DCIT, New Delhi v. M/s. Modipon Ltd, Uttar Pradesh

ITA 1263/DEL/2009 | 2004-2005
Pronouncement Date: 05-02-2010 | Result: Dismissed

Appeal Details

RSA Number 126320114 RSA 2009
Assessee PAN AAACM2069E
Bench Delhi
Appeal Number ITA 1263/DEL/2009
Duration Of Justice 10 month(s) 3 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Modipon Ltd, Uttar Pradesh
Appeal Type Income Tax Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 05-02-2010
Date Of Final Hearing 03-02-2010
Next Hearing Date 03-02-2010
Assessment Year 2004-2005
Appeal Filed On 02-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI B.P. JAIN ACCOUNTANT MEMBER I.T.A.NO.1071/DEL/2009 ASSESSMENT YEAR : 2004-05 M/S. MODIPON LTD. DY. COMMISSIONER OF INCOME-TAX MODINAGAR. VS. CIRCLE 5(1) NEW DELHI. PAN: AAACM2069E I.T.A.NO.1263/DEL/2009 ASSESSMENT YEAR : 2004-05 DY. CIT CIRCLE 5(1) M/S. MODIPON LTD. NEW DELHI. VS. MODINAGAR. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI S.K. AGGARWAL ADVOCA TE. DEPARTMENT BY : SHRI G.S. SAHOTA SR. DR. O R D E R PER B.P. JAIN ACCOUNTANT MEMBER. THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-VIII NEW DELHI DATED 21.01.2009 IN AN APPEAL AGAINST THE AS SESSMENT FRAMED UNDER SECTION 143(3) OF THE INCOME-TAX ACT (THE ACT). BO TH THE APPEALS ARE TAKEN 2 TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1263/DEL/2009 2. FIRST WE WOULD TAKE REVENUES APPEAL IN ITA NO.1 263/DEL/2009 WHERE THE FOLLOWING EFFECTIVE GROUND IS RAISED:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING ADDITIONS OF RS.1 09 59 923/- ON ACCOUNT OF BELATED PAYMENT ON A CCOUNT OF EMPLOYMENT CONTRIBUTION FOR PF & ESIC IGNORING THE PROVISIONS OF SECTION 36(1)(VA) WHEREIN IT IS PROV IDED THAT THE EMPLOYEES CONTRIBUTION ARE TO BE PAID BEFORE THE DU E DATE AS PROVIDED IN THE ACT OF RELEVANT FUNDS. THE DUE DAT E OF FILING OF INCOME TAX RETURNS HAS NO RELEVANCE IN RESPECT OF T HE SAID PAYMENTS AS WRONGLY CONSIDERED IN THIS CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER DISALLOWED A SUM OF RS.1 09 59 923/- BEING THE EMPLOYEES CONTRIBUTIO N FOR PROVIDENT FUND AND ESIC UNDER SECTION 36(1)(VA) OF THE ACT. THE L EARNED CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE SINCE THE SAID PAYMENTS H AVING BEEN MADE BEFORE THE DUE DATE OF FURNISHING THE RETURN UNDER SECTION 139(1) OF THE ACT RELYING UPON THE FOLLOWING DECISIONS VIDE PARA 3.4.3 OF HIS ORDER:- (I) CIT VS. GEORGE WILLIAMSON (ASSAM) LTD. 284 ITR 619 (GAUHATI); & (II) CIT VS. DHARMENDRA SHARMA 297 ITR 320 (DEL). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE PAYMENT OF PF & ESIC THOUGH WAS DELAYED BUT WAS PAID BEFORE THE DUE 3 DATE OF FURNISHING THE RETURN UNDER SECTION 139(1) OF THE ACT. THE ISSUE IS NOW FULLY COVERED BY THE DECISION OF HONBLE SUPREM E COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. 319 ITR 306 AND THERE FORE WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) WHO HA S RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE SINCE THE DELAYED PAYMENT OF PF AND ESIC HAVING BEEN PAID BEFORE THE DUE DATE OF FURNISHING THE RET URN OF INCOME UNDER SECTION 139(1) OF THE ACT. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ITA NO.1071/DEL/2009 6. NOW WE WOULD TAKE APPEAL OF THE ASSESSEE IN ITA NO.1071/DEL/2009. ALL THE GROUNDS RAISED BY THE ASSESSEE ARE TAKEN TO GETHER SINCE THE ISSUE INVOLVED IS IDENTICAL. THE GROUNDS RAISED ARE AS U NDER:- 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME-TA X (APPEALS)-VIII NEW DELHI DATED 25.09.2008 IS WRO NG ON FACTS AND BAD IN LAW; 2. THAT THE COMMISSIONER (APPEALS) ERRED IN UPHOLDI NG THE DISALLOWANCE OF RS.41 95 719/- BEING THE PRIOR PERI OD EXPENSES; 3. THAT THE COMMISSIONER (APPEALS) ERRED IN NOT ALLOWING/DIRECTING THE ASSESSING OFFICER TO ALLOW T HESE EXPENSES IN THE RESPECTIVE YEARS TO WHICH THEY RELATE ALTHOU GH BOOKED IN THE ASSESSMENT YEAR UNDER REFERENCE; 4. THAT THE COMMISSIONER (APPEALS) ERRED IN NOT ALLOWING/DIRECTING THE ASSESSING OFFICER TO ALLOW E XPENSES OF RS.33 58 826/- RELATING TO THE ASSESSMENT YEAR UNDE R REFERENCE BUT BOOKED IN THE BOOKS IN THE SUBSEQUENT YEAR(S); 4 5. THAT THE CONCLUSIONS AND INFERENCES OF THE ASSES SING OFFICER AND/OR COMMISSIONER (APPEALS) ARE BASED ON SUSPICIO NS SURMISES AND EXTRANEOUS AND IRRELEVANT CONSIDERATIO NS; 6. THAT THE RELIEFS PRAYED FOR MAY KINDLY BE ALLOWE D AND THE ORDER(S) OF THE ASSESSING OFFICER AND/OR COMMISSION ER (APPEALS) MAY KINDLY BE QUASHED SET ASIDE ANNULLE D OR MODIFIED; 7. THAT THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER; 7. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS CLAIMED PRIOR PERIOD EXPENSES AMOUNTING TO RS.41 95 719/-. THE E XPLANATION GIVEN BY THE ASSESSEE VIDE LETTER DATED 15.12.2006 IS THAT SOMET IMES EXPENDITURE IS NOT BOOKED DUE TO NON-RECEIPT OF DETAILS INFORMATION T HEREOF ON TIME WHICH IS BEYOND CONTROL OF THE ASSESSEE AND IS ONLY MARGINAL AS COMPARED TO ENORMOUS SIZE OF THE ASSESSEE COMPANY. SUCH EXPEN SES ARE SETTLED FOR PAYMENT IN THE ASSESSMENT YEAR UNDER REFERENCE AND THIS IS THE POLICY OF THE ASSESSEE COMPANY BOOKING SUCH EXPENDITURE. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND DISALLOWED SUCH PRI OR PERIOD EXPENSES AMOUNTING TO RS.41 95 719/- AND ADDED TO THE INCOME OF THE ASSESSEE. THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE AO. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S.K. AGGA RWAL HAS SUBMITTED A CHART AT PAGES 1 TO 4 ALONG WITH VARIOUS EVIDENCES AT PAGE 6 AND ONWARDS OF 5 THE PAPER BOOK WITH REGARD TO THE EXPLANATION THAT THE SAID PRIOR PERIOD EXPENSES HAVE BEEN SETTLED DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR. IN THE FIBERS DIVISION INTEREST PAID TO M/S. KAPILA COLOURS PVT. LTD. THE PAYMENT WAS SETTLED ON 11.6.2003 FOR WHICH RELEVANT EVIDENCE ARE AVAILABLE ON PAPER BOOK PAGES 5 TO 10 WHICH WERE AVAILABLE BE FORE BOTH THE AUTHORITIES BELOW REPAIR OF TURBOCHARGER THE BILL S WERE SETTLED ON 16.8.2003 AND THE RELEVANT EVIDENCES ARE AVAILABLE AT PB PAGE S 11 TO 14 INTEREST PAID TO M/S. PODDAR PIGMENTS LTD. BOMBAY THE ACCOUNT H AS BEEN SETTLED ON 3.11.2003 AND EVIDENCES ARE AVAILABLE AT PB PAGES 1 5 TO 18. SIMILARLY FOREIGN TOUR EXPENSES OF MANAGING DIRECTOR OF RS.7 856/- HAVE BEEN SETTLED DURING THE YEAR. AS REGARDS INTEREST PAID TO LIC O N DEBENTURE AMOUNTING TO RS.20 98 130/- AND RS.40 342/- THE RELEVANT EVIDENC ES FOR PAYMENT DURING THE YEAR ARE AVAILABLE AT PB PAGES 19 TO 26. MOREO VER THE SAID PAYMENTS ARE ALLOWABLE DEDUCTION UNDER SECTION 43B(D) OF THE ACT AND ON PAYMENT BASIS AND THE SAME CANNOT BE DISALLOWED UNDER ANY C IRCUMSTANCES. AS REGARDS EXCISE DUTY ADJUSTABLE ACCOUNT OF RS.5 LAC THE RELEVANT EVIDENCES ARE AVAILABLE AT PB PAGES 27 TO 30 AND IT WAS EXPLAINED THAT THE COMPANY AVAILED THE MODVAT CREDIT ON HIGH SPEED DIESEL CONS UMED UPTO 26.04.1998 WHICH WAS DISALLOWED BY THE EXCISE DEPAR TMENT AND THE SAME WAS PAID AND THE AMOUNT WAS PAID AGAINST THE SAID D EMAND ON 10.05.1999. 6 THE AMOUNT WAS WRONGLY DEBITED TO THE EXCISE DUTY A DJUSTABLE ACCOUNT INSTEAD OF POWER AND FUEL ACCOUNT AND IT WAS RECTIF IED DURING THE YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER ARGUED THA T THE EXPENSES SETTLED DURING THE YEAR IN CHEMICAL DIVISION AMOUNTING TO R S.10 97 676/- ALSO PERTAIN TO THE PRECEDING YEAR BUT SETTLED DURING TH E YEAR. MOREOVER THE ASSESSEE COMPANY HAD ADOPTED THE CONSISTENT SYSTEM OF ACCOUNTING FOR SUCH EXPENSES CONSISTENTLY INCURRED IN THE PRECEDING YEA RS. ATTENTION WAS INVITED TO PB PAGES 59 AND ONWARDS WHERE FOR THE ASSESSMENT YEARS 1987-88 AND ONWARDS THE DEPARTMENT HAD BEEN ALLOWING SUCH CLAIM . DURING THE ASSESSMENT YEAR 2002-03 THE DEPARTMENT DISALLOWED THE CLAIM OF THE ASSESSEE EVEN BEING CONSISTENTLY FOLLOWED BY THE AS SESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO T HE DECISION OF ITAT DELHI BENCH `C IN THE CASE OF GOETZE (INDIA) LTD. VS. DC IT (2008) 115 ITD 119 WHERE IN PARA 22 ON THE IDENTICAL ISSUE THE CLAIM O F THE ASSESSEE IN THAT CASE HAD BEEN ALLOWED BY THE TRIBUNAL. THE LEARNED COUN SEL FOR THE ASSESSEE DISTINGUISHED THE DECISIONS RELIED UPON BY THE LEAR NED CIT(A) SINCE THE EXPENSES AND ITS QUANTUM WAS NOT KNOWN IN THE PRESE NT CASE AS IN THE CASES RELIED UPON BY THE LEARNED CIT(A). THE FACTS IN TH E PRESENT CASE ARE QUITE DIFFERENT AND DISTINGUISHABLE TO THE FACTS IN THE C ASES RELIED UPON BY THE 7 LEARNED CIT(A). THE LEARNED DR SHRI G.S. SAHOTA ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE ARE CONVINCED WITH THE ARGUMENTS OF THE LEARN ED COUNSEL FOR THE ASSESSEE THAT THE EXPENSES HAVE BEEN QUANTIFIED DUR ING THE IMPUGNED YEAR FOR WHICH RELEVANT EVIDENCES HAVE BEEN PLACED ON RE CORD AND WERE AVAILABLE BEFORE BOTH THE AUTHORITIES BELOW AND THE BILLS HAV E BEEN SETTLED/QUANTIFIED DURING THE YEAR AND THEREFORE SAID EXPENSES ARE AL LOWABLE AS DEDUCTION DURING THE YEAR. MOREOVER INTEREST PAID TO LIC ON DEBENTURES AMOUNTING TO RS.20 98 130/- AND RS.40 342/- ARE OTHERWISE ALLOWA BLE UNDER SECTION 43B(D) OF THE ACT ON PAYMENT BASIS AND ALSO THE AMO UNT QUANTIFIED DURING THE YEAR. THEREFORE IN THE CIRCUMSTANCES AND FACT S OF THE CASE AND THE RELIANCE PLACED ON THE DECISION IN THE CASE OF GOET ZE (INDIA) LTD. (SUPRA) THE LEARNED CIT(A) IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE AND WE DIRECT TO ALLOW THE SAID CLAIM ACCORDINGLY. THU S THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT ITA NO.1071/DEL/2009 IS ALLOWED WHEREAS ITA NO.1263/DEL/2009 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY 2010. SD/- SD/- (A.D. JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 5 TH FEBRUARY 2010. 8 ITA NOS.1263 & 1071/DEL/2009. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.