DCIT, Jaipur V. ANIL SPECIAL STEEL LIMITED, Jaipur

ITA 84/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4970 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: HIMANSHU GOYAL CA DHK
• Keywords: Question of law

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 84/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE DCIT CIRCLE- 7 JAIPUR CUKE VS. M/S. ANIL SPECIAL STEEL LTD. KANAKPURA, P.O. MEENAWALA SIRSI ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCA 2038 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI O.P. BHATEJA, - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY:SHRI HIMANSHU GOYAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 31/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 8/11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-3, JAIPUR DATED 24-11-2015 FOR THE ASSESSME NT YEAR 2009-10 RAISING THEREIN FOLLOWING GROUNDS:- I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDI TION OF RS. 44,06,418/- WHICH WAS MADE BY THE AO ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND ESI AS THE DEPARTMENT HAD FILED SLP BEFORE THE HON'BLE APEX CO URT ON THIS ISSUE. ITA NO. 84/JP/2016 THE DCIT, CIRCLE- 7, JAIPUR VS. M/S. ANIL SPECIAL S TEEL LTD., JAIPUR . 2 II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN RESTRICTING DISALL OWANCE FROM RS. 15,64,687/- TO RS. 2,00,000/- WITHOUT ANY BASIS, WHICH WAS DISALLOWED BY THE AO ON ACCOUNT OF TRADE AND OTHER SELLING EXPENSES. 2.1 APROPOS GROUND NO. 1 OF THE REVENUE REGARDING D ELETION OF ADDITION OF RS. 44,06,418/- AND RS. 4,08,138/- ON A CCOUNT OF PF AND ESI CONTRIBUTION OF EMPLOYEES. AT THE OUTSET OF THE HE ARING, THE LD. AR OF THE ASSESSEE PRAYED THAT THIS ISSUE HAS ALREADY BEEN DE CIDED, IN VIEW OF THE DECISIONS OF VARIOUS COURTS, BY THE LD. CIT(A) IN ITS FAVOUR VIDE HIS ORDER DATED 24-11-2015 BY OBSERVING AS UNDER:- 4.3. ON GOING THROUGH THE ABOVE, I FIND THAT THI S ISSUE HAS BEEN DEALT AT LENGTH AND HAS BEEN DECIDED IN VARIOUS COURTS WHEREIN IT HAS BEEN HELD THAT EMPLOY ERS AND EMPLOYEES CONTRIBUTION TO ESI AND PF PAID BEFORE THE LAST DATE OF FILING OF THE RETURN U/S 139(1) THOUGH AFTE R THE STATUTORY DATES SPECIFIED IN THE RESPECTIVE ACTS CO ULD NOT BE DISALLOWED. I THEREFORE, DIRECT THE ASSESSING OFFIC ER TO DELETE THE DISALLOWANCE MADE BY HIM. 2.2 FURTHER THE LD. AR OF THE ASSESSEE PRAYED THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT, JAIPU R VS. M/S. ANIL SPECIAL STEEL INDUSTRIES LTD. HAD DISMISSED THE APPEAL OF T HE DEPARTMENT ON THE ITA NO. 84/JP/2016 THE DCIT, CIRCLE- 7, JAIPUR VS. M/S. ANIL SPECIAL S TEEL LTD., JAIPUR . 3 SAME ISSUE VIDE HIS ORDER DATED 4-08-2016 IN DBIT N O. 4/2015. HENCE, THE GROUND RAISE BY THE DEPARTMENT IS COVERED IN FA VOUR OF THE ASSESSEE BY THE ORDER OF HON'BLE JURISDICTIONAL HIGH COURT D ATED 4-08-2016 BY OBSERVING AS UNDER:- 2. IN OUR VIEW, THE IDENTICAL SELF SAME QUESTION HAS ALREADY BEEN ANSWERED BY THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. STATE BANK OF B IKANER & JAIPUR & COMMISSIONER OF INCOME TAX VS. JAIPUR VI DYUT VITRAN NIGAM LTD. (2014) 363 ITR 70 (RAJ.) AND ALSO IN THE CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANG H LTD. (2014), 366 ITR 163 (RAJ.) THEN IT DOES NOT RE MAIN SUBSTANTIAL QUESTION OF LAW FOR FURTHER CONSIDERATI ON BY THIS COURT. 2.3 THE LD. DR RELIED ON THE ORDER OF THE AO . 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE ARGUMENTS OF THE LD. AR OF THE ASSESSEE ON THE ISSUE IN QUESTION AND CITING THE DE CISION OF HON'BLE JURISDICTIONAL HIGH COURT IN ASSESSEE'S OWN CASE IN DBIT APPEAL NO. 4/2015 (SUPRA). HENCE, THE GROUND NO. 1 OF THE REVE NUE IS DISMISSED. 3.1 APROPOS GROUND NO. 2 OF THE REVENUE, BRIEF FACT S OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE THE ASSESSEE COMPANY HAD INCURRED ITA NO. 84/JP/2016 THE DCIT, CIRCLE- 7, JAIPUR VS. M/S. ANIL SPECIAL S TEEL LTD., JAIPUR . 4 TRADE AND OTHER SELLING EXPENSES OF RS. 78,23,435/- AS AGAINST SELLING EXPENSES OF RS. 99,29,256/- IN PRECEDING YEAR. THE AO REQUIRED THE ASSESSEE TO FURNISH THE JUSTIFICATION OF SELLING EX PENSES. THE AO WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HAD NOT BEEN ABLE TO JUSTIFY THE DISCOUNTS AND REBATES GIVEN BY IT TO VARIOUS PARTIES. ACCORDINGLY, THE AO DISALLOWED A SUM OF RS. 15,64,687/- BEING 20% OF TOTAL EXPENSES I.E. RS . 78,23,435/- AND ADDED BACK THE SAME TO THE TOTAL INCOME OF THE ASSE SSEE. 3.2 IN FIRST APPEAL, THE LD. CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF RS. 2.00 LACS BY OBSERVING AS UNDER:- 7.3. ON GOING THROUGH THE ABOVE FACTS, I FIND THAT THE DISALLOWANCE MADE BY THE AO IS WITHOUT BRI NGING FORWARD ANY SPECIFIC INSTANCE OF IRREGULARITY IN TH IS RESPECT. THE APPELLANT HAS BEEN ABLE TO JUSTIFY THE QUANTUM OF EXPENSES CLAIMED BY IT. BUT AT THE SAME TIME THE QU ANTUM OF DISCOUNT PROVIDED SEEMS ON A VERY HIGHER SIDE. IT I S NOT POSSIBLE TO JUDGE THE GENUINENESS OF THE COMPLETE S ELLING EXPENSES INCURRED BY THE APPELLANT. THUS AN AMOUNT OF RS. 2,00,000/- IS ADDED BACK TO THE INCOME OF THE ASSES SEE AND ACCORDINGLY THE ADDITION MADE BY THE AO TO THIS EXT ENT IS UPHELD. THE AO IS DIRECTED TO DELETE THE DISALLOWAN CE OF RS. 13,64,687/- MADE ON THIS ACCOUNT. AS A RESULT, THIS GROUND IS PARTLY ALLOWED. ITA NO. 84/JP/2016 THE DCIT, CIRCLE- 7, JAIPUR VS. M/S. ANIL SPECIAL S TEEL LTD., JAIPUR . 5 3.3 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO AND THE LD. AR REPEATED THE SAME ARGUMENTS AS MA DE BEFORE THE LD. CIT(A) BUT THE LD. AR SUPPORTED THE ORDER OF THE LD . CIT(A). 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, IT IS NOTED THAT THE ASSESSEE HAD INCURRED THE TRADE AND OTHER SELLING EXPENSES OF RS. 78,23,4 35/- FOR WHICH THE AO REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF SUC H EXPENSES. THE DETAILS WERE FILED BY THE ASSESSEE BEFORE THE AO WHO FINALL Y DISALLOWED THE AMOUNT TO THE EXTENT OF RS. 15,64,687/- I.E. 20% OF TOTAL SELLING EXPENSES ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO JUS TIFY THE EACH DISCOUNT/ REBATE GIVEN TO THE PARTIES. IN FIRST APPEAL, THE L D. CIT(A) RESTRICTED THE SAME TO THE EXTENT OF RS. 2.00 LACS ON THE GROUND T HAT THE QUANTUM OF DISCOUNT PROVIDED BY THE ASSESSEE WAS ON HIGHER SID E AND IT IS NOT POSSIBLE TO JUDGE THE GENUINENESS OF THE COMPLETE SELLING EX PENSES INCURRED BY THE ASSESSEE. THUS THE LD. CIT(A) DIRECTED THE AO DELET E THE DISALLOWANCE OF RS. 13,64,687/- MADE ON THIS ACCOUNT. TAKING INTO C ONSIDERATION ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND NO REAS ON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY RESTRICTED THE DISALLOWANCE TO THE ITA NO. 84/JP/2016 THE DCIT, CIRCLE- 7, JAIPUR VS. M/S. ANIL SPECIAL S TEEL LTD., JAIPUR . 6 EXTENT OF RS. 2.00 LACS IN VIEW OF THE SUBMISSIONS OF BOTH THE PARTIES. HENCE, THE GROUND NO. 2 OF THE REVENUE IS DISMISSED . 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8/11/2 016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 8 /11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CIRCLE- 7, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. ANIL SPECIAL STEEL LTD., JAIP UR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 84/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR