Shree Krishna Keshav Laboratories Ltd., Ahmedabad V. Dy.Commissioner of Income Tax,Circle-8, Ahmedabad

ITA 917/AHD/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7980 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: P B PARMAR
• Keywords: Unexplained cash credit; Principle of natural justice; Revised return
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 917/AHD/2016 (ASSESSMENT YEAR: 2011-12) SHREE KRISHNA KESHAV LABORATORIES LIMITED AMRAIWADI ROAD, AMRAIWADI, AHMEDABAD V/S DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AADCSD0519C APPELLANT BY : SHRI P. B. PARMAR, AR RESPONDENT BY : SHRI S. K. DEV, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -09-201 8 DATE OF PRONOUNCEMENT : 25 -09-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE EX-PARTE ORDER PASSED BY THE LD. CIT(A)-9, AHMEDABAD DATED 06.01.2016 PERTAINING TO A.Y. 2011-12 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 2 1. THE ORDER PASSED BY CIT (APPEALS) IS BAD IN LAW AND ON FACTS AND HENCE, IT IS SUBMITTED THAT THE SAME BE CANCELLED AND BE SUITABLY MODIFIED . 2.1 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN DISALLOWING AN AMOUNT OF RS.19,11,719/- BEI NG EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND AND ESI, ETC. WHICH WERE PAID BELATEDLY BUT BEFORE THE DUE DATE FOR FILING THE RETURN U/S. 139(1). 2.2 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED DISALLOWANCE WITHOU T APPRECIATING THE FACT THAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE APPELLANT HAD BEEN A SICK INDUSTRIAL UNIT AND WAS DECLARED AS SUCH UNDER THE BIFR AND THEREFO RE THE PROVISIONS RELATING TO DEPOSIT OF CONTRIBUTION TO PROVIDENT FUND, ESI, ETC. IS NOT LI ABLE TO BE DISALLOWED. 2.3 IT IS THEREFORE PRAYED THAT THE IMPUGNED DISALLOWANCE MAY PLEASE BE DELETED. 3.1 THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ADDITION FOR A SUM OF RS.3,9 8,655/- BEING INTEREST ACCRUED ON THE FIXED DEPOSIT IN THE BANK WHICH WAS NOT RECEIVED BY THE A SSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. 3.2 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION IN UTTER D ISREGARD TO THE FACT THAT THE APPELLANT'S RIGHT ON THE INTEREST ON FIXED DEPOSIT WITH THE BANK CRYSTAL IZED ONLY ON THE MATURITY OF THE FIXED DEPOSIT RECEIPT WHICH EVENT DID NOT TAKE PLACE DURING THE Y EAR UNDER APPEAL AND THAT THE APPELLANT HAS NO RIGHT TO ASK FOR OR TO RECEIVE SUCH INTEREST BEFORE THE MATURITY OF THE FIXED DEPOSIT. THEREFORE, THE INTEREST INCOME ON THE FIXED DEPOSIT RECEIPT WITH T HE BANK IS TAXABLE ONLY IN THE YEAR IN WHICH THE INTEREST HAS CRYSTALIZED AND HAS BEEN CREDITED TO T HE ACCOUNT OF THE APPELLANT ASSESSEE BY THE BANK ON MATURITY OF THE FOR. 4.1 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON ,* FACTS OF THE CASE IN CONFIRMING ADDITION FOR A SUM OF RS.2,75,811/- ON ACCOUNT OF ALLEGED TRIAL BALANCE DIFFERENCE. 4.2 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION WITHOUT AP PRECIATING THE FACT THAT THE DIFFERENCE IN TRIAL BALANCE DOES NOT REPRESENT EXCESS ASSET NOR IT REPR ESENTED NON-EXISTING CREDITS AND THEREFORE SUCH DIFFERENCE DOES NOT TAKE THE CHARACTER OF INCOME. 4.3 IT IS THEREFORE PRAYED THAT THE IMPUGNED ADDITION MAY PLEASE BE DELETED. ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 3 5.1 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ADDITION FOR A SUM OF RS. 1,27,3 6,740/- BEING THE DIFFERENCE BETWEEN THE INCOME DISCLOSED AS PER THE ORIGINAL RETURN OF INCOME AND THE REVISED RETURN OF INCOME. 5.2 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION WITHOUT AP PRECIATING THE FACT THAT THE ORIGINAL RETURN OF INCOME WAS FILED ON 30/9/2011 TO COMPLY WITH THE ST ATUTORY OBLIGATION U/S. 139(1), 139(3) AND 80 OF THE IT. ACT ON THE BASIS OF THE PROVISIONAL PR OFIT & LOSS ACCOUNT AND BALANCE SHEET AS A RESULT OF WHICH CERTAIN OMISSION AND MISTAKES WHICH WERE SET RIGHT BY FILING A REVISED RETURN OF INCOM E ON 11/3/2013 DISCLOSING REVISED TOTAL LOSS OF RS. 2 ,40,11,875/-. 5.3 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION IN UTTER D ISREGARD TO THE PROVISIONS OF SECTION 139(3) OF THE INCOME TAX ACT. THE ASSESSING OFFICER HAVING ACCEPTED THE REVISED RETURN OF INCOME FILED ON 11/3/2013 AND ALSO HAVING ACCEPTED THE AUDITED PROF IT &. LOSS ACCOUNT, BALANCE SHEET AND THE AUDITED BOOKS OF ACCOUNTS AND THE BOOK RESULTS IS I N GROSS ERROR IN NULLIFYING THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE. 5.4 IT IS PRAYED THAT THE IMPUGNED ADDITION MA Y PLEASE BE DELETED. 6.1 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ADDITION FOR A SUM OF RS.1,03,30 ,495/- ON ACCOUNT OF ALLEGED UNACCOUNTED CASH CREDITS (RS.22,54,619/- BEING OUTSTANDING CREDIT BA LANCE IN THE NAMES OF PAREKH ENTERPRISE, MANSAROVAR ENTERPRISE, OM PHARMA, PD PHARMA AND VIJ AY AGENCIES AND RS.80,83,576/- BEING DIFFERENCE IN THE BALANCE OF ACCOUNT OF M/S. ATUL GLASS WORKS AS PER THE ASSESSEE'S BOOKS OF ACCOUNT AND AS PER THE CONFIRMATIONS BY THE PARTY). 6.2 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION U/S. 68 OF THE I.T. ACT SOLELY ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED CONFIRMATION FROM THE CO NCERNED PARTIES IN UTTER DISREGARD TO THE FACT THAT THE APPELLANT HAD ALREADY SUBMITTED BEFORE THE AO TH AT IT IS IN CONTACT WITH THE PARTIES CONCERNED AND CONFIRMATION WILL BE SUBMITTED IN DUE COURSE. T HE APPELLANT SAYS THAT THE IMPUGNED ADDITION HAS BEEN MADE IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. 6.3 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION U/S. 68 FO R A SUM OF RS.80,83,576/- WITH RESPECT TO THE DIFFERENCE IN THE CLOSING BALANCE IN THE ACCOUNT OF M/S. ATUL GLASS WORKS AS PER THE BOOKS OF ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 4 ACCOUNT OF THE APPELLANT ASSESSEE AND THE CONFIRMAT ION BY THE PARTY, WITHOUT BRINGING ON RECORD ANY DIFFERENCE WITH RESPECT TO THE TRANSACTIONS BETWEEN THE PARTIES DURING THE YEAR UNDER CONSIDERATION. 6.4 THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) GROSSLY ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE IMPUGNED ADDITION WITHOUT IS SUING A SHOW CAUSE NOTICE IN THAT REGARD AND THEREFORE THE ADDITION HAS BEEN MADE IN VIOLATION O F PRINCIPLE OF NATURAL JUSTICE. 6.5 IT IS PRAYED THAT THE IMPUGNED ADDITION MA Y PLEASE BE DELETED. 2. THE FACTS OF THE CASE ARE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD MADE LATE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND, ESI ETC. AS PER ANNEXURE 2 A AND 28 TO 3CD REPORT SUBMITTED BY THE ASSESSEE, THE FOLLOWING AMOUNTS WE RE PAID LATE. A P.F: SR, NO. MONTH EMPLOYEES CONTRIBUTION TO PROV. FUND (RS.) DUE DATE OF PAYMENT ACTUAL DATE OF PAYMENT 1 APRIL, 2010 134698 20/05/1010 13/09/2010 2 MAY, 2010 132988 20/06/1010 15/01/2011 3 JUNE, 2010 133949 20/07/1 010 15/01/2011 4 JUL&2010 136869 20/08/1 010 15/01/2011 5 AUGUST, 2010. 134251 20/09/1 010 15/01/2011 6 SEPT., 2010 133628 20/10/1010 15/01/2011 7 OCT., 2010 136378 20/11/1010 15/01/2011 8 NOV., 2010 132615 20/12/1010 15/01/2011 9 DEC., 2010 125548 20/01/2011 08/03/2011 10 JAN., 2011 125761 20/02/201 1 16/03/2011 11 FEB., 2011 122126 20/03/201 1 22/07/2011 12 MARCH, 2011. 114397 20/04/2011 22/07/2011 ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 5 TOTAL 1563208 B E.S.I. SR. NO. MONTH EMPLOYEES CONTRIBUTION TO E.S.I. (RS.) DUE DATE OF PAYMENT ACTUAL DATE OF PAYMENT 1 APRIL, 2010 26935 21/05/2010 17/08/2010 2 MAY, 2010 29547 21/06/2010 16/12/2010 3 JUNE, 2010 31208 21/07/2010 07/01/2011 4 JULY ,201-0 30116 21/08/2010 07/01/2011 ! 5 AUGUST, 20 10 30249 21/09/2010 13/01/2011 6 SEPT., 2010 29827 21/10/2010 13/01/2011 7 OCT.,, 2010 30439 21/11/2010 NOT PAID 8 NOV., 2010 29771 121/12/2010 NOT PAID 9 DEC., 2010 28470 21/01/2011 NOT PAID 10 JAN., 2011 28602 21/02/2011 NOT PAID 11 FEB., 2011 26689 21/03/2011 NOT PAID 12 MARCH, 2011 26658 21/04/2011 NOT PAID TOTAL 34851 1 TOTAL A + 6 = RS.19,11,719/- (RS. 15,63,208 + RS.3,48,511) 3.1 THEREFORE, VIDE ORDER SHEET ENTRY DATED 1.2/12/ 2013, THE ASSESSEE WAS ASKED TO FURNISH EXPLANATION AS TO WHY THE LATE PAY MENTS OF EMPLOYEES CONTRIBUTION TO P.F, ESI ETC. SHOULD NOT BE ADDED T O INCOME AS PER THE PROVISIONS OF SECTION 2(24)(X) R.W.S: 36(1 )(VA) OF THE ACT. ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 6 3.2 IN REPLY TO THE ABOVE, THE ASSESSEE-FILED SUBMI SSION DATED 13LH JANUARY, 2014. THE RELEVANT PORTION OF THE SUBMISSION IS REP RODUCED AS UNDER: AS REGARDS PF AND ESI, IT IS TO SUBMIT THAT PF AND ESI HAVE NOT BEEN DEPOSITED DURING THE YEAR UNDER CONSIDERATION AND THE SAME HAS BEEN DULY DISA LLOWED IN THE COMPUTATION. 3.3 THE ABOVE SUBMISSION OF THE ASSESSEE HAS. BEEN DULY CONSIDERED AND THE SAME IS HOT FOUND ACCEPTABLE. THE ASSESSEE HAS ADDED EMPLOYER'S CONTR IBUTION E$IC IN THE COMPUTATION OF INCOME. BUT, IT HAS NOT ADDED EMPLOYEES' CONTRIBUTION TO PF/ESIC . AS PER THE PROVISIONS OF SUB CLAUSE (X) OF CLAUSE 24 OF SEC: ON 2) OF THE ACT, ANY SUM RECEIVED BY THE ASSESSEE FROM HIS -EMPLOYEES AS CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATIO N FUND OR ANY FUND SET UP UNDER THE PROVISIONS OF THE EMPLOYEES STATE INSURANCE ACT, 1948 OR ANY OTHER FOR THE WELFARE OF SUCH EMPLOYEES .CONSTITUTES INCOME IN THE HANDS OF THE ASSESSEE. FURTHER, AS PE R THE PROVISIONS OF CLAUSE (VA) OF SUB SECTION (1) OF SEC; ON 36 OF THE ACT, THE ASSESSEE IS ENTITLED TO D EDUCTION IN RESPECT OF THE SUM REFERRED TO IN SUB CLAUSE (X) OF CLAUSE (24) OF SECTION 2 OF THE ACT IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE 'EMPLOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFOR E THE DUE DATE. THE 'DUE DATE' IS DEFINED IN THE EXPLANATION BELOW CLAUSE .A OF SUB SECTION (1) OF S ECTION 36 OF THE ACT. AS PER THIS DEFINITION, 'DUE DATE' MEANS THE DATE BY WHICH THE ASSESSEE IS REQUI RED AS AN EMPLOYER TO CREDIT AN EMPLOYEE'S CONTRIBUTION TO THE EMPLOYEE'S ACCOUNT IN THE RELEV ANT FUND UNDER ANY ACT RULE, ORDER OR NOTIFICATION ISSUED THERE UNDER OR UNDER ANY STANDING ORDER;- AW ARD, CONTRACT OF SERVICE OR OTHERWISE. . FURTHER, THE HON'BLE HIGH COURT OF GUJARAT HAS DECIDED THIS IS SUE IN FAVOUR OF REVENUE IN THE LATEST JUDGMENT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORA TION [2014] 41 TAXMANN.COM 100 (GUJARAT). 3.5 IN THIS CASE, SINCE THE ASSESSEE FAILED TO DEPO SIT THE EMPLOYEES' CONTRIBUTION OF RS. 19,11,719/- BEFORE THE DUE DATE, THE SAID AMOUNT CONSTITUTES TH E INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 2(24)(X) BUT THE ASSESSEE IS NOT ELIGIBLE F OR DEDUCTION U/S.36(1)(VA) OF THE ACT. ACCORDINGLY, AN AMOUNT OF RS.L9,11,719/- IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE.' 3. AGAINST THE ADDITION OF RS. 22,00,800/-, ASSESSEE P REFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) GAVE ALSO 7 AD JOURNMENTS BUT ASSESSEE COULD NOT SUBMIT REQUIRED DETAILS BEFORE THE LD. CI T(A) AND LD. CIT(A) DID NOT ITA NO. 917/ AHD/2016 . A.Y. 2011-1 2 7 HAVE ANY OPTION BUT TO CONFIRM THE FINDING OF A.O. ON THE BASIS OF RECORD AVAILABLE WAS WITH THE CIT(A). 4. WE HAVE GONE THROUGH THE RECORD AND IMPUGNED ORDER. LD. A.R. STATED THAT APPELLANT HAD BEEN A SICK UNIT AND WAS UNDER THE BI FR AND APPELLANT COULD NOT COLLECT THE DOCUMENTS AND ALL INFORMATION PERTAININ G TO APPEAL AND REQUESTED THAT IN THE INTEREST OF JUSTICE, ONE CHANCE MAY BE GIVEN TO THE APPELLANT. 5. ON THE OTHER HAND, LD. D.R. HAS NO OBJECTION PROVID ED THAT APPELLANT APPROACHES CIT(A) ON ITS OWN AFTER GETTING THE ORDE R OF THIS TRIBUNAL. SINCE ASSESSEE IS A SICK UNIT AND PROCEEDING UNDER THE BI FR AND IN THE INTEREST OF THE JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) A ND SEND IT BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE APPEAL AFRESH AND APPELLAN T HAS SUBMITTED AN UNDERTAKING TO THE EFFECT THAT FROM THE DATE OF THE RECEIPT OF THE ITAT ORDER, APPELLANT SHALL APPROACH LD. CIT(A) WITHIN 30 DAYS AND NO ADJOURNMENT TO BE SOUGHT BY THE APPELLANT BEFORE THE LD. CIT(A) AND S HALL SUBMIT ALL THE RELEVANT DETAILS BEFORE THE LD. CIT(A) AS AND WHEN CALLED FO R BY THE LD. CIT(A). WITH ABOVE OBSERVATIONS, WE ALLOW THIS APPEAL. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 25 - 09- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 25 /09/2018 RAJESH