The DCIT- Circle-I(1), Baroda V. Gujarat Urja Vikas Nigam Ltd., Baroda

ITA 898/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1177 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: JP SHAHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A.NO.897/AHD/2012A.Y.2004-05 2. ./ I.T.A.NO.898/AHD/2012A.Y.2007-08 1-2. THE DCIT CIRCLE-1(1) BARODA / VS. 1-2. GUJARAT URJA VIKAS NIGAM LTD. ( ERSTWHILE GUJARAT ELECTRICITY BOARD ) RACE COURSE CIRCLE ALKAPURI, BARODA-390007 ./ ./ PAN/GIR NO. : AAACG 8504 N ( ' / APPELLANT ) .. ( #' / RESPONDENT ) ' $ / APPELLANT BY : SHRI A.K.KHANDELWAL CIT-DR #' % $ / RESPONDENT BY : SHRI J.P. SHAH, AR &'( % ) / DATE OF HEARING 14/08/2015 *+, % ) / DATE OF PRONOUNCEMENT 21/08/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-I, BARODA [CIT(A) IN SHORT] DATED 08/02/2012 & 03/02/2012 PERTAINING TO ASSESSMENT YEARS (AYS) 2004-05 & 2007-08 RESPECTIVE LY. BOTH THE ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 2 - APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .897/AHD/2012 FOR AY 2004-05. THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.1,19,62,01,051/- ON ACCOUNT OF DISALLOWANCE OF E MPLOYEES CONTRIBUTION TO PF PAID BEYOND DUE DATE WITHOUT APP RECIATING THE CLEAR PROVISION AND THE LEGISLATIVE INTEND, WHICH I S PENAL IN NATURE, SO FAR AS THE PROVISIONS OF SEC.36(1)(VA) ARE CONCE RNED, THE EMPLOYEES CONTRIBUTION IS ALLOWABLE ONLY IF THE SA ME IS PAID WITHIN DUE DATES UNDER THE PROVIDENT FUND ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL THE ORDER OF THE CIT(APPEALS) ON THE ABOVE ISSUE MA Y BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 3. BRIEFLY STATED FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS REOPENED AND THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT ,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DAT ED 10/12/2008, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE AD DITION OF RS.1,19,62,01,051/- ON ACCOUNT OF LATE PAYMENT OF E MPLOYEES CONTRIBUTION TO PF. AGAINST THE SAID ASSESSMENT OR DER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 3 - SUBMISSIONS, DIRECT THE AO TO DELETE THE ADDITION. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENUE IS NOW IN APPEA L BEFORE US. 3. RESPECTIVE REPRESENTATIVES OF THE PARTIES WERE H EARD AT LENGTH. DURING THE COURSE OF HEARING, IT WAS OBSERVED THAT THE CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE LD.CIT(A) THAT THE CON TRIBUTION WAS MADE WITHIN TIME. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO MADE ADDITION ON THE BASIS THAT EMPLOYEES C ONTRIBUTION TO PF WAS BELATEDLY DEPOSITED. HOWEVER, THE CONTENTION OF THE ASSESSEE IS THAT THE PAYMENTS WERE MADE IN ADVANCE AND THERE WAS NO DELAY IN DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF. THE LD.CIT(A) H AS DECIDED THIS ISSUE BY FOLLOWING HIS PREDECESSORS ORDER PASSED IN AY 2 006-078, WHICH READS AS UNDER:- 3.2. I HAVE CONSIDERED THE MATTER, WHICH IS COVERE D BY DECISION OF MY LEARNED PREDECESSOR CIT(A)-I, BARODA IN APPEL LANTS CASE FOR AY 2006-07. LIKE IN AY 2006-07, IN THE CHART F ILED BY THE APPELLANT, CLOSING BALANCE (COL.NO.9) AT EACH MONTH END DURING THE YEAR IS IN NEGATIVE, DUE TO WHICH IT COULD NOT BE SAID THAT THERE WAS ANY BELATED PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. IN VIEW OF THIS, ADDITION OF RS.119,62,01,05 1/- IS DELETED. 4.1. DURING THE COURSE OF HEARING, LD.SR.DR STATED THAT THE MATTER NEEDS VERIFICATION AT THE END OF THE AO. THE LD.COUNSEL FOR THE ASSESSEE HAS ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 4 - PLACED ON RECORD A CHART. THE LD.COUNSEL FOR THE A SSESSEE HAS NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF AO FO R A LIMITED PURPOSE OF VERIFICATION WITH REGARD TO DEPOSIT OF EMPLOYEES C ONTRIBUTION TO PF AUTHORITIES. IN VIEW OF THE SUBMISSIONS OF THE AU THORIZED REPRESENTATIVES OF THE PARTIES, WE HEREBY SET ASIDE THE ORDER OF TH E LD.CIT(A) AND RESTORE THE ISSUE TO THE FILE OF AO FOR A LIMITED PURPOSE T O VERIFY THE PAYMENT OF THE EMPLOYEES CONTRIBUTION. IN CASE, IT IS FOUND THAT THE EMPLOYEES CONTRIBUTION WAS PAID BEFORE THE DUE DATE, THEN THE AO WOULD DELETE THE ADDITION. THUS, THIS GROUND OF THE REVENUES APP EAL IS ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO.2 IS GENERAL IN NATURE REQUIRE NO INDE PENDENT ADJUDICATION. 6. AS A RESULT, REVENUES APPEAL IN ITA NO.897/AHD/ 2012 FOR AY 2004-05 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO.8 98/AHD/2012 FOR AY 2007-08, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(APPEALS) ERRED IN DIRECTING THE ASSESSING OF FICER TO EXCLUDE THE PROVISIONS FOR GRATUITY OF RS.29,55,144/- WHICH IS AN UNASCERTAINED LIABILITY FOR THE COMPUTATION OF BOOK PROFIT U/S.11 5JB OF THE ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR AL TER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 5 - RELIEF CLAIMED IN APPEAL THE ORDER OF THE CIT(APPEALS) ON THE ABOVE ISSUE MA Y BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7.1. BRIEF FACTS OF THE CASE ARE THAT WHILE FRAMING THE ASSESSMENT, THE AO MADE ADDITION ON ACCOUNT OF PROVISION FOR GRATUI TY OF RS.29,55,144/- INTO THE BOOK PROFIT U/S.115JB OF THE ACT. AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.C IT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED THE APPEAL BY FOLLOWING THE DECISION OF HIS PREDECESSOR PASSED FO R AY 2006-07. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENU E IS NOW IN APPEAL BEFORE US. 7.2. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE PROVISIONS FOR GRATUITY IS NOT ASCERTAINED LIABILIT Y, THEREFORE THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 7.3. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH (ITAT C BENCH AHMEDABAD) PASSED IN ASSESSEES OWN CASE IN ITA NO.1820/AHD/2010 FOR AY 2006-07, DA TED 30/09/2013. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE B Y OBSERVING AS UNDER:- ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 6 - I HAVE CONSIDERED THE MATTER. SINCE GROUND NO.12 RELATING TO ENHANCEMENT OF BOOK PROFITS U/.115JB ON ACCOUNT OF PROVISION FOR GRATUITY REMAINED TO BE ADJUDICATED UPON IN APPELLA TE ORDER DATED 24.2.2010, APPELLATE ORDER NEEDS TO BE RECTIFIED U/ S.154 BY ADJUDICATING UPON THIS GROUND OF APPEAL, WHICH IS C OVERED BY MY LEARNED PREDECESSOR CIT(A)-I, BARODAS DECISION ON IDENTICAL ISSUE IN APPELLANTS OWN CASE FOR AY 2006-07. FOLLOWING THE SAME, ADDITION OF RS.29,55,144/- TO THE BOOK PROFIT U/S.1 15JB IS CANCELLED. 8.1. WE FIND THAT A SIMILAR GROUND WAS RAISED IN AS SESSEES OWN CASE IN AY 2006-07 BY WAY OF ITA NO.1820/AHD/2010(SUPRA), W HEREIN THE COORDINATE BENCH IN PARA-19 HAS REPRODUCED THE GROU ND IN THE FOLLOWING TERMS:- 19. GROUND NO.4 IS REPRODUCED BELOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD.CIT(A) ERRED IN THE DIRECT THE ASSESSING OFFICER TO EXCLUDE THE PROVISIONS FOR GRATUITY OF RS.3,02,17,0-00/- WHICH IS AN UNASCERTAINED LIABILITY, FOR THE COMPUTATION OF BOOK PROFIT U/S.1 15JB. 8.2. AFTER CONSIDERING THE SUBMISSIONS, THE COORDIN ATE BENCH HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- 20. AFTER EXAMINING THE FACTS OF THE CASE, LEARNED CIT(A) HAS REFERRED THE CASE OF BHARAT EARTH MOVERS, 245 ITR 428 AND CERTAIN DECISIONS OF THE TRIBUNAL AND THEN CAME TO THE CONCLUSION THAT THE P ROVISION FOR GRATUITY WAS MADE ON ACTURIAL VALUATION; HENCE, IT WAS NOT A N UNASCERTAINED LIABILITY. IN OUR OPINION, THERE WAS NO FALLACY IN THE SAID VERDICT OF LEARNED CIT(A) BECAUSE THE ASSESSEE HAS DEMONSTRATED THAT T HE PROVISION FOR GRATUITY WAS MADE ON THE BASIS OF SPECIFIC CALCULAT ION AND IT WAS NOT AN UNASCERTAINED LIABILITY. IN THE CASE OF ESAR MOTORS LIMITED, 82 TTJ, IT WAS HELD BY THE RESPECTED CO-ORDINATE BENCH THAT THE PR OVISION FOR GRATUITY BASED UPON ACTURIAL VALUATION WAS NOT AN UNASCERTAI NED LIABILITY WHICH ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 7 - COULD BE ADDED BACK WHILE COMPUTING THE BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB. RESPECTFULLY FOLLOWING THIS DECISION , NO INTERFERENCE IS REQUIRED IN THE VIEW TAKEN BY LEARNED CIT(A). THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED,. 8.3. SINCE THE FACTS ARE IDENTICAL TO THE FACTS AS WERE RAISED IN AY 2006- 07(SUPRA) AND NO CHANGE IN THE FACTS AND CIRCUMSTAN CES ARE POINTED OUT BY THE REVENUE, THEREFORE TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) , SAME IS HEREBY UPHELD AND REVENUES THIS GROUND IS REJECTED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE FOR AY 2004-05 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEAL OF THE REVENUE FOR AY 2007-08 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 21 ST DAY OF AUGUST, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 08 /2015 0)..& , '.&../ T.C. NAIR, SR. PS ITA NOS.897 & 898/AHD/201 2 DCIT VS. GUJARAT URJA VIKAS NIGAM LTD. AYS 2004-05 & 2007-08 RESPECTIVELY - 8 - !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 ( ) / THE CIT(A)-I, BARODA 5. 5'6 &23 , ) 23 , , 1 / DR, ITAT, AHMEDABAD 6. 689 :( / GUARD FILE. / BY ORDER, #5 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14/18.8.15 (DICTATION-PAD 7+3PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..17.8.15/18.8.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.21.8.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.8.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER