DCIT, Nainital v. M/s. Kumaon Mandal Vikas Nigam Ltd, Nainital

ITA 3018/DEL/2009 | 2001-2002
Pronouncement Date: 20-01-2010 | Result: Dismissed

Appeal Details

RSA Number 301820114 RSA 2009
Bench Delhi
Appeal Number ITA 3018/DEL/2009
Duration Of Justice 6 month(s) 21 day(s)
Appellant DCIT, Nainital
Respondent M/s. Kumaon Mandal Vikas Nigam Ltd, Nainital
Appeal Type Income Tax Appeal
Pronouncement Date 20-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 20-01-2010
Date Of Final Hearing 20-01-2010
Next Hearing Date 20-01-2010
Assessment Year 2001-2002
Appeal Filed On 29-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI D.R.SINGH JM AND SHRI R.C.SHARMA AM ITA NO.3018/DEL/2009 ASSESSMENT YEAR : 2001-02 DY.COMMISSIONER OF INCOME TAX GOLGHAR BARA BAZAR MALLITAL NAINITAL. VS. M/S KUMAON MANDAL VIKAS NIGAM LIMITED MALLITAL NAINITAL. PAN NO.AABCK4290L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.GUPTA SR.DR. RESPONDENT BY : NONE. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 25.3.2009 FOR THE AY 2001-02 WHEREIN FOLLOWING TWO GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- 1. BECAUSE IN THE LIGHT OF AMENDMENTS MADE IN SECT ION 43B BY THE FINANCE ACT 2003 THE LEARNED AO HAS ERRED IN DISALLOWING THE EPF & FPF U/S 43B AND 36(1)(VA) IN RESPECT OF LATE DEPOSIT OF CONTRIBUTION TO PF (RS.77 02 905/-). 2. BECAUSE THE LEARNED AO ERRED IN ADDING THE UNPA ID INTEREST LIABILITY TO INCOME U/S 41(2) WHICH IS ERRONEOUS U NLAWFUL AND IS LIABLE TO BE DELETED. (RS.13 71 873/-). 2. WE HAVE GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW AND CONSIDERED THE CONTENTION OF THE LEARNED DR. THE AO HAS DISALLOWE D EPF AND FPF CONTRIBUTION ON THE PLEA THAT SAME WAS NOT PAID WITHIN THE STATU TORY TIME LIMIT PRESCRIBED UNDER RESPECTIVE PF & EPF ACT. BY THE IMPUGNED ORDER TH E CIT(A) DELETED THE DISALLOWANCE BY OBSERVING THAT BY FINANCE ACT 2003 PROVISIONS OF SECTION 43 HAVE BEEN AMENDED BY VIRTUE OF WHICH SECOND PROVISO TO SECTION 43B HAS BEEN ITA-3018/DEL/2009 2 DELETED AND THERE HAS BEEN AMENDMENT IN THE FIRST P ROVISO TO THE SAID SECTION. AFTER THIS AMENDMENT CONTRIBUTION IF PAID BEFORE T HE LAST DATE OF FILING RETURN THE SAME IS TO BE ALLOWED UNDER THE PROVISIONS OF SECTI ON 43B. BY RELYING ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF P.M.ELECTRONICS WHEREIN THE HONBLE HIGH COURT HAS DISMISSED THE APPEAL OF THE REVENUE ON THE ISSUE OF NON ALLOWABILITY OF DEDUCTION U/S 36(1)(VA) READ WITH S ECTION 2(24)(X) OF THE IT ACT READ WITH SECTION 43B. WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF CIT(A) INSOFAR AS SAME IS FURTHER FORTIFIED BY THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF ATOM EXTRUSIONS 185 TAXMAN 416. IT WAS H ELD THAT AMENDMENT TO SECTION 43B BY FINANCE ACT 2003 WAS RETROSPECTIVE F ROM 1.4.1988. RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE DELHI HIGH COURT AND HON'BLE SUPREME COURT AS REFERRED ABOVE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE WHICH ARE AS PER THE OBSERVATION OF C IT(A) WAS PAID BEFORE THE LAST DATE OF FILING RETURN. THE AO IS AT LIBERTY TO VER IFY THE ACTUAL DATE OF PAYMENT AND IF HE FINDS THAT SAME IS PAID BEFORE LAST DATE OF F ILING THE RETURN THE ASSESSEES CLAIM FOR DEDUCTION OF RS.77 02 905/- IS REQUIRED T O BE ALLOWED. WE DIRECT ACCORDINGLY. 3. THE AO HAS ADDED INTEREST PAYABLE AMOUNTING TO R S.13 71 873/- BY INVOKING THE PROVISIONS OF SECTION 41(2). ACCORDIN G TO AO SCHEDULE-19 OF THE AUDITORS REPORT INDICATED THAT INTEREST ACCRUED BU T NOT DUE INCLUDES OLD BALANCE OF LOAN FOR TEA COTTAGE OF RS.4 82 795/- AND INTEREST FOR LOAN FOR ROPEWAYS OF RS.8 89 078/- IN RESPECT WHEREOF THE PRINCIPAL AMOU NT HAD ALREADY BEEN REPAID. ON BEING ASKED TO EXPLAIN SUCH NOTING THE ASSESSEE HAS SUBMITTED THAT BOTH THE AMOUNTS HAVE NOT BEEN DEBITED IN THE CURRENT YEAR A ND THEREFORE THE FINANCIAL IMPACT OF THE SAME TOWARDS PROFITABILITY IS NIL. H OWEVER THE AO HAS MENTIONED THAT THE AUDITOR HAS CLEARLY INDICATED THAT PRINCIP AL AMOUNTS OF LOAN ON WHICH THE INTEREST HAS ACCRUED HAVE ALREADY BEEN REPAID. IN FACT THE SAID LIABILITY ON ACCOUNT OF ACCRUED INTEREST HAS ALREADY CEASED AND THEREFOR E THE AO HAS ADDED TO THE INCOME U/S 41(2) OF THE IT ACT. ITA-3018/DEL/2009 3 4. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE AD DITION AGAINST WHICH REVENUE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF LEARN ED DR AND FOUND THAT DISCLOSURE OF THE AUDITOR WITH REGARD TO INTEREST L IABILITY NOT PAID TO THE STATE GOVERNMENT DOES NOT MEAN THAT STATE GOVERNMENT HAS WAIVED OF OR THE ASSESSEE HAS WRITTEN OFF SUCH LIABILITY. MERELY BECAUSE PRI NCIPAL AMOUNT HAS BEEN PAID THERE IS NO REASON TO COME TO THE CONCLUSION THAT L IABILITY TOWARDS INTEREST DID NOT EXIST NO MORE. THUS THERE WAS NO CESSATION OF LIA BILITY WITHIN THE MEANING OF SECTION 41(2) OF THE IT ACT. WE THEREFORE DO NOT F IND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION MADE U/S 41(2) OF THE IT ACT. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED SUBJECT TO OUR OBSERVATION MADE HEREINABOVE. DECISION PRONOUNCED IN THE OPEN COURT AFTER CONCLUS ION OF THE HEARING ON 20 TH JANUARY 2010. SD/- SD/- (D.R.SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.01.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-3018/DEL/2009 4