DCIT, CC-1(3), Kolkata, Kolkata V. M/s Rungta Sons Pvt . Ltd., Kolkata

ITSSA 42/KOL/2015

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3070 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-02-2015
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Keywords: Capital asset; Business expenditure; Question of law; Revenue expenditure; Capital expenditure
• Section: 43B; 143(3); 153A; 37(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM IT(SS)A NO.42/KOL/2015 ( / ASSESSMENT YEAR:2011-2012) DCIT, CC-1(3), KOLKATA AAYAKAR BHAWAN POORVA, 3 RD FLOOR, 110-SHANTIPALLY, KOLKATA-700107 VS. M/S RUNGTA SONS PVT. LTD., 8A, EXPRESS TOWER, 42A, SHAKESPEARE SARANI, KOLKATA-700017 ./ ./PAN/GIR NO.: AABCR 2356 N ( /APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI G.MALLIKARJUNA, CIT-DR ASSESSEE BY : SHRI SUBASH AGARWAL, ADVOCATE / DATE OF HEARING : 03/01/2017 /DATE OF PRONOUNCEMENT 15/03/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINI NG TO THE ASSESSMENT YEAR 2011-2012, IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-20, KOLKATA, IN APPEAL NO.253/CC-1(3)/CIT(A) -20/13-14, DATED 10- 12-2014, WHICH IN TURN ARISES OUT OF AN ORDER PASSE D BY THE ASSESSING OFFICER (AO) UNDER SECTION 153A/153D/143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 07.03.2014. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T A SEARCH & SEIZURE OPERATION, U/S.132 OF THE ACT, WAS CONDUCTED ON 06. 02.2012 AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE G ROUP. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 27.08.2011 A T TOTAL INCOME OF RS.578,59,67,710/-. HOWEVER, NO ASSESSMENT U/S.143( 3) WAS MADE. IN CONSEQUENCE TO SEARCH, THE AO ISSUED NOTICE U/S.153 A ON 04.02.2013 AND THE ASSESSEE FILED ITS RETURN ON 21.03.2013 AT THE SAME TOTAL INCOME AS DECLARED IN THE ORIGINAL RETURN. THEREAFTER, THE AO MADE ASSESSMENT IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 2 U/S.153A/143(3) OF THE ACT AT TOTAL INCOME OF RS.5 90,83,70,920/-, WHEREIN THE AO DISALLOWED (EXPENSES BOOKED UNDER THE HEAD ENVIRONMENT & ECOLOGY IN ASSESSEE`S PROFIT AND LOSS ACCOUNT), ON ACCOUNT OF NET PRESENT VALUE (NPV), OF RS.12,14,61,050/- ON THE GR OUND THAT IT WAS NON- REVENUE IN NATURE, RS.2,30,271/- BY INVOKING SECTIO N 2(24)(X) READ WITH SECTION 36(1)(VA), RS.1,74,827 BY INVOKING SECTION 36(1) (II) AND RS.5,37,062/- BY APPLYING SECTION 14A, RESPECTIVELY . 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS PARTLY ALLOWED THE A PPEAL OF THE ASSESSEE OBSERVING THE FOLLOWINGS :- 7. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE MATERIAL PLACED BY HIM ON RECORD. I PRO POSE TO FIRST DECIDE THE LEGAL ISSUE RAISED BY GROUND NO.1 THAT T HE AO HAD NO JURISDICTION WHILE MAKING THE SEARCH ASSESSMENT U/S 153A TO MAKE ADDITIONS ON ITEMS OF REGULAR ASSESSMENT. IT IS ADM ITTED THAT THE ASSESSEE FILED ITS ORIGINAL RETURN ON 27- 08-2011 B UT NO ASSESSMENT U/S 143(3) WAS MADE. I HOWEVER FIND THAT THE TIME L IMITATION FOR SERVICE OF THE NOTICE U/S 143 (2) HAD NOT EXPIRED O N THE DATE OF THE SEARCH. THE AO THEREFORE RETAINED HIS ORIGINAL JURI SDICTION OF REGULAR ASSESSMENT IN ADDITION TO SEARCH ASSESSMENT. I AM O F THE CONSIDERED VIEW THAT THE AO IN THE GIVEN FACTS OF THE CASE HAD JURISDICTION ON ITEMS OF REGULAR ASSESSMENT AS WELL AS ON THOSE OF SEARCH ASSESSMENT. I FIND SUPPORT FROM THE DECISION OF THE HON'BLE SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL L OGISTICS LTD IN ITA NO 5018 TO 5022 & 5059/M/10 WHEREIN IT WAS HELD THA T '(A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORI GINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A F OR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSES SMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE C ONTEXT OF RELEVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH'. I THEREFORE HOLD THAT THE AO IN THE PRESENT CASE HAD JURISDICTION TO MAKE ADDITIONS ON ITEMS OF REGULAR ASSESSMENT. GROUND NO 1 IS DISMISSED. 8. THE LD AR HAS ARGUED THAT THE AO WAS NOT JUSTIFI ED IN DISALLOWING THE NPV OF RS.12,14,61,050/- ON THE GROUND THAT THE SAME WAS NON- IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 3 REVENUE IN NATURE. I HAVE CONSIDERED THE ARGUMENTS OF THE LD AR AND THE RELEVANT JUDICIAL DECISIONS. THE ISSUE THAT REQ UIRES ADJUDICATION IS WHETHER OR NOT THE PAYMENT OF NPV MADE BY THE ASSES SEE TO CARRY ON ITS MINING ACTIVITIES ON FOREST LAND IS ALLOWABL E AS REVENUE EXPENDITURE. I NOTE THAT THE NPV WAS PAID BY THE AS SESSEE AS PER THE DIRECTIONS OF THE APEX COURT AND AS PER THE GUIDELI NES ISSUED BY THE MINISTRY OF ENVIRONMENT & FOREST. THE APEX COURT HE LD THAT EVERY MINING AGENCY USING AND CONVERTING FOREST LAND TO N ON-FOREST PURPOSE HAD TO PAY A FEE IN THE FORM OF NPV FOR CONTINUING CARRYING ON OF THE BUSINESS. I THEREFORE FIND MERIT IN THE ARGUMENT TH AT THE NPV WAS STATUTORY OBLIGATION OF THE ASSESSEE AND NON-PAYMEN T OF NPV COULD LEAD TO THE STOPPAGE OF THE BUSINESS. THE APEX COUR T HAS IN THE CASE OF BIKANER GYPSUMS LTD SUPRA HELD THAT 'WHERE THE A SSESSEE HAS AN EXISTING RIGHT TO CARRY ON A BUSINESS, ANY EXPENDIT URE MADE BY IT DURING COURSE OF BUSINESS FOR THE PURPOSE OF REMOVA L OF ANY RESTRICTION OR OBSTRUCTION OR DISABILITY WOULD BE O N REVENUE ACCOUNT, PROVIDED THE EXPENDITURE DOES NOT ACQUIRE ANY CAPIT AL ASSET. PAYMENTS MADE FOR REMOVAL OF RESTRICTION, OBSTRUCTI ON OR DISABILITY MAY RESULT IN ACQUIRING BENEFITS TO THE BUSINESS BU T THAT BY ITSELF WOULD NOT ACQUIRE ANY CAPITAL ASSET'. THE FACTS OF THE CASE CLEARLY SUGGEST THAT THE ASSESSEE WAS COMPELLED TO MAKE THE PAYMENT OF NPA TO FACILITATE TO CONTINUE ITS MINING BUSINESS A ND THEREFORE THE DECISION OF THE APEX COURT IN THE CASE OF BIKANER G YPSUMS LIMITED (SUPRA) WAS SQUARELY APPLICABLE IN THE PRESENT CASE . THE HON'BLE KARNATAKA BENCH OF THE ITAT HAS EXPRESSED SIMILAR V IEW IN THE CASE OF NATIONAL ALUMINIUM CO LTD VS DCIT 101 TTJ (CTK) 948 WHEREIN IT WAS HELD THAT WHEN A PAYMENT IS MADE AS PER THE SP ECIFIC DIRECTION OF THE GOVERNMENT OF LNDIA, IT WOULD BE IN THE BUSI NESS INTEREST OF THE ASSESSEE TO ABIDE BY SUCH DIRECTIONS AND ACCORDINGL Y THE PAYMENT BEING A STATUTORY REQUIREMENT HAS TO BE CONSIDERED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS AND HA S GOT DIRECT CONNECTION WITH THE BUSINESS ACTIVITY OF THE ASSESS EE. THE CASE OF THE ASSESSEE IS DULY SUPPORTED BY THE DECISION OF T HE HON'BLE AHMEDABAD BENCH OF THE ITAT IN THE CASE OF JCIT VS DEWERSON INDUSTRIES LIMITED 2005 TIOL 236 (AHD) WHEREIN IT W AS HELD THAT PAYMENT OF SIMILAR NATURE TO THE MINISTRY OF ENVIRO NMENT & FOREST OF THE GOVERNMENT OF GUJARAT WAS ALLOWABLE AS BUSINESS EXPENDITURE. THE HON'BLE MUMBAI BENCH OF THE ITAT HAS IN, THE CA SE OF IDBI VS DCIT 91 ITD 34 HELD THAT EXPENDITURE BY ASSESSEE IN ACCORDANCE WITH STATUTORY GUIDELINES IS ALLOWABLE BUSINESS EXP ENDITURE. IN THE CASE OF CIT VS RUNGTA MINES (P) LTD 205 ITR 335, TH E JURISDICTIONAL HIGH COURT HAS HELD THAT WHERE A TRADER BY COMPULSI ON OF STATUTORY OBLIGATION HAS TO INCUR AN EXPENDITURE AS A COMPELL ING REQUISITE FOR CARRYING ON HIS TRADE, THE EXPENDITURE RESULTING IN A CAPITAL ASSET IN THE HANDS OF A THIRD PARTY, IS TO BE TAKEN AS REVEN UE EXPENDITURE BECAUSE NO ASSET ARISES TO THE TRADER BY REASON OF SUCH EXPENDITURE. IT WAS FURTHER HELD THAT WHERE LAW IMPOSES ON THE A SSESSEE AN OBLIGATION TO INCUR EXPENSES FOR BEING PERMITTED TO PURSUE ITS TRADING ACTIVITY, THE EXPENDITURE WOULD BE AN OUTGOING FROM THE PROFITS OF THE TRADE. I ALSO NOTE THAT BY MAKING THE PAYMENT OF NP V, NO TANGIBLE ASSET CAME INTO EXISTENCE. AND FURTHER, THE SAID PA YMENT WAS NOT IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 4 VOLUNTARY AS IT WAS A PRE-CONDITION TO ENABLE THE A SSESSEE TO CARRY ON ITS MINING ACTIVITIES. ALSO, AS THE PAYMENT OF NPV BEING STATUTORY REQUIREMENT HAD TO BE PAID BY THE ASSESSEE TO CONTI NUE TO CARRY ON ITS MINING ACTIVITIES, I AM OF THE CONSIDERED VIEW THAT SUCH PAYMENT IS WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF CARRYING ON THE BUSINESS. THE INCURRING OF SUCH EXPENSES SHOULD THEREFORE BE CONSIDERED AS HAVING DIRECT NEXUS WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. THE ASSESSEE BY MAKING PAYMENT OF NPV GOT NO FRESH RIGH T TO MINING BUT THE SAID PAYMENT WAS MADE TO OVERCOME RESTRICTION O R OBSTRUCTION OR DISABILITY THAT HAD ARISEN IN CONTINUING OF THE MIN ING BUSINESS. I AM OF THE OPINION THAT MERELY BECAUSE IT WAS ONE-TIME PAY MENT, IT COULD NOT BE CONSIDERED AS CAPITAL IN NATURE. THE APEX COURT HAS IN THE CASE OF EMPIRE JUTE COMPANY LTD VS CIT 124 ITR 1 HELD THAT IF THE ADVANTAGE CONSISTED OF MERELY FACILITATING ASSESSEE 'S TRADING OPERATIONS OR ENABLING THE MANAGEMENT AND CONDUCT O F THE ASSESSEE'S BUSINESS TO BE CARRIED ON MORE EFFICIENT LY OR MORE PROFITABLY WHILE LEAVING THE FIXED CAPITAL UNTOUCHE D, THEN THE EXPENDITURE WOULD BE ON REVENUE ACCOUNT EVEN THOUGH THE ADVANTAGE MAY BE ENDURED FOR AN INDEFINITE FUTURE. THE HONBLE SPECIAL BENCH OF THE ITAT, KOLKATA HAS TAKEN SIMILA R VIEW IN THE CASE OF PEERLESS SECURITIES LIMITED VS JCIT 93 TTJ 325 ( SB). ABOVE ALL, I FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECI SIONS OF THE JURISDICTIONAL ITAT IN THE CASE OF FEEGRADE & CO (P ) LTD IN. ITA NO. 934/KOL/2009 AND ALSO IN ASSESSEE'S OWN CASE FOR TH E ASSESSMENT YEAR 2006-07 IN ITA NO. 933/KOL/2009. THE AO HAS HI MSELF CONCEDED IN THE IMPUGNED ORDER THAT THE JURISDICTIO NAL ITAT HAD IN THE ASSESSMENT YEAR 2006-07 DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE, IT IS TO BE HELD TH AT THE EXPENDITURE OF RS.12,14,61,050/- INCURRED BY THE ASSESSEE AS NPV I S REVENUE IN NATURE WHICH IS ALLOWABLE AS BUSINESS EXPENDITURE U /S 37(1). THE ADDITION OF RS.12,14,61,050/- IS DELETED. GROUND NO 3 IS ALLOWED. 9. THE LD AR HAS CONTENDED THAT THE DISALLOWANCE OF RS.2,30,271/- ON ACCOUNT OF EMPLOYEES' CONTRIBUTION TOWARDS PF BY INVOKING SECTION 2(24)(X) READ WITH SECTION 36(1)(VA) WAS NO T JUSTIFIED EVEN ON THE MERITS OF THE CASE. I HAVE CONSIDERED THE SUBMI SSIONS OF THE ASSESSEE AND ALSO PERUSED THE MATERIAL PLACED ON RE CORD. THERE IS NO DISPUTE THAT EMPLOYEES' CONTRIBUTION TOWARDS PF WAS DEPOSITED BEFORE THE DUE DATE FOR THE FILING OF THE RETURN. THE CONTENTIONS OF THE ASSESSEE IN THIS REGARD ARE DULY SUPPORTED BY THE T AX AUDIT REPORT AND COPY OF CHALLANS THAT WAS PLACED ON RECORD IN C OURSE OF THE APPELLATE PROCEEDINGS. I FIND MERIT IN THE CONTENT ION OF THE LD AR THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY T HE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/ S VIJAY SHREE LTD (ITAT NO 245 OF 2011 GA NO 2607 OF 2011 WHEREIN IT WAS HELD THAT : 'THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WH ETHER THE DELETION OF THE ADDITION BY THE ASSESSING OFFICER ON ACCOUNT OF EMPLOYEES' CONTRIBUTION TO ESI AND PF BY INVOKING THE PROVISIO N OF SECTION 36(1)(VA) READ WITH SECTION 2 (24) (X) OF THE ACT W AS CORRECT OR NOT. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF THE DEC ISION OF THE IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 5 SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS ALOM EXTRUSION LTD, REPORTED IN 2009 VOL 390 ITR 306, HE LD THAT THE DELETION WAS JUSTIFIED. BEING DISSATISFIED, THE REV ENUE HAS COME UP WITH THE PRESENT APPEAL. AFTER HEARING MR SINHA, LD ADVOCATE, APPEARING ON BEHALF OF THE APPELLANT AND AFTER GOIN G THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMIS SIONER OF INCOME TAX VS ALOM EXTRUSION LTD, WE FIND THAT THE SUPREME COURT IN THE AFORESAID CASE HAS HELD THAT THE AMENDMENT TO T HE SECOND PROVISION THE SEC 43B OF THE INCOME TAX ACT, AS INT RODUCED BY FINANCE ACT, 2003 WAS CURATIVE NATURE AND IS REQUIR ED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1ST APRIL, 1988. S UCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EM PLOYEES' CONTRIBUTION BEYOND DUE DATE WAS DEDUCTIBLE BY INVO KING THE AFORESAID AMENDED PROVISIONS OF SECTION 43B OF THE ACT'. I THEREFORE HOLD IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT THAT THE DISALLOWANCE OF RS.2,30,271/- ON ACCOUNT OF EMPLOYE ES' CONTRIBUTION TOWARDS PF IS NOT SUSTAINABLE AS THE SAME WAS DEPOS ITED BEFORE THE DUE DATE FOR THE FILING OF THE RETURN. IN VIEW OF T HE ABOVE, THE ADDITION OF RS.2,30,271/- IS DELETED. GROUND NO 4 IS ALLOWED . 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE REVENUE IS IN APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A) IS ERRED IN TREATING THE NPV AS REVENUE EXPENSE WHEREAS ITS TRUE NATURE IS CAPITAL EXPENDITURE. (2) IN THE FACTS AND CIRCUMSTANCES AND LAW POINT O F THE CASE, THE ORDER OF THE CIT(A) IS ERRONEOUS BECAUSE IT RELIED ON THE SEC. 43B(B) OF THE ACT WHEREAS, THE PRESENT ISSUE IS INV OLVED WITH SEC. 36(1) (VA) READ WITH 2(24) (X) OF THE ACT. (3) IN THE FACTS AND CIRCUMSTANCES AND LAW POINT O F THE CASE, LD. CLT(A) IS ERRED IN DEPENDING ON THE CASE LAW VIJAY SHREE LTD., WHICH IS BEST ON ANOTHER CASE LAW ALOM EXTRUSIONS L TD., WHEREAS, THE ISSUE INVOLVED IN ALOM EXTRUSIONS LTD. IS QUITE DIFFERENT FROM THE PRESENT ISSUE. (4) THE APPELLANT CRAVE LEAVE TO MAKE ANY ADDITION , ALTERATION, MODIFICATION ETC. OF GROUND OR GROUNDS BEFORE OR IN COURSE OF APPELLATE PROCEEDINGS. 5. THE FIRST GROUND RAISED BY THE REVENUE IS WHETHER O R NOT THE PAYMENT OF NPV MADE BY THE ASSESSEE TO CARRY ON ITS MINING ACTIVITIES ON FOREST LAND IS ALLOWABLE AS REVENUE E XPENDITURE. 5.1 LD DR FOR THE REVENUE HAS VEHEMENTLY SUBMITTED BEFORE US THAT THE PAYMENT OF NPV MADE BY THE ASSESSEE TO CARRY ON ITS MINING ACTIVITIES ON FOREST IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 6 LAND IS CAPITAL EXPENDITURE BECAUSE IT GIVES LONG T ERM BENEFIT TO THE ASSESSEE. IN ADDITION TO THIS, THE LD. DR FOR THE REVENUE HAS ALSO PRIMARILY RELIED ON THE FINDINGS OF THE AO WHICH WE HAVE ALREADY NOTED IN O UR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 5.2 ON THE OTHER HAND, THE LD AR FOR THE ASSESSEE H AS SUBMITTED BEFORE US THAT BY MAKING THE PAYMENT OF NPV, NO TANGIBLE ASSET CA ME INTO EXISTENCE. AND FURTHER, THE SAID PAYMENT WAS NOT VOLUNTARY AS IT WAS A PRE-CONDITION TO ENABLE THE ASSESSEE TO CARRY ON ITS MINING ACTIVITI ES. ALSO, AS THE PAYMENT OF NPV BEING STATUTORY REQUIREMENT HAD TO BE PAID BY T HE ASSESSEE TO CONTINUE TO CARRY ON ITS MINING ACTIVITIES, THEREFORE SUCH PAYM ENT IS WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF CARRYING ON THE BUSINESS. THE I NCURRING OF SUCH EXPENSES SHOULD THEREFORE BE CONSIDERED AS HAVING DIRECT NEX US WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. THE ASSESSEE BY MAKING PAYMENT OF NPV GOT NO FRESH RIGHT TO MINING BUT THE SAID PAYMENT WAS MADE TO OVERCOME RESTRICTION OR OBSTRUCTION OR DISABILITY THAT HAD ARISEN IN CONTIN UING OF THE MINING BUSINESS. MERELY BECAUSE IT WAS ONE-TIME PAYMENT, IT COULD NO T BE CONSIDERED AS CAPITAL IN NATURE. BESIDES, THE SAID ISSUE IS COVERED BY AS SESSEE`S OWN CASE IN ITA NO.933/KOL/2009 WHEREIN THE TRIBUNAL TREATED THE SA ID EXPENDITURE AS REVENUE IN NATURE. 5.3 HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF LD. AR FOR THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FO R THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. THE L D. AR FOR THE ASSESSEE HAS RIGHTLY POINTED OUT THAT THE ASSESSEE BY MAKING PAYMENT OF IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 7 NPV GOT NO FRESH RIGHT TO MINING BUT THE SAID PAYME NT WAS MADE TO OVERCOME RESTRICTION OR OBSTRUCTION OR DISABILITY THAT HAD A RISEN IN CONTINUING OF THE MINING BUSINESS. MERELY BECAUSE IT WAS ONE-TIME PAYMENT, I T COULD NOT BE CONSIDERED AS CAPITAL IN NATURE. BESIDES, THE SAID ISSUE IS CO VERED BY ASSESSEE`S OWN CASE IN ITA NO.933/KOL/2009 WHEREIN THE TRIBUNAL TREATED THE SAID EXPENDITURE AS REVENUE IN NATURE. THEREFORE, WE HOLD THAT LD. CIT(APPEALS) HAS RIGHTLY HELD THA T THE ABOVE EXPENDITURE OF RS.12,14,61,050/- PAID BY THE ASSESS EE AS NPV TO ENABLE THE ASSESSEE TO CARRY ON ITS MINING BUSINESS IS REVENUE IN NATURE, WHICH IS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37(1) OF THE ACT. THEREFORE, WE UPHOLD THE ORDER OF LD. CIT(APPEALS) BY REJECTING GROUND N O. 1 OF THE APPEAL TAKEN BY THE REVENUE. 5.4 IN THE RESULT, THE APPEAL FILED BY THE REVENUE ON GROUND NO.1, IS DISMISSED. 6. GROUND NO. 2 AND 3 RAISED BY THE REVENUE RELATE TO ADDITION ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEE`S CONTRIBUTION TO PF OF RS. 2,30,271/-. AS PER REVENUE, THE LD CIT (A) ERRED IN RELYING ON THE PROVISIONS OF SECTION 43B (B) OF THE I.T.ACT, WHEREAS THE PRESENT ISSUE I S INVOLVED WITH SECTION 36(1) (VA) READ WITH 2 (24) (X) OF THE I.T. ACT. 6.1 LD AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT AS PER TAX AUDIT REPORT COLUMN NO.16(B) ANNEXURE-B, WHICH CLARIFIED THAT EMPLOYEES` CONTRIBUTION TO PF RS.2,30,271/- FOR JANUARY 2011 W AS PAID ON 23.02.2011, THAT IS, NEXT MONTH. THEREFORE, THE ASS ESSEE DID NOT COMMIT AND DEFAULT IN DEPOSITING THE PF CONTRIBUTION EVEN AS PER SECTION 36(1) (VA) R.W.S 2(24) (X) OF THE I.T.ACT. IN ADDITION TO THIS, THE LD AR ALSO RELIED ON THE FOLLOWING JUDGMENT: IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 8 ITAT NO.245 OF 2011, GA NO.2607 OF 2011, IN CASE OF CIT VS. M/S VIJAY SHREE LIMITED :- THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WH ETHER THE DELETION OF THE ADDITION BY THE ASSESSING OFFICER ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESI AND PF BY INVOKING THE PROVISIO N OF SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) OF THE ACT WAS CORRECT OR NOT. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., REPORTED IN 2009 VOL.319 ITR 306, H ELD THAT THE DELETION WAS JUSTIFIED. BEING DISSATISFIED, THE REVENUE HAS COME UP WITH TH E PRESENT APPEAL. AFTER HEARING MR. SINHA, LEARNED ADVOCATE, APPEARIN G ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF T HE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., WE FIND THAT THE SUPREME COURT IN THE AFORESAID CAS E HAS HELD THAT THE AMENDMENT TO THE SECOND PROVISO TO THE SEC 43(B ) OF THE INCOME TAX ACT, AS INTRODUCED BY FINANCE ACT, 2003, WAS CU RATIVE IN NATURE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EMPLOYEES' CONTRIBUTION BEYOND DUE DATE WAS DEDUCTI BLE BY INVOKING THE AFORESAID AMENDED PROVISIONS OF SECTION 43(B) O F THE ACT. WE, THEREFORE, FIND THAT NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL AND CONSEQUENTLY, WE DISMISS THIS APPEA L. 6.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 6.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF LD. AR FOR THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FO R THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. LD. A R FOR THE ASSESSEE HAS RIGHTLY POINTED OUT THAT AS PER TAX AUDIT REPOR T COLUMN NO.16(B) ANNEXURE-B, WHICH CLARIFIED THAT EMPLOYEES` CONTRIB UTION TO PF IT(SS)A NO.42/15 M/S RUNGTA SONS PVT. LTD. 9 RS.2,30,271/- FOR JANUARY 2011 WAS PAID ON 23.02.20 11, THAT IS, NEXT MONTH. THEREFORE, THE ASSESSEE DID NOT COMMIT AND D EFAULT IN DEPOSITING THE PF CONTRIBUTION EVEN AS PER SECTION 36(1) (VA) R.W.S 2(24) (X) OF THE I.T.ACT. CONSIDERING THE FACTUAL POSITION, WE DO NO T FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD CIT(A). THEREFORE, WE CONFIR M THE ORDER PASSED BY LD.CIT(A). 6.4. IN THE RESULT, APPEAL FILED BY THE REVENUE, ON GROUND NO. 2 AND 3, IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15/03/ 2017. S D/ - (A.T.VARKEY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 15/03/2017 ' $%&/PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-DCIT, CC-1(3), KOLKATA 2. / THE RESPONDENT.- M/S RUNGTA SONS PVT. LTD. 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 234 0056 , 56 , / DR, ITAT, KOLKATA 6. 478 / GUARD FILE. 2 0 //TRUE COPY//