Denis Chem Lab Limited Gandhinagar v. The Acit Mehsana Circle Mehsana

Ch Chch Ch In The Income Tax Appellate Tribunal B Bench Ahmedabad Before Shri N K Billaiya Accountant Member And Shri Mahavir Prasad Judicial Member Ita No 2668 Ahd 2015 Assessment Year 2012 13 Denis Chem Lab Ltd Block No 457 Gidc Estate Phase I Village Chhatral Tal Kalol Dist Gandhinagar Vs Acit Mehsana Circle Mehsana Pan Gir No Aaacd 4123 C Appellant Respondent Appellant By Shri Parth Patel Ar Respondent By Shri O P Pathak Joit Cit Date Of Hearing 29 11 2017 012 Date Of Pronouncement 21 12 2017 3 O R D E R Per Mahavir Prasad Judicial Member This Is An Appeal By The Assessee Against The Order Of The Learned Commissioner Of Income Tax Appeals Gandhinagar Ahmedabad Vide Appeal No Cit A Gnr 363 2014 15 Dtd 21 07 20 15 For Assessment Year A Y 2012 13 On The Following Gr Ounds Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 2 1 The Order Passed By Cit Appeals Is Bad In Law A Nd On Facts And Hence It Is Submitted That The Same Be Cancell Ed And Be Suitably Modified 2 A The Learned Commissioner Of Income Tax Ap Peals Gandhinagar Has Erred In Law And On Facts In Confi Rming The Action Of The Ao In Making Addition For A Sum Of Rs 46 960 Being Interest U S 244 A On Income Tax Refund For A Y 2009 10 B The Learned Commissioner Of Income Tax Appeals Gandhinagar Grossly Erred In Law And On Facts Of Th E Case In Confirming The Impugned Addition In Utter Disregard To The Fact That As Per The Return Of Income Filed For A Y 2009 10 Though The Appellant Has Claimed Income Tax Refund As On The Date Of Filing The Return Of Income For A Y 2012 13 The Ap Pellant Company Has Not Been Served With Any Intimation U S 143 1 Or Any Other Communication Regarding The Grant Of Inte Rest U S 244 A Of The I T Act For A Y 2009 10 And The Re Fund In Question Had Been Directly Credited By The Departme Nt To The Bank Account And Therefore The Appellant Company Ha S No Knowledge As To The Element Of Interest U S 244 A In The Amount Of Refund Credited To The Bank Account C The Learned Commissioner Of Income Tax Appeal S Gandhinagar Grossly Erred In Law And On Facts Of Th E Case In Confirming The Impugned Addition In Utter Disregard To The Fact That The Appellant Assessee Was Not Provided With C Opy Of The Intimation U S 143 1 Or The Break Up Of The Refund Credited To Its Bank Account For A Y 2009 10 And That In Spite Of T He Request Made To The Assessing Officer As Well As The Income Tax Authority At Central Processing Unit At Bangalore No Break Up Of The Income Tax Refund And Amount Of Interest The Reon Was Furnished To The Assessee By The Department D The Learned Commissioner Of Income Tax Appeals Gandhinagar Grossly Erred In Law And On Facts Of Th E Case In Confirming The Impugned Addition In Utter Disregard To The Fact That As On The Date Of Filing The Return Of Income For The Year Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 3 Under Appeal The Form 26 As Did Not Indicate The El Ement Of Interest Granted On The Income Tax Refund For A Y 2009 10 It Is Therefore Prayed That The Impugned Addition M Ay Please Be Deleted 3 A The Learned Commissioner Of Income Tax Appe Als Gandhinagar Grossly Erred In Law And On Facts Of Th E Case In Confirming The Action Of The Ao In Making Disallowa Nce Addition For A Sum Of Rs 14 56 844 On Account Of Alleged L Ate Payment Of Employees Contributions Of Provident Fund And Esic Rs 13 76 928 Provident Fund Rs 79 916 Esic By Invoking Section 36 1 Va Of The I T Act In Utter Disregar D To The Fact That Employees Contribution To Provident Fund And Esic Had Been Paid Before The Due Date For The Filing Of The Retu Rn Of Income U S 139 1 And Therefore The Entire Amount Is Eligi Ble For Deduction U S 43 B Of The I T Act B The Learned Commissioner Of Income Tax Appeals Gandhinagar Grossly Erred In Law And On Facts Of Th E Case In Confirming The Impugned Addition In Utter Disregard To The Ratio Of The Following Judgments Of The Supreme Court Hi Gh Courts And Itat Which Were Specifically Brought His Attent Ion A Cit Vs Vinay Cement Company Limited Sc 213 Ctr 268 B Cit Vs Alom Extrusions Ltd 2009 319 Itr 306 S C C Cit Vs Lakhani Rubber Works 326 Itr 415 P H 2010 D Precision Products Vs Acit Ita No 4 Ahd 2011 Ahd 2012 E Sai Consulting Engineers P Limited V Dcit Circle 8 Abd Ita No 2262 Ahd 2007 F Sabari Enterprises 298 Itr 141 Kar G George Williamson 284 Itr 619 Gau H Sunil Goel V Acit 118 Ttj Del 415 I Cit V P M Electronics Limited 15 Dtr 258 De Lhi High Court J Cit V Aimil Limited Ors 2010 35 Dtr Del 68 Delhi High Court Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 4 K Cit V Anz Information Technology 318 Itr 123 Karnataka I Additional Cit V Vestas Rrb India Limited 200 5 93 Ttj Del 144 M Cit V Kichha Sugar Company Ltd 2013 356 Itr 351 Uttarakhand Hc N Cit V Nipso Polyfabriks Ltd 2013 350 Itr 327 Hp O Cit V Udaipur Dugdh Utpadak Sahakari Sangh Ltd 2013 53 I Itcl 433 Raj Hc P Commissioner Of Income Tax Faridabad Vs Hemla Embroidery Mills P Ltd 2013 37 Taxmann Com 16 0 Punjab Haryana Q Spectrum Consultants India Pvt Ltd Vs Cit Karnataka High Court R Hindustan Organic Limited Vs Cit Bombay High C Ourt S Essae Teraoka Private Limited 2014 266 Ctr Ka R 246 It Is Therefore Prayed That The Impugned Addition M Ay Please Be Deleted 4 The Appellant Craves Leave To Add And Or Alter A Ny Ground At The Time Of Hearing Of Appeal 2 The Brief Facts Of The Case Are That In This Cas E The Appellant Is A Limited Company Incorporated Under The Companies Ac T 1956 And Is Engaged In The Business Of Manufacturing Of Bulk Dr Ugs And Pharmaceutical Products And Job Work Of I V Fluids For The Assessment Year Under Consideration The Assessee Company Had Filed Its Return Of Income On 29 09 2012 Declaring Total Income Of Rs 1 38 04 010 The Assessees Case Was Selected For Scrutiny And The L Earned Assessing Officer Issued Notice U S 143 2 In Response To Th E Notice Issued The Appellant Caused Appearance Before The Assessing Of Ficer From Time To Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 5 Time And Furnished All The Details And Information Thereafter The Assessing Officer Finalized The Assessment For The Year Under Consideration Determining Total Income At Rs 1 59 0 7 810 In The Assessment Order The Ao Has Made Following Additio Ns Disallowances 1 Addition On Account Of Interest U S 244 A 46 960 2 Disallowance For Alleged Late Payment Of Employees Contribution To Provident Fund And Esic U S 36 1 Va 14 56 844 3 Disallowance Out Of Sales Commission 6 00 000 Thereafter The Appellant Filed First Statutory App Eal Before The Ld Cit A Gandhinagar Wherein He Had Confirmed The Additions Made By The Ao On Account Of Interest U S 244 A Of Rs 46 960 And Disallowance Made U S 36 L Va Of Rs 14 56 844 The Cit A Has Del Eted The Disallowance Made By The Ao Out Of Sales Commission Of Rs 6 00 0 00 3 We Have Gone Through The Relevant Record And Imp Ugned Order So Far As Ground No 1 And 4 Are General And Does Not R Equire Any Adjudication 4 So Far As Ground No 2 With Regard To Confirming The Addition For A Sum Of Rs 46 960 Being Interest U S 244 A On Incom E Tax Refund For A Y 2009 10 Is Concerned Ao During The Course Of A Ssessment Proceeding On Verification Of The Details Generated Through Income Tax Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 6 Department Noticed That Appellant Received Rs 46 96 0 On 01 03 2012 As Interest U S 244 A Of The Act On Refund Ao Contende D That Interest Received U S 244 A Of The Act Is Taxable Under The H Ead Income From Other Sources In This Case Though The Refund Of Rs 46 960 Was Shown In The Record Of Income Tax Department And During T He Course Of Assessment Proceeding Assessee Has Submitted Affida Vit Of Managing Director Of The Company Stating That The Company Is Not Aware About The Details Of The Interest In The Absence Of Any Worki Ng Thereof Or Statement Thereof Issued By The Department The Said Refund W As Less And There Were Adjustment Relating To Earlier Year For Which The Assessee Had Separately Written To The Department In Our Opinion Assessee Has Received The Said Info Rmation From The Assessing Officer During The Course Of Assessment P Roceedings Which Took Place During Financial Year 2014 15 The Said Amount Of Interest Has Therefore Been Provided In The Financial Year 2015 16 Which Is Also Subject To Certain Rectification On Factual Grounds As The Amount Of Set Off Of Different Years Is Not Correct They Have Made S Eparate Entry In General Voucher Dated 01 04 2015 Mentioning Being The Jv P Ass For Interest Received Form Income Tax Dep For The A Y 2009 10 Interest Income Booked In F Y 2015 16 In Our Considered Opinion In Such Circumstances N O Addition Can Be Made In The Result This Ground Of Appeal Is In Favour Of The Assessee Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 7 5 So Far As Ground No 3 Is Concerned Being Late Pa Yment Of Employees Contributions Of Provident Fund And Esic By Invoking Section 36 1 Va Of The I T Act On Verification Of P L Account Noticed That Assessee Had Debited Rs 19 71 067 Towards Co Ntribution To Provident Fund And Other Funds However From The D Etails Of Pf Contribution Annexed To Audit Report Ld Ao Notice D That Appellant Had Deposited Amounts Of Rs 13 76 928 And Rs 79 916 Towards Pf And Esic Late He Added Rs 14 56 844 Invoking Provisi Ons Of Section 36 1 V A Of The Act We Have Considered The Fact S And Circumstance And Gone Through The Impugned Order In Our Opinion Jurisdictional High Court Is Very Much Clear On This Point In The Case Of Cit Vs Gujarat State Road Transport Corporation Relevant Para Of The Same Is Reproduced Here As Under Section 43 B Read With Section 36 1 Va Of The Inc Ome Tax Act 1961 Business Disallowance Certain Deductions To Be Al Lowed On Actual Payment Employee Contribution Whether Where An Employer Has Not Credited Sum Received By It As Employees Contribut Ion To Employees Account In Relevant Fund On Or Before Due Date As P Rescribed In Explanation To Section 36 1 Va Assesses Shall Not Be Entitled To Deduction Of Such Amount Though He Deposits Same Be Fore Due Date Prescribed Under Section 43 B I E Prior To Filing Of Return Under Section 139 1 Held Yes Assessee State Transport Corpo Ration Collected A Sum Being Provident Fund Contribution From Its Empl Oyees However It Had Deposited Lesser Sum In Provident Fund Account Assessing Officer Disallowed Same Under Section 43 B However Commis Sioner Appeals Deleted Disallowance On Ground That Employee Contr Ibution Was Deposited Before Filing Return Whether Since Assesses Had No Deposited Said Contribution In Respective Fund Account On Dat E As Prescribed In Explanation To Section 36 1 Va Disallowance Made By Assessing Officer Was Just And Proper Held Yes Para 8 I N Favour Of Revenue Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 8 6 In View Of The Above Judgment We Confirm The Im Pugned Order And Dismiss This Ground Of Appeal 7 In The Result Appeal Filed By The Assessee Is P Artly Allowed This Order Pronounced In Open Court On 21 12 2017 Sd Sd N K Billaiya Mahavir Prasad Accountant Member Judicial Member Ahmedabad Dated 21 12 2017 Copy Of The Order Forwarded To 1 The Appellant 2 The Respondent 3 67 8 Concerned Cit 4 8 The Cit A 5 9 67 672 Dr Itat Ahmedabad 6 Guard File By Order 9 True Copy Dy Asstt Registrar Itat Ahmedabad Ita No 2668 Ahd 2015 Denis Chem Lab Ltd Vs Acit A Y 2012 13 9 1 Date Of Dictation 15 12 2017 Dictation Pad 4 Pa Ges Attached At The End Of This Appeal File 2 Date On Which The Typed Draft Is Placed Before The Dictating Member 20 12 2017 3 Other Member 4 Date On Which The Approved Draft Comes To The Sr P S P S 5 Date On Which The Fair Order Is Placed Before The D Ictating Member For Pronouncement 6 Date On Which The Fair Order Comes Back To The Sr P S P S 7 Date On Which The File Goes To The Bench Clerk 8 Date On Which The File Goes To The Head Clerk 9 The Date On Which The File Goes To The Assistant Re Gistrar For Signature On The Order 10 Date Of Despatch Of The Order