Dy. C.I.T., Circle-3(1), Gwalior V. M/s Vivaswan Hotel Pvt. Ltd., Gwalior

ITA 95/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0673 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 1 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-07-2013
• Assessment Year: misc
• Appeal Filed On: 05-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: V BAPNA
• Keywords: TDS; Set aside
• Section: 43B; 40(a)(ia); 80IB; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 95/AGRA/2013 ASSTT. YEAR : 2009-10 D.C.I.T., CIRCLE 3(1), VS. M/S. VIVASWAN HOTEL PVT. LTD., GWALIOR. UNIVERSITY ROAD, GWALIOR. (PAN : AABCV 6897 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. MISHRA, JR. D.R. RESPONDENT BY : SHRI V. BAPNA, C.A. DATE OF HEARING : 04.07.2013 DATE OF PRONOUNCEMENT OF ORDER : 09.07.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 30.01.2013 FOR THE ASSESSMENT YEAR 20 09-10 ON THE FOLLOWING GROUNDS : (I). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.9,00,949/- ON ACCOUNT OF DISALLOWANCE U/S. 43B R.W.S. 36(1)(VA) O F THE I.T. ACT. (II). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.86,680/- DISALLOWED U/S. 40(A)(IA) OF THE INCOME TAX ACT. (III). WHETHER ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.4,37,332/- DISALLOWED U/S. 80IB OF THE INCOME TAX ACT. ITA NO. 95/AGRA/2013 2 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 3. ON GROUND NO. 1, THE AO NOTICED, THERE ARE DELAY ED PAYMENTS OF PF AND ESI DUES ON VARIOUS OCCASIONS IN ITS ART INDUS UNIT. TH E DETAILS OF SAME ARE NOTED IN PARA 4 OF THE ASSESSMENT ORDER. THE AO FURTHER FOUN D THAT THE ASSESSEE HAS PAID THE TOTAL AMOUNT OF RS.9,00,949/- BEYOND DUE DATE MENTI ONED IN THE RESPECTIVE P.F. ACT AND ESI ACT. THE AO FURTHER NOTED THAT UNDER THE PR OVISIONS OF THE IT ACT, THE AMOUNTS PAID AFTER THE DUE DATE ARE NOT DEDUCTIBLE AND DUE DATE EVEN UNDER THE PF ACT REMAINS THE SAME, I.E., 15 DAYS OF THE CLOSING OF THE MONTH. THEREFORE, THE PAYMENT MADE AFTER THE DUE DATE, BUT WITHIN THE GRA CE PERIOD ARE ALSO HIT AND ACCORDINGLY, NOT ALLOWABLE AS DEDUCTION UNDER THE I NCOME-TAX ACT AND ACCORDINGLY, DISALLOWANCE WAS MADE U/S. 43B READ WITH SECTION 36 (1)(VA). THE AO RELIED UPON CERTAIN DECISIONS IN SUPPORT OF HIS FINDINGS. THE A SSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE RETURN WAS DUE TO BE FILED U/S. 139 (1) BY 30.09.2009, WHICH WAS FILED ON 30.09.2009. THE PROVISIONS OF SECTION 43B ARE APPLICABLE FOR PAYMENT OF STATUTORY DUES AFTER THE DATE OF FILING OF RETURN U /S. 139(1) OF THE IT ACT. ALL THE PAYMENTS AS MENTIONED IN THE ASSESSMENT ORDER ARE M ADE BEFORE THE LAST DATE OF FILING OF THE RETURN U/S. 139(1). THEREFORE, NO DIS ALLOWANCE COULD BE MADE. THE ITA NO. 95/AGRA/2013 3 ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPORT O F HIS CONTENTION. THE LD. CIT(A) FOLLOWING THE DECISION OF DELHI HIGH COURT IN THE C ASE OF CIT VS. DHARAMENDRA SHARMA, 297 ITR 320 AND OTHER DECISIONS RELIED UPON BY THE ASSESSEE HELD THAT DEDUCTION U/S. 43B IS ADMISSIBLE TO THE ASSESSEE IN RESPECT OF THE PAYMENT MADE AS EMPLOYERS CONTRIBUTION AND EMPLOYEES CONTRIBUTION IF THE PAYMENT HAS BEEN MADE BEFORE THE DUE DATE OF FILING RETURN OF INCOME . THE LD. CIT(A) ALSO RELIED UPON THE DECISION OF SUPREME COURT IN THE CASE OF C IT VS. VINAY CEMENT LTD, 313 ITR (STATUTE) 1. THE LD. CIT(A) FOUND THAT ALL THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THEREFO RE, FOLLOWING THE ABOVE DECISIONS, THE DISALLOWANCE MADE BY THE AO WAS DELE TED. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. IT IS UNDISPUTED F ACT THAT IN THE YEAR UNDER CONSIDERATION, ALL THE PAYMENTS IN QUESTION HAVE BE EN MADE BEFORE DUE DATE OF FILING OF RETURN OF INCOME. THE DETAILS OF THE SAME ARE NOTED IN PARA 4 OF THE ASSESSMENT ORDER, WHICH SUPPORT THE FINDING OF THE LD. CIT(A) THAT TOTAL PAYMENT OF RS.9,00,949/- HAVE BEEN MADE ACTUALLY BEFORE THE DU E DATE OF FILING OF RETURN. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. P.M . ELECTRONICS LTD., 313 ITR 161 FOLLOWING ITS EARLIER DECISION IN THE CASE OF C IT VS. DHARMENDRA SHARMA (SUPRA) CONSIDERED THE ISSUE WHICH AROSE FOR CONSID ERATION, I.E., ALLOWABILITY OF ITA NO. 95/AGRA/2013 4 DEDUCTION U/S. 36(1)(VA) READ WITH SECTION 2(24)(X) AND SECTION 43B OF THE IT ACT IN RESPECT OF EMPLOYERS / EMPLOYEES CONTRIBUTION TOWARDS PF ETC., HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM BENEFIT U/S. 43B FOR THE PERIOD PARTICULARLY IN VIEW OF THE FACT THAT IT HAD CONTRIBUTED THE PF BEFORE FILI NG OF THE RETURN. HONBLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD., 313 ITR (STATUTE) 1 ALSO DISMISSED THE DEPARTMENTAL APPEAL TAKING THE SAME VIEW. HONB LE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD., 319 ITR 306 HELD T HAT OMISSION OF SECOND PROVISO TO SECTION 43B OF THE ACT BY FINANCE ACT 20 03 OPERATED RETROSPECTIVELY W.E.F. 01.04.1988 AND NOT PROSPECTIVELY FROM 01.04. 2004. HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MANOJ K UMAR SINGH, 349 ITR 230 CONSIDERED THE ISSUE OF EMPLOYEES CONTRIBUTION U/S . 43B READ WITH SECTION 36(1)(VA) OF THE IT ACT, HELD, EFFECT OF AMENDMENT OF SECTION 43B BY FINANCE ACT, 2003 AMENDMENT RETROSPECTIVE PROVIDENT FUND AND EMPLOYEES STATE INSURANCE CONTRIBUTIONS MADE AFTER DUE DATE BUT BEFORE FILING OF RETURN PAYMENTS DEDUCTIBLE. IN VIEW OF ABOVE JUDGMENTS, THERE IS N O MERIT IN THE APPEAL OF THE REVENUE ON THIS GROUND. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 5. ON GROUND NO. 2, THE AO MADE DISALLOWANCE OF RS. 86,680/- U/S. 40(A)(IA) OF THE IT ACT. THE AO FOUND THAT THE ASSESSEE HAS DEBI TED RS.1,01,542/- UNDER THE HEAD ISO 9000. ON EXAMINATION OF THE LEDGER ACCOUNT OF THIS EXPENSE, IT WAS FOUND ITA NO. 95/AGRA/2013 5 THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON AMOUNT OF RS.86,680/- PAID TO DP ISO CONSULTANTS. ON THIS PAYMENT, SECTION 194J IS APPLI CABLE BUT THE ASSESSEE FAILED TO DEDUCT TDS. THEREFORE, SAME AMOUNT WAS DISALLOWED. IT WAS SUBMITTED THAT THE AMOUNT IS ACTUALLY PAID, THEREFORE, THE ABOVE PROVI SION IS NOT APPLICABLE AND RELIED UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOPAL TRILOKCHANDRA AGARWAL, 201 TTJ 486 (INDORE). THE ASSESSEE ALSO RE LIED UPON THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ADDL. CIT, 146 TTJ-1 (VISHAKHAPATNAM)(SB) AND OTHER DECISIONS, IN WHICH IT WAS HELD THAT THE PROVISION OF SECTION SPEAKS OF THE AMOUNT PAYAB LE ON WHICH TAX HAS TO BE DEDUCTED. SINCE THE AMOUNT HAS ALREADY BEEN PAID, T HEREFORE, THE PROVISION WOULD NOT APPLY. THE LD. CIT(A) FINDING THAT SINCE ASSESS EE HAS MADE PAYMENT DURING THE YEAR UNDER CONSIDERATION, DELETED THE ADDITION. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF LD. CIT(A) . THE LD. DR CONTENDED THAT THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF MERIL YN SHIPPING AND TRANSPORTS (SUPRA) HAS BEEN STAYED BY HONBLE ANDHRA PRADESH H IGH COURT WHICH FACT HAS NOT BEEN DISPUTED BY THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE LD. CIT(A) FOLLOWED THE ABOVE DECISION AND THE DECISION OF INDORE BENCH WHI CH IS ON THE SAME LINE AS HELD BY THE LD. CIT(A), THEREFORE AT THE STAGE, THE ASSE SSEE WOULD NOT GET ANY BENEFIT IN ITA NO. 95/AGRA/2013 6 THIS REGARD. FURTHER, THE LD. CIT(A) HAS NOT DECIDE D THIS ISSUE ON MERIT, THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDED THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE LD. CIT(A) FOR DECIDING THE ISSU E ON MERITS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF LD. CI T(A) AND RESTORE THIS ISSUE TO THE FILE OF LD. CIT(A) WITH THE DIRECTION TO DECIDE THI S ISSUE IN ACCORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS ALLOWED FOR STATI STICAL PURPOSES. 7. ON GROUND NO.3, THE AO MADE DISALLOWANCE U/S. 80 IB. THE AO FOUND THAT THE ASSESSEE HAS MADE CLAIM OF DEDUCTION ON RS.1,05 ,45,833/- U/S. 80IB OF THE IT ACT. THE DETAILS OF THE SAME WERE CALLED FOR AND IT WAS FOUND THAT THE ASSESSEES CLAIM IS NOT ADMISSIBLE ON THE AMOUNT, WHICH IS DIS ALLOWED U/S. 40(A)(IA), WHICH WAS DISALLOWED IN A SUM OF RS.14,57,774/-. THEREFOR E, 30% OF THE SAID AMOUNT I.E., RS. 4,37,332/- WAS DISALLOWED AND ADDITION WAS ACCO RDINGLY MADE. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT ELIGIBILITY OF DEDUCTION U/S. 80IB IS FROM INCOME DERIVED FROM BUSINESS OF HOTEL. THE INCOME H AS BEEN COMPUTED BY MAKING DISALLOWANCE BY THE ASSESSEE HIMSELF. THEREFORE, FR OM THE BUSINESS OF HOTEL, INCOME HAS INCREASED. THE LD. CIT(A) RELYING UPON T HE DECISION OF ITAT, AHMEDABAD BENCH IN THE CASE OF ITO VS. COMPUTER FOR CE, 128 ITD 116 (AHD.), DELETED THE ADDITION. ITA NO. 95/AGRA/2013 7 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE FI ND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT, AHM EDABAD BENCH IN THE CASE OF COMPUTER FORCE (SUPRA). THERE IS NO MERIT IN THE AP PEAL OF THE REVENUE ON GROUND NO. 3. THE SAME IS ACCORDINGLY, DISMISSED. 9. IN THE RESULT, THE DEPARTMENTAL APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY