DCIT, Circle-2(2), Hyderabad, Hyderabad V. Talwar Mobiles Pvt. Ltd., Hyderabad, Hyderabad

ITA 959/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2409 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Tax effect
• Section: 43B; 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B: HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 959/HYD/2017 ASSESSMENT YEAR: 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD VS M/S. TALWAR MOBILES PVT. LTD., SECUNDERABAD [PAN: AABCT0818P] (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. N. SWAPNA, DR FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR DATE OF HEARING : 06-03-2018 DATE OF PRONOUNCEMENT : 07-03-2018 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS AN APPEAL FILED BY THE REVENUE FOR THE AY. 2 011- 12 AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)-2, HYDERABAD, DATED 28-02-2017. REVENUE I S AGGRIEVED BY THE ORDER OF THE CIT(A) HOLDING THAT THE P AYMENTS OF EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI BY THE EMPLOYER-ASSESSEE IS NOT IN CONSONANCE WITH THE EXPLAN ATION TO SECTION 36(1)(VA) OF THE INCOME TAX ACT [ACT] AND THAT IT IS ENTITLED FOR DEDUCTION U/S. 43B OF THE ACT. ITA. NO. 959/HYD/2017 :- 2 - : 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE-COMPA NY, A DEALER FOR HUNDAI MOTORS INDIA, FILED ITS RETURN OF IN COME FOR THE AY. 2011-12 ON 29-09-2011, DECLARING TOTAL INCOME OF RS. 47,78,147/- AS PER THE NORMAL PROVISIONS OF THE ACT A ND BOOK PROFIT OF RS. 90,48,436/- U/S. 115JB OF THE ACT. DURIN G THE ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT, ASSES SING OFFICER (AO) OBSERVED THAT THE ASSESSEE HAS PAID PF CONTRIBUTION OF EMPLOYEES BELATEDLY FOR THE MONTHS OF A PRIL TO JULY, 2010 AND SIMILARLY THE EMPLOYEES CONTRIBUTION O F ESI HAS ALSO BEEN PAID BELATEDLY FOR THE MONTHS OF MAY, JUNE 2010 AND JANUARY, 2011. HE THEREFORE TREATED SUCH BELATED PAY MENTS OF RS. 6,75,558/- AS INCOME OF THE ASSESSEE U/S. 2(24)( X) R.W.S. 36(1)(VA) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO, DELETED THE SAME BY FOLLOWING THE DECISION OF THE A BENCH OF ITAT, HYDERABAD IN THE C ASE OF VBC INDUSTRIES LTD., HYDERABAD VS. DY.CIT FOR THE AY. 2008- 09 IN ITA NO. 143/HYD/2013, DT. 08-05-2015. AGAINST TH E RELIEF GRANTED BY THE CIT(A), REVENUE IS IN APPEAL B EFORE US. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT ADDITION MADE BY THE AO IS ONLY OF RS. 6,75,558/- AND THEREFORE, THE TAX EFFECT THEREON IS LES S THAN RS. 10 LAKHS AND IN VIEW OF THE CBDT CIRCULAR NO.21/ 2015 DATED 10 TH DECEMBER, 2015, BEARING F.NO.279/ MISC.142/2007-ITJ(PT). REVENUES APPEAL IS LIABLE TO BE DISMISSED. EVEN OTHERWISE, ON MERITS ALSO, HE PLACED RELIANCE UPON THE CO-ORDINATE BENCH DECISION OF THE TRIBUNAL I N THE CASE OF VYBRANT DIGITAL LIMITED VS. DY.CIT IN ITA NO. 1769/HYD/2012 FOR THE AY. 2008-09. ITA. NO. 959/HYD/2017 :- 3 - : 4. REVENUE, ON THE OTHER HAND, RELIED UPON THE DECISI ON OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. G UJARAT STATE ROAD TRANSPORT CORPORATION (2014) [41 TAXMANN.COM 100] (GUJARAT) AND THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. MERCHEM LTD., (2015) [61 TAXMANN.COM 119] (KERALA) IN SUPPORT OF THE ADDITION MA DE BY THE AO. 5. HAVING REGARD TO THE RIVAL CONTENTIONS, WE FIND THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS. 10 LAKHS AND THEREFORE, IT IS LIABLE TO BE DISMISSED ON THOSE GROUND S ALONE. EVEN ON MERITS, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO-ORDINATE BENCH O F ITAT IN THE CASE OF VBC INDUSTRIES LTD., HYDERABAD VS. DY.C IT (SUPRA), ON WHICH THE CIT(A) HAS RELIED UPON FOR GR ANTING RELIEF TO THE ASSESSEE. IN THE SAID DECISION, THE DECISIONS OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJA RAT STATE ROAD TRANSPORT CORPORATION (SUPRA), RELIED UPON B Y THE LD.DR, HAS BEEN CONSIDERED. IN VIEW OF THE SAME, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) EVEN ON MERITS. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MARCH, 2018 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED 7 TH MARCH, 2018 TNMM ITA. NO. 959/HYD/2017 :- 4 - : COPY TO : 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2( 2 ), HYDERABAD. 2. M/S. TALWAR MOBILES PVT. LTD., PATNY PLAZA, S.P. ROAD, SECUNDERABAD. 3. CIT(A)-2 , HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.