RAMNIRANJAN KEDIA TOURISM SERVICES P. LTD NOW KNOWN AS M/S. AIDEK TOURISM SERVICES P. LTD, MUMBAI v. ITO 7(2)(1), MUMBAI

ITA 1142/MUM/2013 | 2003-2004
Pronouncement Date: 24-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 114219914 RSA 2013
Assessee PAN AAACR2573G
Bench Mumbai
Appeal Number ITA 1142/MUM/2013
Duration Of Justice 5 month(s) 15 day(s)
Appellant RAMNIRANJAN KEDIA TOURISM SERVICES P. LTD NOW KNOWN AS M/S. AIDEK TOURISM SERVICES P. LTD, MUMBAI
Respondent ITO 7(2)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 24-07-2013
Date Of Final Hearing 14-05-2013
Next Hearing Date 14-05-2013
Assessment Year 2003-2004
Appeal Filed On 08-02-2013
Judgment Text
. IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI R. K. GUPTA JM ITA NO. 4938 /MUM/20 06 ( ASSESSMENT YEAR :2003 - 04) ITO 7(2)(1) MUMBAI - 20 VS. M/S RAMNIRANJAN KEDIA TOURISM SERVICES PVT. LTD. NOW KNOWN AS M/S AIDEK TOURISM SERVICES (P) LTD. C/O SHANKARLAL JAIN & ASSOCIATES 12 ENGINEER BUILDING 265 PRINCES STREET MUMBAI - 02 PAN/GIR NO. : AAACR 2573 G ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 1142 /MUM/20 13 ( ASSESSMENT YEAR :2003 - 04) M/S RAMNIRANJAN KEDIA TOURISM SERVICES PVT. LTD. NOW KNOWN AS M/S AIDEK TOURIS M SERVICES (P) LTD. C/O SHANKARLAL JAIN & ASSOCIATES 12 ENGINEER BUILDING 265 PRINCES STREET MUMBAI - 02 VS. ITO 7(2)(1) MUMBAI - 20 PAN/GIR NO. : AAACR 2573 G ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. S.L.JAIN /REVENUE BY : MR. PRITAM SINGH DATE OF HEARING : 1 1 TH JULY 201 3 DATE OF PRONOUNCEMENT : 24 TH JULY 2013 ITA NO S . 4938/06 & 1142 /20 1 3 2 O R D E R TH ESE TWO APPEALS HAVE BEEN PREFERRED BY THE DEPARTMENT AS WELL AS BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A) MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 3 - 04 . 2 . FIRST I WILL TAKE THE APPEAL OF THE DEPARTMENT I.E. ITA NO. 4938 /M/20 06 WHEREIN THE DEPARTMENT IS O BJECTING IN ALLOWING THE PAYMENT OF RS. 11 85 253/ - IN RESPECT OF EMPLOYEES AND EMPLOYERS CONTRIBUTION TO PF AND ESIC MADE AFTER THE DUE DATE. 3 . THE AO MADE ADDITION OF RS.11 85 253/ - BY OBSERVING THAT THE CONTRIBUTION TOWARDS EMPLOYEES AND EMPLOYER HAS NOT BEEN MADE WITHIN THE TIME PRESCRIBED UNDER THE RESPECTIVE ACT. ACCORDINGLY HE MADE THE ADDITION. 4. LEARNED CIT(A) IN FIRST ROUND DELETED THE ADDITION BY OBSERVING THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE VARIOUS BENCHES AND HIGH C OURTS WHEREBY IT HAS BEEN HELD THAT IF THE CONTRIBUTION ON ACCOUNT OF PF AND ESIC IS MADE BEFORE FILING THE RETURN THEN NO DISALLOWANCE CAN BE MADE. HOWEVER ON APPEAL BEFORE THE TRIBUNAL THE ORDER OF THE CIT(A) WAS REVERSED. 5 . THEREAFTER O N MISCELLAN EOUS APPLICATION WAS FILED BY WHICH IT WAS STATED THAT THE EMPLOYEES CONTRIBUTION CANNOT BE ADDED AS THE ISSUE IS SQUARELY COVERED BY THE DECISION IN THE CASE OF ALOM EXTRUSIONS LIMITED REPORTED IN 319 ITR 306 AND BY VARIOUS OTHER DECISIONS. AFTER CONSID ERING THE CONTENTS OF THE MISCELLANEOUS APPLICATION THE TRIBUNAL RECALLED THE ORD ER WHILE DECIDING MA NO.57/M/201 3 VIDE ORDER DATED 28 - ITA NO S . 4938/06 & 1142 /20 1 3 3 6 - 2013. IN THIS WAY NOW THE APPEAL OF THE DEPARTMENT IS FIXED FOR HEARING BEFORE ME FOR DECIDING THE SAME ON MERIT. 6 . LEARNED DR HAS STRONG LY PLACED RELIANCE ON THE ORDER OF THE AO. FURTHER RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF LKP SECURITIES LTD. DECIDED IN ITA NO. 638/M/2012 VIDE ORDER DATED 17 - 5 - 2013 . 7 . ON THE OTHER HAND LEARNED COUN SEL OF THE ASSESSEE STRONGLY PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) AND ON VARIOUS CASE LAWS I.E. IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306(SC) AND VARIOUS OTHER DETAILS WERE SUBMITTED BEFORE THE TRIBUNAL DURING THE APPELLATE PROCEEDING IN MISCELLANEOUS APPLICATION. 8 . AFTER CONSIDERING THE SUBMISSION I FOUND NO INFIRMITY IN THE FINDING OF THE LEARNED CIT(A). I NOTED THAT A SUM OF RS. 7 18 237/ - BEING EMPLOYEES CONTRIBUTION FOR PF AND ESIC COVERED UNDER SECTION 43 B . THE H O N B LE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA) HELD THAT IF THE AMOUNT IS PAID BEFORE FILING THE RETURN UNDER SECTION 139(1) THEN NO DISALLOWANCE CAN BE MADE. SINCE THE LEARNED CIT(A) HAS DELETED THIS AMOUNT BY FINDING OUT THAT THE AMOUNT HAS BEEN PAID BEFORE THE DUE DATE OF FILING OF THE RETURN. THEREFORE I SEE NO UNREASONABLENESS IN THE FINDING OF THE LEARNED CIT(A). ACCORDINGLY I CONFI RM THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. 9 . REGARDING R EMAINING AMOUNT OF RS. 4 67 016/ - WHICH IS ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AND ESIC I FOUND THAT THERE IS NO UREASONABLENESS IN THE FINDING OF THE LEARNED CIT(A) IN THIS REGARD ALSO. THERE IS NO DISPUTE THAT UNDER THE RESPECTIVE ACT ALSO IF THE AMOUNT IS ITA NO S . 4938/06 & 1142 /20 1 3 4 PAID WITHIN THE GRACE PERIOD TH EN THE AMOUNT NEEDS TO BE TREATED PAID IN TIME. LEARNED CIT(A) HAS DIRECTED THE AO TO ALLOW THE DEDUCTION IN RESPECT OF EMPLOYEES CONTRIBUTION TOWARDS PF AND ESIC IF THE PAYMENT IS MADE WITHIN THE GRACE PERIOD AND THE PAYMENTS MADE AFTER GRACE PERIOD STAN DS CONFIRMED. THIS FINDING OF THE LEARNED CIT(A) IS ALSO IN CONSONANCE WITH THE FINDING OF THE TRIBUNAL IN CASE OF LKP SECURITIES LTD (SUPRA) . ACCORDINGLY I CONFIRM THE ORDER OF THE LEARNED CIT(A) IN RESPECT TO EMPLOYEES CONTRIBUTION ALSO. THUS THE APPEA L OF THE DEPARTMENT FAILS. 10 . NOW I WILL TAKE THE APPEAL OF THE ASSESSEE I.E. ITA NO. 1142/M/2013 . 1 1 . THE ASSESSEE IS OBJECTING IN REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 AND CONFIRMING THE ADDITION OF RS. 2 94 298/ - OUT OF DEPRECIATION ON MOTO R CARS AND NOT CONSIDERING THE FACTS OF DISALLOWANCE OF RS. 11 85 253/ - OUT OF PF AND ESIC ON ACCOUNT OF LATE PAYMENT WHICH IS NOT SUSTAINABLE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT. 1 2 . LEARNED COUNSEL OF THE ASSESSEE STATED THAT THE REOPENIN G OF THE ASSESSMENT AFTER FOUR YEARS AFTER COMPLETING THE ASSESSMENT UNDER SECTION 143(3) IS BAD IN LAW AS THERE WAS NO EVIDENCE THAT THE ASSESSEE HAS NOT DISCLOSED FULLY AND TRULY ALL THE MATERIAL FACTS IN THIS CASE. COPY OF REASONS RECORDED IS PLACED AT PAGE 19 AND IT WAS SUBMITTED THAT AS PER THE REASONS RECORDED THERE IS NOTHING BORNE OUT THAT THE AO FOUND ANYTHING WHICH WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY ALONG WITH THE RETURN OF INCOME. ACCORDINGLY IT WAS SUBMITTED THAT REASSESSMENT I S BAD IN LAW. RELIANCE WAS ALSO PLACED IN THE CASE OF SRI SAKTHI TEXTILES LTD. V. J CIT REPORTED IN 340 ITR 144 (MADRAS) . ITA NO S . 4938/06 & 1142 /20 1 3 5 13 . ON MERIT IT WAS SUBMITTED THAT EVEN ON MERIT NO ADDITION CAN BE MADE IN RESPECT OF DEPRECIATION ON MOTOR CARS AS THE SAME HAS BEEN SHOWN IN BLOCK OF ASSETS . REGARDING PF AND ESIC IT WAS SUBMITTED THAT THIS ISSUE IS ALSO INVOLVED IN THE APPEAL FILED BY THE DEPARTMENT. SAME ARGUMENTS WERE ADVANCED AS WERE ADVANCED WHILE HEARI NG THE APPEAL OF THE DEPARTMENT. 14 . ON THE OTHER HAND LEAR NED D R PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A). 15 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL. COPY OF THE REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE UNDER SECTION 147 OF THE ACT IS PLACED AT PAGE 19. FROM THE CONTENTS OF THE REASONS RECORDED I FOUND THAT THE REASONS HAVE BEEN RECORDED ON THE BASIS OF CONTENTS OF BALANCE SHEET FILED ALONG WITH RETURN OF INCOME . THE ASSESSMENT IN THIS CASE WAS COMPLETED UND ER SECTION 143(3) ON 28 - 1 - 2006 AND THE RETURN WAS FILED ON 25 - 11 - 2003 ORIGINALLY . THE CASE OF THE ASSESSEE DOES NOT FALL UNDER THE EXCEPTION CLAUSE PROVIDED UNDER SECTION 147(A) WHERE THE ASSESSMENT CAN BE REOPENED AFTER FOUR YEARS IF THE AO FOUND THAT T HE ASSESSEE HAS NOT DISCLOSED ALL THE PARTICULARS OF INCOME COMPLETELY AND TRULY. THE AO HAS NOTED IN HIS REASONS RECORD ED THAT AFTER GOING THROUGH THE NOTES TO ACCOUNTS IT IS FOUND THAT THE ASSESSEE HAS CLAIMED EXCESS DEPRECIATION ON TWO ITEMS I.E. RENTA L CHARGES RECEIVED THROUGH M/S BIRLA GLOBAL FINANCE LIMITED AND DEPRECIATION ON LEASED OUT VEHICLES TO THE M/S BIRLA GLOBAL FINANCE LIMITED AND THE ASSESSEE HAS NOT COMPUTED THE INCOME IN ACCORDANCE WITH THE MERCANTILE SYSTEM. ALL ITA NO S . 4938/06 & 1142 /20 1 3 6 THESE FACTS WERE BEFORE THE AO WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) ORIGINALLY . THE AO TOOK A VIEW THAT NO ADDITION IS WARRANTED ON ACCOUNT OF DEPRECIATION OR RENTAL CHARGES OR IN RESPECT TO COMPUTATION OF INCOME. NOW AFTER FOUR YEARS THE AO FOUND THAT CERTAIN IN COME HAS ESCAPED ASSESSMENT WHICH IN MY CONSIDERED VIEW IS NOT CORRECT. THIS IS NOT A CASE OF THE AO THAT THE ASSESSEE HAS NOT DISCLOSED FULLY AND TRULY ALL MATERIALS FACTS IN RESPECT OF INCOME EARNED DURING THE YEAR. AFTER EXPIRY OF FOUR YEARS WITHOUT A NY MATERIAL WHICH WAS NOT DISCLOSED FULLY AND TRULY THE ASSESSMENT IS BAD IN LAW AS HELD BY THE H O N BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LIMITED VS. ACIT REPORTED IN 268 ITR 332 . SIMILAR VIEW HAS BEEN EXPRESSED IN THE CASE OF SRI SAKTHI TEXTILES LTD. V. J CIT REPORTED IN 340 ITR 144 (MADRAS) . ACCORDINGLY I HOLD THAT THE REOPENING OF THE ASSESSMENT WAS BAD IN LAW. THEREFORE I QUASH THE ASSESSMENT. 16 . EVEN ON MERIT I FOUND THAT THE DEPRECIATION OF RS. 2 94 298/ - DISALLOWED BY THE AO WAS NOT JUSTIFIED AS THE ASSESSEE HAS SHOWN ALL THE ASSETS IN BLOCK OF ASSETS. WHILE COMPUTING THE ASSESSMENT THE BLOCK OF ASSESSMENT CANNOT BE SEGREGATED. ACCORDINGLY EVEN ON MERIT ALSO NO ADDITION WAS WARRANTED. 17 . REGARDING THE ADDITION ON ACCOUNT OF PF AND ESIC THIS G ROUND IS INFRUCTUOUS IN NATURE BECAUSE SIMILAR ISSUE WAS INVOLVED IN APPEAL OF THE DEPARTMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WHICH I HAVE ALREADY DISPOSED OF. ACCORDINGLY THIS GROUND IS NOT REQUIRED ANY ADJUDICATION UPON. ITA NO S . 4938/06 & 1142 /20 1 3 7 1 8 . IN THE RESULT APPEAL OF THE DEPARTMENT I.E. ITA NO. 4938 /M/20 06 IS DISMISSED WHEREAS THE APPEAL OF THE ASSESSEE I.E. ITA NO. 1142 /M/2013 IS ALLOWED IN PART. I.E. ITA NO.4938/M/2006 ( I.E. ITA NO. 1142/M/2013 ) ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JU LY .2013 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 24/07/ 2013 /PKM PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. G UARD FILE. //TRUE COPY// / BY ORDER ( ASSTT. REGISTRAR) / ITAT MUMBAI