M/S RAJASTHAN RAJYA SAHKARI UPHBHKTA SANGH LTD, Jaipur v. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, Jaipur

ITA 1152/JPR/2019 | 2014-2015
Pronouncement Date: 29-11-2019 | Result: Allowed

Appeal Details

RSA Number 115223114 RSA 2019
Assessee PAN AABFR3362D
Bench Jaipur
Appeal Number ITA 1152/JPR/2019
Duration Of Justice 2 month(s) 2 day(s)
Appellant M/S RAJASTHAN RAJYA SAHKARI UPHBHKTA SANGH LTD, Jaipur
Respondent ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Assessee
Tags rajasthan rajya
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 29-11-2019
Last Hearing Date 27-11-2019
First Hearing Date 27-11-2019
Assessment Year 2014-2015
Appeal Filed On 26-09-2019
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; O A 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. 1152/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2014-15. M/S. RAJASTHAN RAJYA SAHAKARI UPBHOKTA SANGH LTD. 2ND FLOOR NEHRU SAHKAR BHAWAN BHAWANI SINGH ROAD 22 GODOWN CIRCLE JAIPUR. CUKE VS. THE ACIT CIRCLE-6 JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABFR 3362 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ROHIT BADAYA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI MAN MOHAN KANDPAL (ACIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.11.2019. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/11/2019. VKNS'K@ ORDER PER VIJAY PAL RAO J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 26 TH JULY 2019 OF LD. CIT (A)-2 JAIPUR FOR THE ASSESSMENT YE AR 2014-15. THE ASSESSEE HAS RAISED THE SOLITARY GROUND AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) ERRED IN PARTLY UPHOLDING THE ORDER OF THE AO BY A DDING BACK RS. 1 10 00 000/- IN THE INCOME CONSIDERING THE EXPENS ES OF CONTRIBUTION OF GRATUITY IN LIC GROUP GRATUITY SCHEME. 2 ITA NO. 1152/JP/2019 M/S. RAJASTHAN RAJYA SAHKARI UPHBHOTA SANGH LTD. J AIPUR. 2. THE ASSESSEE IS A GOVERNMENT OWNED COOPERATIVE S OCIETY ENGAGED IN THE BUSINESS OF TRADING OF GROCERY ITEMS FURNITURE CL OTHES AND MEDICINES ETC. THROUGH COOPERATIVE STORES. THE ASSESSEE IS PROVIDING NECE SSARY CONSUMER ITEMS TO THE GENERAL PUBLIC ON REASONABLE PRICES. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS CLAIMED EXPENSES TOWARDS CONTRIBUTION OF GRATUITY IN LIC GROUP GRATUITY SCHEME OF RS. 1 10 0 0 000/-. THE AO NOTED THAT SINCE THE SAID SCHEME WAS NOT APPROVED BY THE COMPE TENT AUTHORITY THEREFORE THE HE HAS DISALLOWED THE CLAIM BY INVOKING THE PROVISI ONS OF SECTION 40A(7) OF THE IT ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND SUBMITTED THAT THE ASSESSEE HAS FILED AN APPLICATIO N IN REQUISITE FORM ON 2 ND FEBRUARY 1998 FOR APPROVAL OF THE GROUP GRATUITY S CHEME TO THE LD. CIT HOWEVER TILL DATE NO RESPONSE WAS RECEIVED BY THE ASSESSEE FROM THE DEPARTMENT. WHEN THE DEPARTMENT HAS NOT REJECTED THE APPLICATION THEREF ORE IT WAS CONTENDED THAT IT IS PRESUMED THAT THE DEPARTMENT HAS APPROVED THE SCHEM E. THE LD. CIT (A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND UPHELD T HE DISALLOWANCE MADE BY THE AO. 3. BEFORE THE TRIBUNAL THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT AFTER THE IMPUGNED ORDER OF THE LD. CIT (A) THE PRINCIPAL CI T HAS GRANTED APPROVAL VIDE ORDER DATED 4 TH SEPTEMBER 2019 WITH EFFECT FROM 01.04.2012. HE H AS FILED THE COPY OF THE APPROVAL GRANTED BY THE PR. CIT ALONG WITH AN APPLI CATION FOR ADMITTING THE ADDITIONAL EVIDENCE. THUS THE LD. A/R HAS CONTENDE D THAT ONCE THE APPROVAL WAS GRANTED BY THE PR. CIT TO THE EMPLOYEES GROUP GRATU ITY SCHEME OF LIC THEN THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE LD . CIT (A) IS LIABLE TO BE DELETED. 3 ITA NO. 1152/JP/2019 M/S. RAJASTHAN RAJYA SAHKARI UPHBHOTA SANGH LTD. J AIPUR. 4. ON THE OTHER HAND THE LD. D/R HAS SUBMITTED THA T SINCE THIS ALLEGED APPROVAL IS AFTER THE IMPUGNED ORDER OF THE LD. CIT (A) AND HAS NOT BEEN APPROVED BY THE AUTHORITIES BELOW THEREFORE THE AO BE DIRECTED TO VERIFY THE SAID APPROVAL AND THEN CONSIDER THE CLAIM OF THE ASSESSEE. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD WE NOTE THAT THE AO HAS DISALLOWED THE CLAI M OF THE ASSESSEE FOR CONTRIBUTION TO LIC GROUP GRATUITY SCHEME ON THE GR OUND THAT THE SCHEME HAS NOT BEEN APPROVED BY THE COMPETENT AUTHORITY. THE LD. CIT (A) HAS ALSO CONFIRMED THE SAID ADDITION IN PARA 2.3 AS UNDER :- 2.3. I HAVE PERUSED THE FACTS OF THE CASE THE AS SESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. ASSESSING OFFICER DISALLOWANCE CLAIM OF CONTRIBUTION TO LIC GROUP GRATUITY SCHEME OF RS . 1 10 00 000/- BY HOLDING THAT GROUP GRATUITY SCHEME IS NOT APPROVED. AUTHORIZED REPRESENTATIVE ARGUED THAT ASSESSEE PAID TO LIC FOR THIS SCHEME. ASSESSEE APPLIED FOR APPROVAL OF SCHEME WITH APPLIC ATION OF LIC DATED 02.02.1998. THIS APPLICATION WAS NOT REJECTED BY DE PARTMENT AND AUTHORIZED REPRESENTATIVE STATED THAT IT SHOULD BE TREATED AS PAYMENT TO APPROVED GRATUITY FUND AND FOR THIS HE RELIED ON VARIOUS CASES. ON PERUSAL OF OVERALL FACTS I FIND THAT THERES NO DI SPUTE ON FACT THAT GROUP GRATUITY SCHEME IS NOT APPROVED. SIMPLY BECAU SE ASSESSEE FILED APPLICATION FOR APPROVAL THIS SCHEME CANNOT BE SAI D TO BE APPROVED. PROVISIONS OF SECTION 40A(7) CLEARLY PROVIDE THAT G RATUITY PROVISIONS IS APPLICABLE ONLY FOR APPROVED GRATUITY FUND. THUS DI SALLOWANCE MADE BY ASSESSING OFFICER IS CONFIRMED. THIS GROUND OF APPE AL IS DISMISSED. THUS THE SOLE GROUND OF DENIAL OF CLAIM OF DEDUCTIO N ON ACCOUNT OF CONTRIBUTION TO LIC GROUP GRATUITY SCHEME IS NON APPROVAL OF THE SC HEME BY THE COMPETENT 4 ITA NO. 1152/JP/2019 M/S. RAJASTHAN RAJYA SAHKARI UPHBHOTA SANGH LTD. J AIPUR. AUTHORITY. NOW THE ASSESSEE HAS FILED THE APPROVAL BY THE PR. CIT VIDE ORDER DATED 4 TH SEPTEMBER 2019 WITH EFFECT FROM 01.04.2012 THERE FORE PRIMA FACIE THE CLAIM OF THE ASSESSEE IS ALLOWABLE. HOWEVER SINCE THE ALLEG ED APPROVAL WAS SUBSEQUENT TO THE IMPUGNED ORDERS PASSED BY THE AUTHORITIES BELOW THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JU STICE WE DIRECT THE AO TO CONSIDER THE APPROVAL GRANTED BY THE PR. CIT AND THEN ALLOW THE CLAIM OF THE ASSESSEE. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/11/201 9. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/11/2019. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-M/S. RAJASTHAN RAJYA SAHKARI UPHBHOKT A SANGH LTD. JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE 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. 1152/JP/2019} VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASST. REGISTRAR