Dcit New Delhi v. M S Usha International Ltd New Delhi

Page 1 Income Tax Appellate Tribunal Delhi Bench G New Delhi Before Shri H S Sidhu Judicial Member And Shri Prashant Maharishi Accountant Member Ita No 237 Del 2016 Assessment Year 2011 12 Dcit Circle 27 1 New Delhi Vs Usha International Ltd 19 Kasturba Gandhi Marg New Delhi Pan Aaact 0066 A Appellant Respondent Revenue By Shri Kaushlendra Tiwari Sr Dr Assessee By Shri Vp Gupta Adv Date Of Hearing 21 09 2017 Date Of Pronouncement 1 3 1 2 2017 O R D E R Per Prashant Maharishi A M 1 This Is An Appeal Filed By The Revenue Aga Inst The Order Of The Ld Cit A 9 New Delhi Dated 08 10 2015 For The Assessment Year 2011 12 2 The Revenue Has Raised The Following Grounds Of Appeal 1 On The Facts And In The Circumstances Of The Case And In Law The Order Passed By Ld Cit A Is Erroneous And The Learned Cit A Has Erred In Reducing The Addition Of Rs 3 49 94 000 To Rs 5 93 000 Made By Ao U S 14 A 2 On The Facts And In The Circumstances Of The Case And In Law The Order Passed By Ld Cit A Is Erroneous And The Learned Cit A Has Erred In Deleting The Addition Of Rs 5 60 082 Made By Ao On Account Of Club Expenses 3 On The Facts And In The Circumstances Of The Case And In Law The Order Passed By Ld Cit A Is Erroneous And The Learned Cit A Has Erred In Deleting The Disallowance On Account Of Pf Of Rs 1 56 178 And Esi Of Rs 2 95 294 Totaling Rs 4 51 472 4 On The Facts And In The C Ircumstances Of The Case And In Law The Order Passed By Ld Cit A Is Erroneous And The Learned Cit A Has Erred In Allowing Deduction Of Rs 1 5 0 000 U S 80 G Of The I T Act 3 Brief Facts Of The Case Is That The Assessee Is Engaged In Manufacturing And Trading Of Electric Fans Water Coolers And Fuel Injection Equipments Further It Is Also Marketing Other Consumer Durables It Filed Its Return Of Income On 27 09 2011 For Rs 498171 009 The Assessment U S 143 3 Was Made On 28 03 2014 For Rs 534774601 Making Addition Disallowance Of Rs 36603592 The Assessee Carried The Matter Before The Ld Cit A Who Dcit Vs Usha International Ltd Ita No 237 Del 2016 Assessment Year 2011 12 Page 2 Allowed The Appeal Of The Assessee Partly Therefore On The Relief Given By The Ld Cit A The Revenue Is Contesting The Present Appeal 4 The First Ground Of Appeal Is With Respect To Disallowance U S 14 A Of The Income Tax Act Made By The Ld Assessing Officer Of Rs 34994000 Which Was Restricted To Rs 593000 By The Ld Cit A During The Year Assessee Has Received Dividend Of Rs 5 93 Lacs Which Is Exempt The Assessee Has Stated That It Has Not Incurre D Any Expenditure However The Ld Assessing Officer Applied Rule 8 D And Made A Disallowance Of Rs 34996000 On Appeal Before The Ld Cit A He Restricted The Same To Rs 593000 5 The Ld Dr Relied Upon The Orders Of The Ld Assessing Officer Whereas The Ld Ar Relied Upon The Order Of The Ld Cit A And Decision Of The Honble Delhi High Court In Joint Investment Pvt Ltd Vs Cit 372 Itr 694 6 We Have Carefully Considered The Rival Contentions And Also Perused The Orders The Orders Of The Lower Authori Ties As The Assessee Has Earned Exempt Income Only Rs 5 93 Lacs Disallowance U S 14 A Cannot Exceed The Exempt Income As Held By Honble Delhi High Court In Joint Investment Pvt Ltd Supra Therefore Respectfully Following The Decision Of The Honble Delhi High Court We Confirm The Finding Of The Ld Cit A And Hence Ground No 1 Of The Appeal Of Revenue Is Dismissed 7 Ground No 2 Of The Appeal Is With Respect To The Addition Of Rs 560082 On Account Of Club Expenses Deleted By The Ld Cit A The As Sessee Has Claimed These Expenses As It Is Paid To Panchsheel Club For Renewal Of Corporate Membership For 10 Years The Ld Ao Disallowed The Same The Ld Cit A Allowed The Claim Of The Assessee Following The Decision Of The Honble Supreme Court In Case Of United Glass Manufacturing Co Ltd In Civil Appeal No 6447 2012 8 The Ld Dr Relied Upon The Order Of The Ld Assessing Officer Whereas The Ld Ar Relied On The Decision Cited Above As Well As Submission Before The Ld Cit A 9 We Have Carefully Consider Ed The Rival Contentions The Above Disallowance Has Been Deleted By The Ld Cit A Relying Upon The Decision Of The Honble Supreme Court Wherein It Is Held That Club Membership Fees Incurred By The Assessee Is A Business Expenditure We Find No Infirmit Y In The Order Of The Ld Cit A Hence Ground No 2 Of The Appeal Is Dismissed 10 Ground No 3 Of The Appeal Is With Respect To Disallowance Deleted By The Ld Cit A On Account Of Provident Fund Of Rs 156178 And Esi Of Rs 295294 Which Were Paid Befo Re The Due Date Of Filing Of Return Of Income But Disallowed By The Ld Assessing Officer For The Reason That It Is Employees Contribution And Deposited Late The Ld Cit A Deleted The Dcit Vs Usha International Ltd Ita No 237 Del 2016 Assessment Year 2011 12 Page 3 Disallowance Relying Upon The Decision Of Honble Delhi High Court In C Ase Of Cit Vs Aimil Ltd 321 Itr 508 11 Ld Departmental Representative Relied Upon The Order Of The Ld Assessing Officer And Reasons Given There Under 12 The Ld Ar Relied Upon The Order Of The Ld Cit A 13 We Have Carefully Considered The Rival Contentions The Issue Is Squarely Covered In Favour Of The Assessee By The Decision Of The Honble Delhi High Court In Case Of Cit Vs Aimil Ltd Supra As Well As Series Of The Decision Where The Employees Contribution Deposited Belatedly But Before The Due Date Of Filing Of Return Of Income Cannot Be Disallowed U S 43 B Of The Act Therefore Respectfully Following The Decision Of The Honble Delhi High Court We Confirm The Finding Of The Ld Cit A And Dismiss Ground No 3 Of The Appeal Of The Revenue 14 Ground No 4 Of The Appeal Is With Respect To Deduction U S 80 G Of Rs 150000 Which Has Not Been Granted By The Ld Assessing Officer Though Claimed In The Return Of Income The Ld Cit A Has Directed Ao To Verify The Claim Of The Assessee And Grant Deduction If Foun D In Accordance With The Law We Do Not Appreciate How The Revenue Is Aggrieved With The Above Direction Hence This Ground Of Appeal Is Dismissed 15 In The Result Appeal Of The Revenue Is Dismissed Order Pronounced In The Open Court On 1 3 1 2 2017 S D S D H S Sidhu Prashant Maharishi Judicial Member Accountant Member Dated 1 3 1 2 2017 A K Keot Copy Forwarded To 1 Applicant 2 Respondent 3 Cit 4 Cit A 5 Dr Itat Assistant Registrar Itat New Delhi