M/s. Consultech, Baroda v. The ACIT., Circle-2,, Baroda

ITA 2162/AHD/2007 | 2000-2001
Pronouncement Date: 09-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 216220514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 2162/AHD/2007
Duration Of Justice 3 year(s) 1 month(s) 18 day(s)
Appellant M/s. Consultech, Baroda
Respondent The ACIT., Circle-2,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 09-07-2010
Date Of Final Hearing 01-07-2010
Next Hearing Date 01-07-2010
Assessment Year 2000-2001
Appeal Filed On 21-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVNESH SAINI JUDICIAL MEMBER) ITA.NO.2162/AHD/2007 ASSTT.YEAR : 2000-2001 M/S.CONSULTECH OPP: SAHIL JETALPUR ROAD B/H. AGARWAL GUEST HOUSE BARODA 390 005. VS. ACIT CIR.2 BARODA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.P. SHAH REVENUE BY : SHRI SAMIR TEKRIWAL O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT(A)-II BARODA DATED 05 .03.2007 FOR A.Y.2000- 2001 ARISING OUT OF THE ORDER OF THE ASSESSING OFFI CER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961. TH E FOLLOWING GROUNDS ARE RAISED IN THE APPEAL: 1. LD.CIT(A) HAS ERRED IN CONFIRMING THE VALIDITY OF THE REASSESSMENT U/S.148 UNDER THE PRETAX OF EXCESS DEPRECIATION ON TEMPORARY SITE STRUCTURE @ 100%. THE CLAIM OF DEPRECIATION WAS FO UND CORRECT. 2. CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF R S.2 57 463/- U/S.43B RELATING TO PF CONTRIBUTION. 2.1 ALL PAYMENTS ARE MADE BEFORE DUE DATE FOR FILING TH E RETURN 2.2 AMENDMENT IN THE ACT MADE ON 01.04.2004 WILL APPLY TO EARLIER PAYMENT ALSO AND THEREFORE PAYMENT MADE EVE N THOUGH LATE WILL BE ALLOWABLE U/S.43B AS PAID BEFOR E DUE DATE FOR FILING RETURN OF INCOME. 2. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE GROUND NO.1 IS NOT PRESSED BY THE ASSESSEE. ACCORDINGLY THE SAME IS REJECTED. WITH REGARD TO GROUND NO.2 IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THIS ISSUE IS COVERED IN ITA.NO.2162/AHD/2007 -2- FAVOUR OF THE ASSESSEE BY THE DECISION OF DELHI HIG H COURT IN THE CASE OF CIT VS. P.M.ELECTRONICS LTD. (2008) 220 CTR 635 (DELHI ) WHEREIN THE HON'BLE DELHI HIGH COURT HAS DISCUSSED IN PARA-4 AS UNDER:- 4. ON 27 TH NOV. 1998 THE ASSESSEE HAD FILED A RETURN OF INCO ME DECLARING A LOSS OF RS.8 92 888. ON 11 TH MAY 1999 THE RETURN WAS PROCESSED UNDER S. 143(1)(A) OF THE ACT. THE CASE O F THE ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORDINGLY A NOTICE DT. 27 TH SEPT. 1999 UNDER S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RE SPONSE TO THE NOTICE AND ON EXAMINATION OF THE DETAILS SUBMITTED BY THE ASSESSEE WITH RESPECT TO PROVIDENT FUND PAYMENTS MADE BOTH ON ACC OUNT OF EMPLOYERS AND EMPLOYEES SHARE REVEALED THAT PAYME NTS IN THE SUM OF RS.17 94 042 WERE LATE AS PER THE PROVISIONS OF S. 36(1)(VA) R.W S. 2(24)(X) AND S. 43B. CONSEQUENTLY THE AO DISALLOW ED THE DEDUCTION AND ADDED A SUM OF RS.17 94 042 TOWARDS EPF CONTRIB UTION. AND SUBSEQUENTLY DECIDE THIS ISSUE IN PARA-10 TO 14 OF HON'BLE DELHI HIGH COURT WHICH READ AS UNDER:- 10. IN VIEW OF THE ABOVE IT IS QUITE EVIDENT THAT THE SPECIAL LEAVE PETITION WAS DISMISSED BY A SPEAKING ORDER AND WHIL E DOING SO THE SUPREME COURT HAD NOTICED THE FACT THAT THE MATTER IN APPEAL BEFORE IT PERTAINS TO A PERIOD PRIOR TO THE AMENDMENT BROUGHT ABOUT IN S. 43B OF THE ACT. THE AFORESAID POSITION AS REGARDS THE STAT E OF THE LAW FOR A PERIOD PRIOR TO THE AMENDMENT TO S. 43B HAS BEEN NO TICED BY A DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA (SUPRA) . APPLYING THE RATIO OF THE DECISION OF THE SUPREME COURT IN VINAY CEMENT (SUPRA) A DIVISION BENCH OF THIS COURT DISMISSED THE APPEALS OF THE REVENUE. IN THE PASSING WE MAY ALSO NOTE THAT A DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. NEXUS COMPUTER (P) LTD. BY A JUDGMENT DT. 19 TH AUG. 2008 PASSED IN TAX CASE (APPEAL) NO.1192/20 08 [REPORTED AT (2008) 219 CTR (MAD.) 54 ED.] DISCUSSED THE IM PACT OF BOTH THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF GEORGE WILLIAMSON (ASSAM) LTD. (SUPRA) AND VINAY CEMENT (SUPRA) AS WELL AS A CONTRARY VIEW OF THE DIVISION BENCH OF ITS OWN COURT IN SYNERGY FINANCIAL EXCHANGE (SUPRA). THE DIVISION BENCH OF THE MADRAS HIGH CO URT HAS EXPLAINED THE EFFECT OF THE DISMISSAL OF A SPECIAL LEAVE PETITION BY A SPEAKING ORDER BY RELYING UPON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF KUNHAYAMMED & ORS.VS. STATE OF KERALA & ANR. (2000) 162 CTR (SC) 97: 119 STC 505 AT P. 526 IN PARA 40 A ND NOTED THE FOLLOWING OBSERVATIONS : IF THE ORDER REFUSING LEAVE TO APPEAL IS A SPEAKIN G ORDER I.E. GIVES REASONS FOR REFUSING THE GRANT OF LEAVE THEN THE ORDER HAS TWO IMPLICATIONS. FIRSTLY THE STATEMENT OF LAW CON TAINED IN THE ORDER IS A DECLARATION OF LAW BY THE SUPREME COURT WITHIN THE MEANING OF ART. 141 OF THE CONSTITUTION. SECONDLY OTHER THAN THE ITA.NO.2162/AHD/2007 -3- DECLARATION OF LAW WHATEVER IS STATED IN THE ORDER ARE THE FINDINGS RECORDED BY THE SUPREME COURT WHICH WOULD BIND THE PARTIES THERETO AND ALSO THE COURT. TRIBUNAL OR AUT HORITY IN ANY PROCEEDINGS SUBSEQUENT THERETO BY WAY OF JUDICIAL D ISCIPLINE THE SUPREME COURT BEING THE APEX COURT OF THE COUNTRY. BUT THIS DOES NOT AMOUNT TO SAYING THAT THE ORDER OF THE COU RT. TRIBUNAL OR AUTHORITY BELOW HAS STOOD MERGED IN THE ORDER OF THE SUPREME COURT REJECTING SPECIAL LEAVE PETITION OR T HAT THE ORDER OF THE SUPREME COURT IS THE ONLY ORDER BINDING AS RES JUDICATA IN SUBSEQUENT PROCEEDINGS BETWEEN THE PARTIES. 11. UPON NOTING THE OBSERVATIONS OF THE SUPREME COU RT IN KUNHAYAMMED & ORS. (SUPRA) THE DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF NEXUS COMPUTER (P) LTD. (SUPRA) CAME TO THE CONCLUSION THAT THE VIEW TAKEN BY THE SUPREME COURT IN VINAY CEMENT (SUPRA) WOULD BIND THE HIGH COURT AS IT WAS LAW DEC LARED BY THE SUPREME COURT UNDER ART. 141 OF THE CONSTITUTION. 12. WE ARE IN RESPECTFUL AGREEMENT WITH THE REASONI NG OF THE MADRAS HIGH COURT IN NEXUS COMPUTER (P) LTD. (SUPRA). JUDICIAL DISCIPLINE REQUIRES US TO FOLLOW THE VIEW OF THE SUPREME COURT IN VINAY CEMENT (SUPRA) AS ALSO THE VIEW OF THE DIVISION BENCH OF T HIS COURT IN I DHARMENDRA SHARMA (SUPRA). 13. IN THESE CIRCUMSTANCES WE RESPECTFULLY DISAGRE E WITH THE APPROACH ADOPTED BY A DIVISION BENCH OF THE BOMBAY HIGH COUR T IN PAMWI TISSUES LTD. (SUPRA). 14. IN THESE CIRCUMSTANCES INDICATED ABOVE WE ARE OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSI DERATION IN THE PRESENT APPEAL. THE APPEAL IS THUS DISMISSED. 3. WE FIND THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF P.M. ELECTRONICS LTD. (SUPRA) HAS DECIDED THIS ISSUE OF PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AFTER CONSIDERI NG THE DECISION OF HON'BLE APEX COURT IN THE CASE OF VINAY CEMENT (SUPRA) AND ALSO DISTINGUISHED THE CASE LAW REFERRED BY THE LD. DR OF BOMBAY HIGH COUR T IN PAMWI TISSUES LTD. (SUPRA). EVEN NOW THIS ISSUE HAS BEEN CONSIDERED B Y HONBLE APEX COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306 (SC) / (2009) 185 TAXMAN 416 (SC) WHEREIN IT IS HELD THAT CON TRIBUTION TO PROVIDENT FUND MADE BEFORE DUE DATE OF FILING OF RETURN ALLOWABLE AS DEDUCTION. THE DELETION OF THE SECOND PROVISO TO SECTION 43B AND THE AMENDMEN T TO THE FIRST PROVISO BY THE FINANCE ACT 2003 WAS TO OVERCOME IMPLEMENTATIO N PROBLEMS. ITA.NO.2162/AHD/2007 -4- CONSEQUENTLY THE AMENDMENTS THOUGH MADE APPLICABL E BY PARLIAMENT ONLY WITH EFFECT FROM 1-4-2004 WERE CURATIVE IN NATURE AND WOULD APPLY RETROSPECTIVELY W.E.F. 1-4-1988. ACCORDINGLY FOLL OWING APEX COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA) AND DELHI HIGH COU RT IN P.M. ELECTRONICS LTD. (SUPRA) WE ALLOW THE CLAIM OF THE ASSESSEE. 4. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 9 TH JULY 2010. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 09-07-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER AR ITAT AHMEDABAD