATION WHICH W O ULD BE CAUSED T O THE ASS E SSEE ( S) IF THE C ONTENTI O N OF ' T H E D EPA RTM E NT I S TO BE ACCEPTED THAT FINANCE ACT, 2003, TO THE ABO VE EXT E NT, O PERATED PR O SP E CTI VE L Y. TAKE A N EX AMPL E - IN THE PRESENT CASE , THE RE S PONDENTS HAVE DEP OS ITED THE CONTRIBUTI O NS WITH TH E R . P . F .C AFTER 3 1 ST MARCH (END OF ACCOUNTING Y EAR) BUT BEFORE FILING O F THE RETURN S UNDER THE I T ACT A ND THE DATE OF PAYMENT FALLS AFTER THE DUE DATE UNDER THE EMPLOYEES' PROVIDENT FUND ACT , THEY W ILL BE DENIED DEDUCTION FOR ALL TIMES . IN VIEW OF THE SECOND PROVISO , WHICH STOOD ON TH E S TATUT E B O OK AT THE RELEVANT TIME , EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER S E C . 43B O F THE ACT F O R ALL TIMES . THE Y WOULD LOSE THE BENEFIT OF D E DUCTION EVEN IN THE Y E A R O F ACC O UNT IN WHICH THE Y PA Y THE C O NTRIBUTI O N S T O THE WELF A RE FUND S, W HEREA S A D EFA ULT E R W H O FA IL S T O PA Y THE C O NTRIBUTION TO THE WELF A R E F UND RIGHT UP T O IST APRIL , 2 004 A ND W H O P AYS TH E CO NTRI B UTI O N A LTER IST APRIL , 2004 , WOULD G ET THE B E NEFIT O F DEDUCTI O N UNDER S E C . 4 3 B O F TH E AC T . ' AC C O RD I N G T O U S, IT I S THU S CLE A R THAT TH E D EC I S I O N R E ND E RED B Y TH E A P EX C O URT IN ALOM EX TRUSI O NS ' (SU PR A ) D I D N O T C O N S ID E R TH E QUE S TI O N I N VO L VE D IN T HI S CASE. 25 . S O A L SO. I N P A R AG R A PH 16 OF TH E JU D G M E NT S U PRA, TH E A P EX CO U RT H AD Q UOTED WITH APPROVAL THE J UD G M E NT I N C O M MI S SI O N ER OF I NCO M E TAXV. V J H GOTLA L ( 1 985) 1 56 1 T R 323 (SC) W HI CH READ TH US: ' WE S H O ULD FIND O UT TH E INTENTI O N FR O M THE L A N G U AGE U SE D B Y TH E L EG I S L A TUR E A N D I F S TRICT LITER AL C O N S TRUCTI O N LEAD S T O AN AB S URD R ES ULT , I . E . A RE S ULT N O T INTEND E D T O BE S UBSE RVED B Y TH E OB J EC T OF THE L E GI S LATI O N F O UND IN THE M A NNER INDICATED BEF O RE , THEN IF AN O THER C O N S TRU C TI O N I S POSS IBLE A P PEA R FROM STRICT LITERAL C O NSTRUCTI O N , THEN THAT C O N S TRUCT ION S H O ULD B E PREFERR E D T O TH E S TRI C T LI TE R AL C ONSTRUCTI O N. TH O U G H E QUIT Y AND TAXATI O N A R E O FT E N S TRAN GE R S, A TTEMPT S S H O ULD B E MA D E THAT TH ES E DO N O T REMAIN ALWAYS S O AND IF A CONSTRUCTION RESULT S IN EQUIT Y RATHER TH A N IN INJU S TIC E, THEN S UCH CONSTRUCTI O N SHOULD BE PREFERRED TO THE LITERAL CONSTRUCTION . ' 26. THEREFORE , IN OUR VIEW , WHEN SE C . 43B A S IT S T OO D PRIOR T O THE AM E NDM E NT A ND S E C .3 6(1)(VA)) EX PL A NATI O N I THERET O R L W S E C .2( 24 ) (X ) ARE C O N S IDER E D T OG ETHER , IT I S CLEAR TH A T TH EY O P E R A TE IN DIFF E R E N T F IE LD S. S O F A R AS THE E MPL OYEE'S CO NTRIBUTI O N R ECEIVE D I S CO N CE RN E D, IT S H O ULD H AVE BEE N PAI D ON OR B EFO R E TH E DU E D A T E PR ESC RI BE D U ND E R TH E R E L EVA NT S T A TUT ES. T H E N AGA IN T H E L EARNED CO U N S E L CO NT EN D ED TH A T O N A R EA DIN G OF SEC . 4 3 B (B), A N Y S UM ' P AYA BL E BY TH E ASSESSEE AS AN EMPLOYE R ' BY WAY CO NTRIBUTI ON T O A N Y P ROV ID E NT F UND M EA NT P AY M E NT O F ITA NO. 79/COCH/2015 4 BO TH E MPL OYEES CO NTRIBUTI O N A N D E MPL OYE R 'S CO NTR I BUTI O N B Y THE E MPL OYE R A ND TH E R EFO RE TH E ASSESSEE WAS E NTITL ED T O P AY B O TH CO NTR IBUT I ONS T OGE T HER ON O R B EFO R E THE F I LIN G O F TH E R E TURN UNDER S EC. 1 39( I ) OF THE AC T . WE ARE UN AB L E T O ACCE PT TH E SAID CON T EN TI O N A D VA NC E D BY TH E L EA RN E D COU N SE L . I F SUCH A CON T E NT IO N IS ACCEP T ED , T HA T WO UL D MAKE SEC .36(1) (VA) AND TH E EX PL A N A TI O N THERE T O O TI OSE . ACCO RD I N G T O U S, T H E R E WAS NO INDICA T ION IN SEC.43B AS IT ' STOO D PRI O R T O THE AM E NDM E NT A ND TH E REAFT E R A L SO T O D EFAC E S E C.36( I )(VA) A ND THE EX PL A N A TI O N TH ERE TO F R O M THE INC O ME TA X ACT . T HU S, IT MEAN S TH A T B O TH PR OV I S I O N S AR E O PER A TI VE A ND TH E CO NTRIBUTI O N S H AVE T O BE PAID IN ACCORDANCE W IT H THE M A NDATE C O NT A INED UND E R SE C.3 6 (1)(VA) AND EX PL A N A TI O N TH E RET O A ND UNDER SEC . 43B, RESPECTIVEL Y. 27. S O FAR A S THE DECI S I O N S CIT E D B Y TH E LEARN E D CO UN S EL F O R TH E ASSESSEE R E F ER R E D T O IN PA R AG R A PH 1 5 OF THI S JUDGMENT WERE C O NC E RN E D , IT I S TRUE TH AT IN TH E SA ID J UD G M E NT S, TH E HI G H CO URT S WE R E CO N S I DE RIN G TH E QUESTION O F REMITTANCE O F TH E CO NTRIBUTI O N S R E CEIV E D F R O M THE E MPL OY E E AS W ELL AS TH E E MPL OYE R A N D H E LD THAT THE CONTRIBUTIONS R E CEIVED FROM THE EMPL O YEE WERE AL S O LIABLE T O B E P A ID T O TH E RE S P E CTIV E S TATUT O R Y AUTHORITIE S UNDER THE PF AND ESI A C T O N O R B E F O RE TH E FILIN G O F RETURN UND E R SEC. 1 39( I ) W AS ALO NE S UFFICI E NT T O BE E LI G IBLE F O R DEDUCTION . F O R TH E RE ASO N S S TATED, WE A RE UN A BL E T O S U BSC RIB E T O TH E VIE W S EXPRE S SED B Y THE HI G H CO URT S I N TH E D E CI S I O N S C IT E D S U PRA B Y TH E L EA R NED CO UN SE L FO R TH E AS S E S SEE . THAT APART, WE ARE REMINDED OR THE JUDGMENT OR THE HON'BLE APEX COURT IN P AD M A S UN DARA RAO AND OTHERS V . STATE OF T.N . AND OTHERS [(2002) 3 SCC 533] PARAGRAPH 9 WHICH R E AD S AS F O LL OWS: 'IT I S ALSO A SETTLED PROPOSITION OF LAW THAT COURTS SHOULD NOT PLACE RELIANCE O N D E CI S I O NS WITH O UT DISCUSSING AS TO HOW THE FACTUAL SITUATI O N FITS IN WITH THE FACT SITUATI O N O F THE D E CI S I O N O N WHI C H RELIANCE I S PLACED . THERE I S ALWA Y S PERIL IN TRE A TIN G THE W O R D S O F A S P EE CH O R J UD G M E NT A S TH O U G H THEY ARE WORD S IN A LEGI S LATIVE ENACTMENT AND IT I S T O B E R E M E MB E R E D TH A T JUDI C I A L UTT E R A N CES A R E MADE IN THE SE TTING O F TH E F A CT S O F A P A RTI C UL A R C A SE SA ID L OR D M O RRI S IN ' H ARR IN G T ON V . BRITI S H RAILW AYS B O ARD '. CIRCUM S TANTIAL FLEXIB I LIT Y, O NE ADDITI O N A L O R D IF F E R E NT FACT M AY M AKE A WO RLD O F DIFFEREN C E BET WE EN CONCLU S I O N S IN TWO C A S E S. ' 28. WE ARE ALSO CONSCIOUS OF THE FACT THAT IF THE INTENTION OF A PARTICULAR PROVISIONS OF STATUTE CAN BE GATHERED FROM THE LANGUAGE USED B Y THE LEGI S L A TION , THEN WE AR E B O UND T O A BIDE B Y TH E L A N G U AG E U SE D THEREIN IN ORDER TO ASCERTAIN THE INTENTION. WE ARE ALSO O F THE O PINI O N TH A T THERE W AS A CLEAR L OG IC BEHIND SEC.36( I )(VA) AND EXPLANATION THERETO SINCE THE LEGISLATURE ITA NO. 79/COCH/2015 5 INTENDED THA T THE AM O UNT RECEIVED TOWARDS CONTRIBUTION OF THE EMPLOYEE WAS MONEY BELONGING TO THE EMPLOYEE AND THE ASSE SSEE WA S NOT ENTITLED TO UTILIZE THE SAID FUND AND ENRICH HIMSELF . SO ALSO , B O TH THE PROVISIONS S UPRA W ILL C O - E X I S T HARM O NIOUSL Y WITH O UT DISTURBING EACH O THER. THEREF O RE , THE DI S TINCTI O N DR AW N T O CR E DIT TH E A M O UNT OF THE EMPL OY ER AND TH E EMPLO Y EE WA S WITH A C L EA R O BJ E CTI V E AN D THER E I S N O ILL EGA L ITY OR O TH E R L EGA L INFIRMIT Y IN C LA S SIF Y IN G THE C O NTRIBUTI O N S O F E MPL OY EE S A ND EMPL OYE R IN TH E M A TT E R O F C R E DITIN G TH E S AM E T O THE APPROPRIATE STATUT O R Y AUTH O RITIES . 29. IN THAT VIEW O F THE M A TTER , WE AR E OF THE CO N S ID E RED O PINI O N THAT TH E V I EW TAK E N B Y TH E TRIBUN A L WHICH AFFIRMED THE D E CISI O N O F THE I S T APP E LL A TE AUTH O RIT Y TH A T THE RE S P O ND E NT WAS E NTITL E D T O G ET DEDUCTION O F ' THE CO NTRIBUTI O N S R ECE I VE D FR O M TH E E MPL OY EE S IF PAID O N O R B E F O R E TH E F ILIN G OF TH E RETURN UNDER SEC . 1 39 (I) WA S N O T C O RRECT . WE A R E IN C LIN E D T O AG R E E W ITH TH E JUD G M EN T O R TH E GUJ A R A T HIGH CO URT IN 'G UJ AR AT S TAT E R OAD T RA N S P O RT CO RP O RA/ I O N 'S CASE (S U P R A). WE ARE A L SO OF TH E O PINI O N TH A T TH E JUDGM E NT S O F THE O TH E R HIGH C OURT S R E F E RRED T O B Y THE LEARNED CO UN SE L F O R TH E R ES P O NDENT D O N O T L AY DOWN THE LAW CORRECTL Y. 30. LEARN E D COUN S EL F O R THE RE S P O ND E NT HA S A L SO C O NTEND E D THAT W H E N T WO V I EWS ARE P OS S I B L E. O N E I N FAV O UR O F THE A SSESS EE S H A LL BE A DOPTED A ND O UR A TTENTI O N WAS DR AW N T O TH E DEC I S I O N S IN ' C OMMI SS IONER OF IN CO ME - TAX V . PODAR C EM E NT PVT . LTD. A ND OTH E R S ' [ ( 1997 ) 2 2 6 I T R 62 5] , 'M ONI S H MAH E SHW A RI V. A SS T . C OMMIS S ION E R OF INCOM E TAX AND ANOTH E R ' [(2007 ) 289 ITR 341 (SC)] A ND IND O R E CO NSTRU C TION P . LTD. V. CO MMI S SIONER OF INCOME - TA X ' [(2007) 289 ITR 341] A ND CA NV ASS ED F O R THE SA ID PR O P O SITI O N . BUT SINCE WE ARE OF THE C LEAR OPINI O N THAT THE A SS E SS EE WA S ENTITL E D T O G ET THE DEDUCT IO N O F THE AM O UNTS A S PR O VID E D UNDER S EC . 36 ( I ) ( V A ) O NL Y IF TH E A M O UNT S SO R ECE I VE D FR O M TH E EMPL OY EE WAS PAID W ITHIN TH E DU E D A T E AS PR OV ID E D UND E R TH E R ELEVA NT S T A TUT E. WE DO N O T THINK T H A T T H I S I S A C ASE T O W HI C H S UCH A PRIN C IPL E I S A PPLI CA BL E . 31 . THE RE FO R E. TH E QU ES TI O N S OF L AW R AIS ED B Y TH E R EV ENU E I S A N SW E RE D A FFIRMATI VE L Y IN FAVO UR O F ' TH E R EVE NU E. IN TH E F AC T S AND CIR C UM S T A N C E S O F TH E C A S E , W E SE T AS ID E TH E OR D E R O F ' TH E TRIBUN AL IN ITA NO.8/2014 D A TED 09. 05 . 2014 SO F A R AS THE QU ES TI O N S RAI SE D HEREIN A R E C O NC ER NED AND R ES T O R E TH E O RD E R OF TH E ASS E SS IN G OFFICER . ACC O RDINGL Y , THE APP E AL I S ALL O W E D . ITA NO. 79/COCH/2015 6 10 THE RESPONDENT HAS REFER RED TO A UNREPORTED JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE KERALA STATE WAREHOUSING CORPORATION VS CIT IN ITA NO.1035 OF 2009 (JUDGMENT DATED 2 ND DEC 2009 ), WHICH IS UNDOUBTEDLY IN FAVOUR OF THE ASSESSEE . HOWEVER, THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF I) SOUTH INDIA CORPORATION LTD AND (II) MERCHEM LTD. (CITED SUPRA) BEING MORE RECENT, WE ARE BOUND TO FOLLOW THE LATEST JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT , WHICH HAS CONSIDERED THE ISSUE IN DETAIL. THEREFORE, THE ORDER OF THE CIT IS REVERSED AND THAT OF THE AO WITH REFERENCE TO THE DISPUTE IS RESTORED. IT IS ORDE RED ACCORDINGLY. 11 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF SEPT 2015 . SD/ - SD/ - ( B P JAIN ) (GEORGE GEORGE .K ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 21 ST SEPT 2015 RAJ* ITA NO. 79/COCH/2015 7 C OPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT , 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN