RAJASTHAN COTTAGE INDUSTRIES, JAIPUR V. INCOME TAX OFFICER, WARD-5-1, JAIPUR

ITA 983/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7765 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: MADHUKAR GARG
• Keywords: Principle of natural justice; Revenue expenditure
• Section: 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 983/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 RAJASTHAN COTTAGE INDUSTRIES SHILPGRAM COMPLEX, GOLIMAR GARDEN, AMER ROAD, JAIPUR. CUKE VS. THE ITO, WARD 5(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABFR 1944 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MADHUKAR GARG (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/04/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 24/04/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 21.06.2018 OF THE LD. CIT (A), JAIPUR FOR A.Y. 2013 -14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN CONF IRMING THE DISALLOWANCE OF RS. 5,96,932/- BEING EMPLOYEES CON TRIBUTION TOWARDS PF AND RS. 6492/- BEING EMPLOYEES CONTRIBU TION TOWARDS ESI ON THE GROUND THAT THE SAME WERE DEPOSITED LATE . THE SAID ACTION IS ILLEGAL AND UNJUSTIFIED. ITA NO. 983/JP/2018 RAJASTHAN COTTAGE INDUSTRIES VS. ITO 2 2. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN RELYI NG ON THE DECISIONS OF HONBLE RAJASTHAN HIGH COURT WITHOUT D ISCLOSING THE SAME TO THE ASSESSEE. THE SAID ACTION IS AGAINST TH E PRINCIPLES OF NATURAL JUSTICE AND THE ADDITION CONFIRMED DESERVES TO BE DELETED. 2. THE ONLY ISSUE IN THIS APPEAL IS REGARDING DISAL LOWANCE OF EMPLOYEES CONTRIBUTION TO PF & ESI AFTER THE DUE DA TE OF PAYMENT AS PER RESPECTIVE ACTS PF & ESI HOWEVER, IT WAS PAID B EFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT . THE LD. CIT(A) HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS PAID THE CO NTRIBUTION TOWARDS TO PF & ESI PRIOR TO DUE DATE OF FILING OF RETURN OF I NCOME U/S 139(1) OF THE ACT BUT THE CLAIM WAS DISALLOWED ON THE BASIS O F THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF IN CAS E OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED IN DB ITA NO. 10,11 & 12/2018 DATED 13.03.2018 WHICH WAS MISUNDER STOOD BY THE LD. CIT(A). WE NOTE THAT THERE WAS TYPOGRAPHICAL MISTAK E IN THE SAID DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT W HEREAS THE HONBLE HIGH COURT HAS FOLLOWED THE EARLIER DECISION IN CAS E OF CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 363 ITR 307. THE LD. AR HAS POINTED OUT THAT THE DECISION OF HONBLE JURISDICTIONAL HIGH CO URT IN CASE OF PCIT VS. RAJASTHAN STATE BEVERAGES CORPORATION LTD. 250 TAXMANN 32 HAS BEEN UPHELD BY THE HONBLE SUPREME COURT REPORT ED IN 250 ITA NO. 983/JP/2018 RAJASTHAN COTTAGE INDUSTRIES VS. ITO 3 TAXMANN 16. THUS, THE ISSUE IS COVERED BY A SERIES OF DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE DEC ISION IN CASE OF PCIT VS. RAJASTHAN STATE BEVERAGES CORPORATION LTD. (SUP RA) AS HELD IN PARA 5 AS UNDER:- 5. SO FAR AS THE QUESTION RELATING TO PRIVILEGE FE ES AMOUNTING TO RS.26.00 CRORES IN THE INSTANT YEAR AS WELL AS THE DEDUCTION OF CLAIM OF RS.17,80,765/- ON ACCOUNT OF PROVIDENT FUN D (PF) AND ESI IS CONCERNED, THIS COURT HAS EXTENSIVELY CONSID ERED THE AFORESAID TWO QUESTIONS IN ASSESSEE'S OWN CASE VIDE JUDGMENT AND ORDER DT.26.05.2016 REFERRED TO (SUPRA) AND HAS HELD THAT THE PRIVILEGE FEES BEING A REVENUE EXPENDITURE, IS REQU IRED TO BE ALLOWED AS A REVENUE EXPENDITURE. THIS COURT IN THE AFORESAID CASE HAS ALSO ALLOWED THE CLAIM OF THE ASSESSEE, IN SO FAR AS PAYMENT OF PF & ESI ETC. IS CONCERNED, ON THE FINDI NG OF FACT THAT THE AMOUNTS IN QUESTION WERE DEPOSITED ON OR BEFORE THE DUE DATE OF FURNISHING OF THE RETURN OF INCOME AND TAKI NG IN CONSIDERATION JUDGMENT OF THIS COURT IN COMMISSIONE R OF INCOME TAX VS. STATE BANK OF BIKANER & JAIPUR AND COMMISSI ONER OF INCOME TAX VS. JAIPUR VIDYUT VITARAN NIGAM LTD. (20 14) 363 ITR 70 (RAJ.) AND ACCORDINGLY BOTH THE QUESTIONS ARE CO VERED BY THE AFORESAID JUDGMENT AND AGAINST THE REVENUE. THE SAID DECISION WAS CHALLENGED BY THE REVENUE BE FORE THE HONBLE SUPREME COURT BUT THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT REPORTED 250 TAXMANN 32. ACCORDINGLY, ITA NO. 983/JP/2018 RAJASTHAN COTTAGE INDUSTRIES VS. ITO 4 DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT O F EMPLOYEES CONTRIBUTION TO PF & ESI IS DELETED AND CLAIM OF TH E ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/04/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/04/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RAJASTHAN COTTAGE INDUSTRIES, JAIPUR . 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 5(1), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 983/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR