M/s. Gujarat State Fertilisers & Chemicals Ltd., Baroda v. The ACIT.,Circle-1(1),, Baroda

ITA 300/AHD/2011 | 2000-2001
Pronouncement Date: 09-09-2011 | Result: Allowed

Appeal Details

RSA Number 30020514 RSA 2011
Assessee PAN AAACG7996C
Bench Ahmedabad
Appeal Number ITA 300/AHD/2011
Duration Of Justice 7 month(s) 4 day(s)
Appellant M/s. Gujarat State Fertilisers & Chemicals Ltd., Baroda
Respondent The ACIT.,Circle-1(1),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 09-09-2011
Date Of Final Hearing 30-08-2011
Next Hearing Date 30-08-2011
Assessment Year 2000-2001
Appeal Filed On 04-02-2011
Judgment Text
. .. . . .. . . .. . . .. .!'#$ !'#$ !'#$ !'#$ % % % % & & & & IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SHRI A.K.GARODIA A.M.) . ITA NO. 300/AHD./2011 : ' ()- 2000-2001 GUJARAT STATE FERTILIZERS & CHEMICALS LTD. BARO DA VS-A.C.I.T. CIRCLE-2 BARODA (PAN : AAACG 7996C) ( - ) (./ -) - 1 2 / APPELLANT BY : SHRI YOGESH G. SHAH A.R. ./ - 1 2 / RESPONDENT BY : SHRI KARTAR SINGH CIT D.R. DATE OF HEARING : 30.08.2011 DATE OF PRONOUNCEMENT : 09.09.2011 O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 03-11-2010 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I BARO DA FOR THE ASSESSMENT YEAR 2000-2001. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL IS AS UNDER: 1. THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FAC TS IN NOT ALLOWING DEDUCTION IN RESPECT OF THE WAGES PAID DURING THE Y EAR TO WORKERS OF RS.1 59 00 000/- IN SPITE OF THE DIRECTION OF THE C IT(APPEALS) IN THE ORDERS FOR A.Y. 1996-97 AND 1997-98 TO ALLOW THE DEDUCTION IN RESPECT OF AFORESAID WAGES IN THE YEAR IN WHICH THE ACTUAL PAYMENT WAS MADE. I T IS SUBMITTED THAT IT BE HELD SO NOW. 3. BRIEF FACTS RELATING TO THE CONTROVERSY INVOLVED IN THE AFORESAID GROUND OF APPEAL ARE THAT IN THE ASSESSMENT ORDER THE AO OBS ERVED THAT DURING THE ASSESSMENT YEAR 1996-97 THE ASSESSEE HAD PROVIDED FOR WAGE SET TLEMENT LIABILITY OF RS. 76 LACS WHICH WAS DISALLOWED IN THE SAID ASSESSMENT YEAR AN D THE SAID DISALLOWANCE WAS CONFIRMED BY THE HONBLE CIT (APPEALS)-I BARODA VI DE ORDER DATED 27/12/2001 PASSED IN APPEAL NO. XIV/JCIT SR.7/V3/99-00 WITH A DIRECTION THAT THE AMOUNT OF WAGE SETTLEMENT SHOULD BE ALLOWED IN THE YEAR OF ACTUAL PAYMENT WHEN THE WAGE ITA NO. 300-AHD-11 2 SETTLEMENT IS FINALISED. (PARA 4.2 PAGE NO.17 OF T HE ORDER). FURTHER DURING THE ASSESSMENT YEAR ASSESSMENT YEAR 1997-98 THE PROVISI ON FOR WAGE SETTLEMENT LIABILITY WAS MADE AT RS. 406 LACS WHICH WAS AGAIN DISALLOWED IN THE SAID ASSESSMENT YEAR AND THE SAID DISALLOWANCE WAS CONFIRMED BY THE HON'BLE CIT (APPEALS)-I BARODA VIDE ORDER DATED 08/01/2002 PASSED IN APPEAL NO. XIV/JCI T SR.7/14/99-00 WITH A DIRECTION THAT THE AMOUNT OF WAGE SETTLEMENT SHOULD BE ALLOWED IN THE YEAR OF ACTUAL PAYMENT WHEN THE WAGE SETTLEMENT IS FINALIZED (PAR A 3.4 PAGE NO. 13 OF THE ORDER). 3.1 THE AFORESAID FACTS WERE BROUGHT TO THE NOTICE OF THE AO VIDE ASSESSEES LETTER DATED 01/08/2003 FILED ON 05/08/2003. THE AO ALLOWE D THE APPEAL EFFECT TO THE ORDER DATED 17.07.2003 IN APPEAL NO.CAB/1-0018/2003-04 V IDE ORDER DATED 09.09.2003 BUT IN THE SAID ORDER THE AO HAS NOT FOLLOWED THE DIRECTION OF THE LD. CIT(A) FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98. AGGRIEVED TH E ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHEREIN HE OBJECTED TO THE ACTION OF THE AO VIDE GROUND NO.6 WHICH READS AS UNDER: (VI) THE AO HAS NOT ALLOWED DEDUCTION OF RS.1 59 00 000/- BEING WAGES PAID TO WORKERS AS THE SETTLEMENT WAS MADE DURING THE YE AR AND THAT THE CIT(A) HAS HELD IN AY 96-97 AND 97-98 THAT PROVISION BE ALLOWE D ON ACTUAL PAYMENT OF WAGES. 3.2 IN THE IMPUGNED ORDER THE LD. CIT(A) ADJUDICAT ED THIS ISSUE VIDE PARA 4.1 AT PAGE 3 WHICH READS AS UNDER: 4.1 IN REGARD TO POINT NO.(VI) ON ALLOWING THE WAG ES PAID TO THE WORKERS OF RS.15900000/- ON ACTUAL PAYMENT IF NOT ALLOWED IN AY 96-97 AND AY 97-98 THE SAID SUBSTANTIVE POINT COULD INDEPENDENTLY BE SUBJE CT MATTER OF APPEAL IN APPEAL IN THOSE YEARS. AS OF NOW THE GROUND IS REJE CTED. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US SHRI YOGESH G. SHAH APPEARED ON BEHALF OF THE ASSESSEE AND POINTED OUT THAT THE DEPARTMENT HA S ACCEPTED THE AFORESAID DIRECTION OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 1996-97 A ND 1997-98. OUT OF THE AFORESAID PROVISION FOR WAGE SETTLEMENT LIABILITY OF RS. 482 LACS (76 LACS + 406 LACS) AN AMOUNT OF RS.188 LACS WAS PAID / WRITTEN BACK IN THE ASSES SMENT YEAR 1998-99 AND WAS ALLOWED AS DEDUCTION IN THE SAID ASSESSMENT YEAR VI DE ORDER U/S 250 DATED 05/02/2002 IN ACCORDANCE WITH THE AFORESAID DIRECTION. AN AMOU NT OF RS.135 LACS WAS ITA NO. 300-AHD-11 3 PAID/WRITTEN BACK IN THE ASSESSMENT YEAR 1999-2000 AND WAS ALLOWED AS DEDUCTION IN THE SAID ASSESSMENT YEAR VIDE ORDER U/S 250 DATED 2 5/06/2003 IN ACCORDANCE WITH THE AFORESAID DIRECTION. THE REMAINING AMOUNT OF RS.159 LACS WAS PAID IN THE ASSESSMENT YEAR 2000-01 WHICH WAS NOT ALLOWED IN TH E ORDER UNDER SECTION 250 FOR THE ASSESSMENT YEAR 2000-01. HE ACCORDINGLY CONTENDED T HAT THE AO BE DIRECTED TO ALLOW THE DEDUCTION OF RS.1 59 00 000/- WHICH WAS ACTUALL Y PAID TO THE WORKERS ON THE BASIS OF WAGE SETTLEMENT MADE DURING THE YEAR. 6. ON THE OTHER HAND SHRI KARTAR SINGH APPEARING ON BEHALF OF THE REVENUE POINTED OUT THAT THIS CLAIM WAS NOT MADE IN THE RET URN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE IT CANNOT BE ALLOWED IN THE ASSESSMENT YEAR UNDER APPEAL. IN REJOINDER THE COUNSEL OF THE ASSESSEE P OINTED OUT THAT THE AO CANNOT REFUSE TO FOLLOW THE DIRECTION OF THE TRIBUNAL IN THE ASSE SSMENT YEARS 1996-97 AND 1997-98. SINCE THE DEPARTMENT HAS ACCEPTED THE ORDER OF THE LD. CIT(A) IN THE ASSESSMENT EYARS 1996-97 AND 1997-98 THE AO BE DIRECTED TO FOLLOW T HE SAME. 7. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS RELEVANT DIRECTION OF THE TRIBUNAL CONTAINED IN ORDER OF THE LD. CIT(A) IN THE ASSESSMENT YEARS 1996-97 AND 1997 -98. ADMITTEDLY THE DEPARTMENT HAS ACCEPTED THE ORDER OF THE LD. CIT(A) WHEREBY SH E DIRECTED THE AO TO ALLOW DEDUCTION IN THE YEAR OF ACTUAL PAYMENT WHEN WAGE SETTLEMENT IS FINALIZED. THIS DIRECTION IS CONTAINED IN PARA 4.2 OF THE ORDER OF LD. CIT(A)-I BARODA IN APPEAL NO.XIV/JCIT SR.7/3/99-00 DATED 27.12.2001 FOR THE A SSESSMENT YEAR 1996-97 AND IN PARA 3.4 OF THE ORDER OF LD. CIT(A)-I BARODA IN AP PEAL NO. NO.XIV/JCIT SR.7/14/99- 00 DATED 09.01.2002 FOR THE ASSESSMENT YEAR 1997-98 . AS PER THE DIRECTION OF THE LD. CIT(A) IN APPELLATE ORDERS FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 WAGES FOR WHICH PROVISION WAS MADE AND DISALLOWED IN THESE TW O ASSESSMENT YEARS IS TO BE ALLOWED IN THE YEAR OF ACTUAL PAYMENT WHEN WAGE SE TTLEMENT IS FINALIZED. WE THEREFORE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO VERIFY WHETHER IN THE ASSESSMENT YEAR UNDER APPEAL THE WA GE SETTLEMENT WAS FINALIZED. IF THE REPLY OF THIS QUESTION IS IN AFFIRMATIVE THE AO WI LL FURTHER VERIFY WHETHER THE AMOUNT IS ACTUALLY PAID. THEREAFTER THE AO WILL ALLOW THE WAGE AMOUNT ACTUALLY PAID FOR ITA NO. 300-AHD-11 4 WHICH PROVISION WAS MADE IN THE ASSESSMENT YEARS 19 96-97 AND 1997-98. THE AO IS DIRECTED ACCORDINGLY. RESULTANTLY THE APPEAL OF TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT FOR STATISTICAL PURPOSES THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. 3 1 4'( #' ) 09 / 09 /2010 ' 9 1 !: SD/- SD/- (A.K.GARODIA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09/09/2011 1 11 1 .;< .;< .;< .;< =<(;) =<(;) =<(;) =<(;)- -- - 1. - 2. ./ - 3. ; ?@ 4. ?@ - - 5.