Aruna Jyothi Vedire, Hyderabad, Hyderabad V. ACIT, Circle-4(1), Hyderabad, Hyderabad

ITA 91/HYD/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2536 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 27-04-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 18-01-2017
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: V SIVA KUMAR
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 91/HYD/2017 ASSESSMENT YEAR: 2013-14 SMT. ARUNA JYOTHI VEDIRE HYDERABAD. PAN ACUPV0740Q VS. ADD.CIT, CIRCLE-4(1) HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. SIVA KUMAR REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING : 27-04-2017 DATE OF PRONOUNCEMENT : 03-05-2017 ORDER PER B. RAMAKOTAIAH, AM THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT-1, HYDERABAD DATED 03-11-2016, ON THE ISSUE OF DISALLOWANCE OF EXPENDITURE PERTAINING TO PAYMENT OF ESI AND EPF TO AN EXTENT OF RS. 2,35,92,596/-. 2. BRIEFLY STATED, ASSESSEE CARRIES ON BUSINESS IN THE NAME OF JYOTHI COMPUTER SERVICES AND FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 60,10,040/-. IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE IT ACT, A.O HAS DISALLOWED 20% OF THE EXPENDITURE ON MOTOR CARS TO AN EXTENT OF RS. 3,97,697/-. A.O ALSO DISALLOWED AND BROUGHT TO TAX AN AMOUNT OF RS. 2,35,92,596/- ON THE BELATED 2 ITA NO. 91/HYD/2017 SMT. ARUNA JYOTHI VIDIRE, HYDERABAD. PAYMENTS TOWARDS ESI AND EPF U/S 36(1)(VIIA) R.W.S 2(24)(X) OF THE IT ACT. ASSESSEE CONTESTED THE MATTER BEFORE LD. CIT(A) AND CIT(A) VIDE THE IMPUGNED ORDER DISMISSED THE APPEAL. ASSESSEE RAISED THE GROUNDS ON THE ABOVE TWO ISSUES. THE GROUND PERTAINING TO DISALLOWANCE OF MOTOR CAR EXPENDITURE WAS NOT PRESSED. 3. WITH REFERENCE TO THE ISSUE OF DISALLOWANCE / ADDITION OF RS. 2,35,92,596/-, IT WAS SUBMITTED THAT THESE AMOUNTS WERE REMITTED WELL BEFORE THE DUE DATE BEFORE FURNISHING THE RETURN OF INCOME FOR THE RELEVANT YEAR. ASSESSEE HAS RELIED ON VARIOUS CASE LAW WHICH WERE RELIED ON BEFORE LD. CIT(A) AS UNDER: 1. CIT VS KICHA SUGAR CO., LTD., (2013) 35 TAXMANN.COM 54 UTTARAKHAND HIGH COURT. 2. CIT VS AIMIL LTD., (2010) 321 ITR 508 (DELHI HIGH COURT). 3. CIT, SHIMLA VS NIPSO POLYFABRIKS LTD., (2013) 30 TAXMANN.COM 90 (MIMACHAL PRADESH HIGH COURT). 4. CIT VS SABARI ENTERPIRSES (2008) 298 ITR 141 (KARNATA HIGH COURT). 5. CIT VS UDIPUR DUGDH UTPADAK SAHAKARI SANGH LTD, (2013) 35 TAXMANN.COM 616 (RAJASTHAN HIGH COURT). 6. CIT VS HEMLA EMBROIDERY MILLS P LTD., (2013) 37 TAXMANN.COM 160 (P&H HIGH COURT). 3.1 IN ADDITION, LD. COUNSEL ALSO RELIED ON COORDINATE BENCH DECISION IN THE CASE OF M/S VELJAN DENISON LTD., IN ITA NO. 1251/HYD/2015, DATED 16-12- 2015. LD. COUNSEL ALSO PLACED ON RECORD THE COPY OF THE JUDGMENT IN THE CASE OF SPECTRUM CONSULTANTS INDIA (P.) 3 ITA NO. 91/HYD/2017 SMT. ARUNA JYOTHI VIDIRE, HYDERABAD. LTD., VS CIT [2013] 34 TAXMAN.COM 20 (KARNATAKA) TO SUBMIT THAT ASSESSEE REMITTED CONTRIBUTIONS UNDER EPF ACT AND ESI ACT AFTER DUE DATES PRESCRIBED UNDER SAID STATUTES, BUT BEFORE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE IT ACT, THEREFORE, THE DEDUCTION SHOULD BE ALLOWED. 4. IN REPLY LD. DR FAIRLY ADMITTED THAT AS SEEN FROM THE A.OS ORDER ALL THE AMOUNTS WERE PAID MUCH BEFORE THE DUE DATE OF FILING THE RETURN, HOWEVER, SHE RELIED ON THE ORDERS OF A.O AND CIT(A) TO SUBMIT THAT AMOUNTS WHICH ARE NOT PAID WITHIN DUE DATES OF RELEVANT ACT WILL BECOME INCOME AS PER THE PROVISIONS OF THE ACT. 5. AFTER CONSIDERING RIVAL CONTENTIONS AND PERUSING THE FACTS ON THE RECORD, WE ARE OF THE OPINION THAT THE AMOUNT IS ALLOWABLE AND CANNOT BE TREATED AS INCOME OF ASSESSEE. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SPECTRUM CONSULTANTS INDIA (P.) LTD., VS CIT (SUPRA) HELD THAT AMOUNTS WHICH WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN ARE REQUIRED TO BE ALLOWED. THE HONBLE KARNATAKA HIGH COURT FOLLOWED ITS EARLIER DECISION IN THE CASE OF CIT VS SABARI ENTERPIRSES (2008) 298 ITR 141 (KARNATA HIGH COURT), WHERE THE DIVISIONAL BENCH OF THE KARNATAKA HIGH COURT AFTER EXTRACTING SECTION 2(24)(X), SEC. 36(1)(VIIA) AND SEC. 43B(B) OF THE IT ACT, HELD THAT THE CONTRIBUTIONS RENDERED BY ASSESSEE TO EPF AND ESI ARE ALLOWABLE DEDUCTIONS, EVEN THOUGH MADE BEYOND THE STIPULATED PERIOD AS CONTEMPLATED UNDER THE MANDATORY 4 ITA NO. 91/HYD/2017 SMT. ARUNA JYOTHI VIDIRE, HYDERABAD. PROVISIONS OF SEC. 36(1)(VIIA) R.W.S 2(24)(X) OF THE IT ACT AND SEC 43B OF THE IT ACT. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS ALOM EXTRUSIONS LTD. [2009] 319 ITR 306/185 TAXMAN 416 HAS DISMISSED THE REVENUE APPEALS AND ACCORDINGLY THOSE ORDERS HAVE BECOME FINAL. RESPECTFULLY FOLLOWING THE SAME, SINCE THE AMOUNTS WERE PAID MUCH BEFORE THE DUE DATE FOR FILING RETURN OF INCOME, A.OS ACTION IN TREATING THE SAME AS INCOME OF ASSESSEE CANNOT BE SUPPORTED. ACCORDINGLY, SAID ADDITION IS DELETED. IN VIEW OF THAT, THE GROUND NOS. 3 AND 4 ON THE ISSUE ARE CONSIDERED ALLOWED. 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 03 RD MAY, 2017. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 03 RD MAY , 2017. KRK 1 SMT. ARUNA JYOTHI VEDIRE, 3-4-496/A, JYOTHI ARCADE, BARKTPUR, HYDERABAD. 2 ACIT,CIRCLE-4(1), HYDERABD. 3 CIT (A)-1, HYDERABAD. 4 PCIT 1, HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE