M/S JAIPUR STOCK SECURITIES LTD., Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, Jaipur

ITA 992/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4034 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 28-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: TDS
• Section: 37(1); 250

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC H 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 VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 992/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 M/S JAIPUR STOCK SECURITIES LTD., STOCK EXCHANGE BUILDING, JAWAHAR LAL NEHRU MARG, MALVIYA NAGAR, JAIPUR CUKE VS. THE ACIT, CIRCLE-06, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCJ0362L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/08/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 19/08/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 25.06.2018 FOR ASSESSMENT YEAR 2014-15 . 2. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF ADDITION OF RS. 51,618/- TOWARDS INTEREST ON BANK F IXED DEPOSITS. IN THIS REGARD, THE LD. AR SUBMITTED THAT DURING THE YEAR, THERE WE RE PREMATURE WITHDRAWALS OF FIXED DEPOSITS MAINTAINED WITH BANKS. IN THIS REGA RD, THE BANKS HAD INITIALLY CREDITED INTEREST ON ACCRUAL BASIS AND DEDUCTED TDS THEREON, HOWEVER, WHEN THE PAYMENT WAS MADE, THE ASSESSEE HAD ACTUALLY REC EIVED LOWER INTEREST ON SUCH DEPOSITS. THE ASSESSEE HAS CREDITED INTEREST O N FDRS AS ACTUAL RECEIVED AFTER DEDUCTION OF PREMATURE CHARGES AND THEREFORE, IT IS NOT THE CASE THAT ASSESSEE HAS EARNED HIGHER INCOME AND HAS NOT OFFER ED THE ENTIRE AMOUNT ITA NO. 992/JP/2018 M/S JAIPUR STOCK SECURITIES LTD., JAIPUR VS. ACIT, JAIPUR 2 WHEREAS CLAIMED TDS ON THE SAME. IT WAS SUBMITTED T HAT WHATEVER INTEREST HAS BEEN RECEIVED BY THE ASSESSEE, THE SAME HAS BEEN OF FERED TO TAX. IT WAS FURTHER SUBMITTED THAT SINCE TDS HAS ALREADY HAPPEN ED AT THE TIME OF ACCRUAL BY THE BANK, THE ASSESSEE HAD NO OPTION BUT TO CLAI M THE WHOLE OF THE TDS. 3. PER CONTRA, THE LD. DR SUBMITTED THAT DURING TH E COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS, THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE TO PROVE THAT THE FDRS WERE ENCASHED PREMA TURELY, THEREFORE, IN ABSENCE OF ANY EVIDENCE ON RECORD OR CONFIRMATION F ROM THE BANK, THE CONTENTION OF THE ASSESSEE THAT DUE TO PREMATURE EN CASHMENT OF FDRS, THE ASSESSEE HAS RECEIVED LOWER INTEREST INCOME AS AGAI NST THE INTEREST SO REFLECTED IN FORM NO. 26AS CANNOT BE ACCEPTED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS SO CLAIMED B Y THE ASSESSEE THAT THE INTEREST THOUGH INITIALLY ACCRUED AT THE REGULAR INTERVALS B Y THE BANK AND CORRESPONDING TDS HAS BEEN DONE WHICH GOT REFLECTED IN FORM 26AS, HOWEVER, GIVEN THAT THERE WAS PREMATURE WITHDRAWALS OF FIXED DEPOSITS, THE ASSESSEE BANK HAS ACTUALLY RECEIVED LOWER INTEREST THAN WHAT HAS BEEN REFLECTED IN FORM 26AS AND THEREFORE, THE INTEREST ACTUALLY RECEIVED WAS RIGHT LY OFFERED TO TAX AND THE REMAINING INTEREST SO REFLECTED IN FORM 26AS SINCE NOT RECEIVED AT FIRST PLACE HAS NOT BEEN OFFERED TO TAX AND THUS, THE ACTION OF THE ASSESSING OFFICER IS NOT CORRECT. CONCEPTUALLY, WE AGREE THAT MERE REFLECTIO N OF CERTAIN TRANSACTION IN FORM 26AS IS NOT DETERMINATIVE OF HOLDING SUCH TRAN SACTION AS TAXABLE TRANSACTION IN THE HANDS OF THE ASSESSEE. HOWEVER, GIVEN THAT THE TRANSACTION HAS BEEN REFLECTED IN FORM 26AS, THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THAT SUCH TRANSACTION DOESNT REPRESENT REAL INCOME IN ITS HANDS. IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE HAS FAILED TO ADDUC E ANY EVIDENCE IN SUPPORT OF ITS CONTENTION THAT IT HAS RECEIVED LOWER INTEREST INCOME THAN WHAT HAS BEEN ITA NO. 992/JP/2018 M/S JAIPUR STOCK SECURITIES LTD., JAIPUR VS. ACIT, JAIPUR 3 REFLECTED IN FORM 26AS. FURTHER, NOTHING HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT THE FORM 26AS HAS BEEN SUBSEQUENTLY MO DIFIED/AMENDED TO REFLECT THE ACTUAL INTEREST PAYMENT TO THE ASSESSEE . IN THE RESULT, THE GROUND SO TAKEN IS DISMISSED. 5. IN GROUND NO. 2, ASSESSEE HAS CHALLENGED THE CON FIRMATION OF DISALLOWANCE OF ESI/EPF CONTRIBUTIONS OF RS. 115,84 9/- U/S 36(1)(VA) OF THE ACT. IN THIS REGARD, UNDISPUTED FACTS ARE THAT THESE CON TRIBUTIONS WERE DEPOSITED BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCO ME U/S 139(1) OF THE ACT. RECENTLY, WE HAVE DEALT WITH THE ISSUE IN CASE OF M /S K.S.AUTOMOBILES LTD. VS. DCIT (ITA NO. 1184/JP/18 AND 1185/JP/18 DATED 08.03.2019 ) AND THE RELEVANT FINDING IS AS UNDER:- 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DE CISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE DECISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 99 DTR 131 AS WELL AS DECI SION IN CASE OF CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 363 ITR 307 AND IN CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. 366 ITR 163. WE FURTHER NOTE THAT THE LD. CIT(A) THOUGH HAS NOT DISPUTED TH E VARIOUS DECISIONS OF HONBLE HIGH COURT HOWEVER, DISALLOWANCE MADE BY TH E AO ARE SUSTAINED AS HE MISUNDERSTOOD THE DECISION OF HONBLE JURISDI CTIONAL HIGH COURT IN CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY COR PORATION LIMITED IN DB ITA NO. 10,11 & 12/2018 DATED 13.03.2018. IN THE CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED (SUPRA) THE HONBLE HIGH COURT HAS CONSIDERED THIS ISSUE IN PA RA 4 TO 6 AS UNDER:- 4. SO FAR AS QUESTION NO. 1 IS CONCERNED, THE SAME IS NOW COVERED BY THE DECISIONS OF THIS COURT IN PRINCIPAL COMMISSION ER OF INCOME-TAX V/S ITA NO. 992/JP/2018 M/S JAIPUR STOCK SECURITIES LTD., JAIPUR VS. ACIT, JAIPUR 4 RAJASTHAN STATE SEED CORPORATION LTD. [2016] 386 IT R 267 (RAJ) WHEREIN IT HAS BEEN HELD AS UNDER:- IN SO FAR AS THE EXPENDITURE INCURRED ON STATE RENE WAL FUND IS CONCERNED, THE SAID EXPENDITURE ALSO GOES TO SHOW T HAT THE RENEWAL FUND WAS SET UP BY THE STATE GOVERNMENT AND WAS CREATED WITH THE OBJECT OF PROVIDING A SAFETY NET FOR THE WORKERS LIKELY TO BE EFFECTED BY RESTRICTING IN THE STATE PUBLIC ENTERPRISE AND THAT A FINDING O F FACT HAS BEEN RECORDED THAT THE CONTRIBUTION MADE TO THE STATE RE NEWAL FUND IS SOLELY FOR THE PURPOSES OF THE WELFARE AND BENEFIT OF THE EMPLOYEES. IN OUR VIEW, IT IS FOR THE ASSESSEE TO DECIDE WHETHER ANY EXPENDITURE SHOULD BE INCURRED IN THE COURSE OF BUSINESS AND EXPENDITURE OF THIS NATURE BEING FOR BUSINESS EXPEDIENCY IS CERTAINLY ALLOWABLE DEDU CTION UNDER SECTION 37(1) OF THE ACT. IN OUR VIEW ANY NORMAL EXPENDITUR E FOR THE WELFARE AND BENEFIT OF THE EMPLOYEES IS ALLOWABLE EXPENDITURE U NDER SECTION 37(1), THE TRIBUNAL HAS COME TO A FINDING OF FACT THAT IT WAS A LEGAL OBLIGATION OF THE RESPONDENT-ASSESSEE TOWARDS CONTRIBUTION OF THE SAID AMOUNT TO THE STATE RENEWAL FUND AND THERE BEING A LEGAL OBLIGATI ON AS WELL IN OUR VIEW THE TRIBUNAL HAS COME TO A CORRECT CONCLUSION. IN VIEW OF THE ABOVE, QUESTION NO. 1 IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 6. WITH REGARD TO ISSUE NO. 2 AND 3 THE CONTROVERSY IS PENDING BEFORE THE SUPREME COURT IN C.I.T., JAIPUR VS/ MS STATE BA NK OF BIKANER AND JAIPUR IN SLP NO. 16249/2014, THEREFORE, SUBJECT T O DECISION OF SLP, FOR THE PRESENT, THESE ISSUES ARE DECIDED ON IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. IT WILL BE OPEN FOR THE DEPAR TMENT TO RECOVER THE AMOUNT IF THE DECISION IS IN THEIR FAVOUR. ITA NO. 992/JP/2018 M/S JAIPUR STOCK SECURITIES LTD., JAIPUR VS. ACIT, JAIPUR 5 THUS, IT IS CLEAR THAT THE HONBLE JURISDICTIONAL H IGH COURT HAS FOLLOWED THE EARLIER DECISIONS IN CASE OF PCIT VS. RAJASTHAN STATE SEED CORPORATION LIMITED 386 ITR 267 AS WELL AS DECISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR (SUPRA). ALL THESE D ECISIONS WHICH WERE ALLOWED BY THE HONBLE JURISDICTIONAL HIGH COURT AR E IN FAVOUR OF THE ASSESSEE HOWEVER, IN THE CONCLUSION IN PARA 6 THERE IS A TYPOGRAPHICAL MISTAKE WHEREIN IT IS STATED THESE ISSUES DECIDED IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. THE WHOLE DEC ISION OF THE HONBLE HIGH COURT HAS TO BE CONSIDERED IN THE CON TEST OF THE DECISION FOLLOWED AND THE SUBSEQUENT LINE WHICH SAYS IT WIL L BE OPENED FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION I N THEIR FAVOUR WHICH MEANS THAT IN CASE OF FURTHER APPEAL BEFORE HONBLE SUPREME COURT IF DECISION IS DELIVERED IN FAVOUR OF THE DEPARTMENT I T CAN RECOVER THE AMOUNT. THEREFORE, EVEN THE DECISION WHICH IS RELIE D UPON THE LD. CIT(A) THE SAME IS IN FAVOUR OF THE ASSESSEE THOUGH DUE TO TYPOGRAPHICAL MISTAKE IT WAS MISUNDERSTOOD BY THE LD. CIT(A) AS I N FAVOUR OF THE REVENUE. ACCORDINGLY, IN VIEW OF A SERIES OF DECISI ONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE AND FURTHER HONBLE SUPREME COURT IN CASE OF PCIT VS. RAJASTHAN STATE B EVERAGES CORPORATION LTD. 250 TAXMANN 16 HAS DISMISSED THE S LP FILED BY THE DEPARTMENT THIS ISSUE IS DECIDED IN FAVOUR OF THE A SSESSEE AND AGAINST THE REVENUE. HENCE, DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF & ESI ARE D ELETED. 6. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT, THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE RESULT, THE GROUND OF APPEAL IS AL LOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ITA NO. 992/JP/2018 M/S JAIPUR STOCK SECURITIES LTD., JAIPUR VS. ACIT, JAIPUR 6 ORDER PRONOUNCED IN THE OPEN COURT ON 19/08/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/08/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S JAIPUR STOCK SECURITIES LTD., JA IPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-6, 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. 992/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR