ACIT, Jaipur V. RAJASTHAN STATE SEEDS CORPORATION LTD., Jaipur

ITA 828/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5348 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DHK
• Keywords: Competent authority

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH- VKJ- EHUK] YS[ KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO.828/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE ACIT, CIRCLE-6, JAIPUR CUKE VS. M/S RAJASTHAN STATE SEEDS CORPORATION LTD. 3 RD FLOOR, PANT KRISHI BHAWAN, JANPATH, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 8882Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY :S HRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21.04.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/04/2016. VKNS'K@ ORDER ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 2 ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 3 ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 4 ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 5 ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 6 ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 7 PER SHRI KUL BHARAT, JM THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED AGA INST THE ORDER OF CIT(A)-2, JAIPUR DATED 29.09.2015 , THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING PRIOR PERIOD EXPENS ES OF RS. 3,91,790/- AS ALLOWABLE EXPENSE EVEN WHEN IT IS NOT IN ACCORDA NCE OF THE ACCOUNTING POLICIES FOLLOWED BY THE ASSESSEE. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING DEDUCTION FOR THE CONTRIBUTION OF RS. 72,23,606/- MADE TO AN UNAPPROVED GRATUITY FUND. (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING CONTRIBUTION O F RS. 15,17,283/- TO STATE RENEWAL FUND AS ALLOWABLE EXPENDITURE THOUGH IT IS NOT ACTUAL EXPENDITURE. ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 8 (IV) (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 19,27,756/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIV E ACTS. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT EMPLOYEE S CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVISION OF SECTION 4 3B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(24)(X) OF IT.ACT. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143( 3) OF THE IT ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS MADE VI DE ORDER DATED 30.12.2014. THE AO WHILE FRAMING THE ASSESSMENT MADE A DISALLOW ANCE OF RS. 3,91,790/- OUT OF PRIOR PERIOD EXPENSES , DISALLOWANCE OF CON TRIBUTION OF ON ACCOUNT OF UNAPPROVED GRATUITY FUND OF RS.72,23,606/- DISALLOW ANCE ON ACCOUNT OF CONTRIBUTION OF STATE RENEWAL FUND OF RS.15,17,283 /- AND DISALLOWANCE OF DELAY OF EMPLOYEES PF AND ESI AMOUNTING TO RS. 19,2 7,756/-. THE ASSESSEE AGGRIEVED BY THIS ORDER PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS ALLOWED THE APPEAL. NOW THE REVENUE AGGRIEVED BY THE APPELLATE ORDER HAS COME INTO FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.1 GROUND NO.1 IS RELATED TO DELETION OF RS. 3,91 ,790/-. THE LD. CIT DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT T HE CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE. HE SUBMITTED THAT L D. CIT(A) OUGHT TO HAVE CONFIRMED THE DISALLOWANCE AS THE AO HAS CONSIDERED THE ISSUE IN DETAIL AND CAME TO THE CONCLUSION THAT ACCORDING TO THE ACCOUN TING POLICY REGULARLY FOLLOWED, AND THE ASSESSEE IS REQUIRED TO ACCOUNT FOR THE EXPENSE IN THE YEAR IN WHICH IT IS INCURRED. IT IS NOT OPEN TO THE AS SESSEE TO CLAIM SUCH EXPENDITURE AS AND WHEN SO PAID. THE LD. CIT (DR) THEREFORE V EHEMENTLY ARGUED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN MAKING THE DISALLOW ANCE. ON THE CONTRARY THE AR OF THE ASSESSEE OPPOSED THE SUBMISSION OF THE LD. CIT(DR) AND REITERATED THE SUBMISSIONS AS WERE MADE IN THE WRITTEN SUBMISSION. 2.2 THE LD. COUNSEL SUBMITTED THAT THE ISSUE IS NO MORE RES-INTEGRA THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN EARLIER YEARS. THE LD. COUNSEL ALSO RELIED ON THE JUDGEMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. REPORTED AT 358 ITR 295 TO BUTTRESS THE ARGUMENT THAT THERE I S NO IMPACT ON TAX LOIABILITY. ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 9 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITI ES BELOW. THE LD. CIT(A) WHILE DECIDING THE ISSUE HAS GIVEN FINDINGS OF FACT S BY OBSERVING AS UNDER IN PARA 2.3.1 TO 2.3.3 OF THE IMPUGNED ORDER: 2.3.1. I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUB MISSIONS OF THE APPELLANT. THE FACTS OF THI S ISSUE ARE SIMILAR TO THE FACTS IN THE PRECEDING YEAR. IN ASSESSMENT YEAR 2006-07 IN THE ASESSEES CASE. THE ITAT, JAIPUR (IN ITANO.307/JP/2009) HAS DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: FROM THE DETAILS WE NOTE THAT THE APPROVAL FOR PAY MENT OF THESE EXPENDITURE WERE GIVEN DURING THE YEAR AND THEREFOR E THE LIABILITY CRYSTALLIZED DURING THE YEAR. IN VIEW O THESE FACT S AND THE CONSISTENT VIEW OF THIS BENCH THAT THE LIABILITY CRYSTALLIZED ON APPROVAL OF PAYMENT, WE FIND NO INFIRMITY OF LD. CIT(A) DELETING THE DIS ALLOWANCE. 2.3.2 IN ASSESSMENT YEAR 2009-10, THE CIT(A)-II, JA IPUR (APPEAL NO. 475/11-12) HAS ALSO DECIDED THE MATTER IN FAVOUR OF THE ASSESS EE. HONBLE ITAT IN ITS ORDER (IN ITA NO.893/JP/2012) DATED 17.07.20-15 FOR ASSES SMENT YEAR 2009-10 HAS AGAIN CONFIRMED THE DECISION OF THE CIT(A) IN ALLOW ING THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER: WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS A GO VERNMENT COMPANY. THE GENUINENESS OF THE EXPENSES HAS NOT BEEN DOUBT ED BY THE ASSESSING OFFICER. THE LD. CIT(A) HAD FOLLOWED THE COORDINAT E BENCH DECISION PASSED IN ITA NO. 307/JP/2009 FOR A.Y. 2006-07 ON I DENTICAL FACT, THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT(A). 2.3.3 IN THE ASSESSMENT YEAR 2011-12, THE CIT(A)-2 JAIPUR (APPEAL NO. 333/13- 14) HAS ALSO DECIDED THE MATTER IN FAVOUR OF THE AS SESSEE BY FOLLOWING THE ABOVE ORDERS OF THE ITAT. FOLLOWING THE ABOVE JUDG EMENT, THE DISALLOWANCE ON ACCOUNT OF PRIOR PERIOD EXPENSES OF RS. 3,91,790/- MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. THE GROUND OF A PPEAL IS ALLOWED. 2.4 FROM THE ABOVE IT IS EVIDENT THAT THE LD. CIT(A ) HAS FOLLOWED THE ORDER OF TRIBUNAL PERTAINING TO THE ASSESSEE IN EARLIER YEA RS. THE REVENUE HAS NOT POINTED OUT ANY CHANGE INTO THE FACTS AND CIRCUMSTA NCES IN THE YEAR UNDER CONSIDERATION. THEREFORE TAKING CONSISTENT VIEW WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A) AND THE SAME HE HEREBY AFFIRMED. THE GROUND RAISED BY THE REVENUE IS DISMISSED. ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 10 3. GROUND NO. 2 IS AGAINST THE DELETION OF DISALLOW ANCE MADE ON ACCOUNT OF CONTRIBUTION OF RS. 72,23,606/- MADE TO AN UNAPPROV ED GRATUITY FUND. 3.1 THE CIT DR SHRI B.K. GUPTA SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING T HE DISALLOWANCE. HE SUBMITTED THAT THE DEDUCTION IS ALLOWABLE ONLY IN THE EVENT O F CONTRIBUTION IS MADE TO A RECOGNISED AND APPOROVED GRATUITY FUND. HE SUBMIT TED IN THE CASE IN HAND ADMITTEDLY THE GRATUITY FUND WAS NOT GRANTED APPROV AL, BY THE COMPETENT AUTHORITY . 3.2 ON THE CONTRARY THE LD. COUNSEL FOR THE ASSESS EE SHRI P.C.PARWAL SUBMITTED THAT THE ASSESSEE THE ISSUE COVERED BY TH E DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.307/JP/2009 ERTA9INING TO EARLIER YEARS. THE LD. COUNSEL SUBMITTED THAT T HERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE HE FURTHER RELIED THE SUBMISSIONS AS WERE MADE IN WRITTEN SUBMISSIONS. 3.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 3.3.1 TO 3.3.3 BY OBSERVING AS UNDER: 3.3.1 I HAVE PERUSED THE FACTS OF THE CASE, ASSE SSMENT ORDER AND TH4 SUBMISSIONS OF THE APPELLANT. THE FACTS OF THIS IS SUE ARE SIMILAR TO THE FACTS IN THE PRECEDING YEAR. IN ASSESSMENT YEAR2006-07 IN TH E ASSESSEES CASE THE ITAT, JAIPUR (IN ITA NO. 307/JP/2009) HAS DECIDED THE MAT 6TER IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: THE ASSESSEE HAS APPLIED FOR APPROVAL OF THE SCHEM E ON 31.3.1981. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT THE APPROVAL TO THE SCHEME IS NOT ALLOWED. THEREFORE, THE SCHEME CANNO T BE TAKEN AS NOT APPROVED. THE ASSESSEE CANT BE MADE TO SUFFER FOR INACTION OF THE DEPARTMENT. 3.3.2 IN ASSESSMENT YEAR 2009-10, THE CIT(A)-II, J AIPUR (APPEAL NO. 475/11-12) HAS ALSO DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE. HONBLE ITAT IN ITS ORDER (IN ITA NO. 893/JP/2012) DATED 17.07.2015 FOR ASSESSMENT YEAR 2009-10 HAS AGAIN CONFIRMED THE DE CISION OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER: WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSU E IS IDENTICAL TO A.Y. 2006-07, WHICH HAS BEEN CONSIDERED BY THE CO- ORDINATE BENCH IN ITA NO. 307/JP/2009 IN ASSESSEES OWN CAS E. AS THE ASSESSEE HAS APPLIED FOR ITS APPROVAL IN TIME BUT F ORMAL APPROVAL HAD NOT BEEN ISSUED BY THE DEPARTMENT, THEREFORE, T HERE IS NO FAULT ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 11 ON THE ASSESSEE. THE IDENTICAL ISSUE HAS BEEN DECI DED BY THE COORDINATE BENCH, WHICH IS SQUARELY APPLICATION ON THIS YEAR ALSO, WE UPHOLD THE ORDER OF THE LD. CIT(A). 3.3.3 IN ASSESSMENT YEAR 2011-12, THE CIT(A)-2, JAIPUR (APPEAL NO.333/13-14) HAS ALSO DECIDED THE MATTER IN FAVOU R OF THE ASSESSEE BY FOLLOWING THE ABOVE ORDERS OF THE ITAT. FOLLOWING T HE ABOVE JUDGEMENTS, THE DISALLOWANCE ON ACCOUNT OF CONTRIBUTION MADE TO LI C GROUP GRATUITY SCHEME OF RS. 72,23,606/- MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. THE GROUND OF APPEAL IS ALLOWED. 4. FROM THE ABOVE OBSERVATIONS OF THE LD. CIT(A) IT IS EVI DENT THAT LD. CIT(A) HAS FOLLOWED THE DECISION OF THE CO-ORDINATE BENCH. THE REVENUE HAS NOT POINTED OUT ANY CHANGE IN THE FACTS IN THE YEAR UN DER APPEAL, THEREFORE TAKING A CONSISTENT VIEW WE DO NOT SEE ANY REASON TO INTER FERE INTO THE FINDINGS OF THE CIT(A) AND THE SAME IS HEREBY UPHELD. 5. GROUND NO.4(A)& (B) IS AGAINST THE DELETION OF DISALLOWANCE MADE ON ACCOUNT OF DEPOSITING THE EMPLOYEES CONTRIBUTION OF PF AND ESI BEYOND THE PRESCRIBED LIMIT PROVIDED UNDER THE RESPECTIVE ACTS . THE LD. CIT(DR) SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE D ISALLOWANCE MADE ON ACCOUNT OF DELAY IN DEPOSITING THE PAYMENT OF EMPLOYEES CO NTRIBUTION TO PF. 4.1 ON THE CONTRARY THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AS THE ASSESSE E HAS DEPOSITED THE AMOUNT BEFORE DUE DATE OF FILING OF THE RETURN. 4.2 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FIND THAT LD. CIT(A) HAS GIVEN THE FINDINGS ON FACTS BY OBSERVING AS UNDER: 5.3.1 I HAVE PERUSED THE FACTS OF THE CASE, ASSESSM ENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. ADMITTEDLY, CONTRIBU TION TO PROVIDENT FUND HAS BEEN PAID BY THE APPELLANT, IN ALL INSTANCES B EFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 1390(1). THIS FA CT IS THEREFORE, NOT IN DISPUTE. IN VIEW OF THE JUDGEMENT OF THE RAJASTHA N HIGH COURT IN THE CASE OF JAIPUR VIDHYUT VITHRAN NIGAM LTD, 265 CTR62 (RAJ.) CIT VS. STATE BANK OF BIKANER & JAIPUR (2014)99 DTR131 (RAJ.) AND OTHER CASE LAWS ON THIS ISSUE, THE CLAIM OF THE APPELLANT IS ALLOWABLE . ACCORDINGLY THIS DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DIREC TED TO BE DELETED. THE GROUND OF APPEAL IS ALLOWED. ITA NO. 828/JP/15 ACIT, CIRCLE-6, JAIPUR VS. M.S RAJASTHAN STATE SEED S CORPN. JAIPUR 12 4.3 THE ABOVE FINDINGS OF FACT IS NOT CONTROVERTE D BY THE REVENUE BY ALLOWING ANY CONTRARY MATERIAL AVAILABLE ON RECORD . AS THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. STATE BANK OF BIKAN ER AND JAIPUR REPORTED AT (2014)1999 DTR 131 (RAJ.). WE DO NOT SEE ANY REASO N TO INTERFERE IN THE ORDER OF THE LD. CIT(A). 5. GROUND NO.5 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04 /2016. SD/- SD/- (T.R. MEENA) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 28/ 04 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-6, JAIPUR 2. THE RESPONDENT- M/S RAJASTHAN STATE SEEDS CORPO RATION LTD. JAIPUR 3. THE CIT(A) 2, JAIPUR 4. THE CIT-II, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 828/JP/15) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR