The ACIT,Vapi Circle,, Vapi v. Umedica Laboratories Pvt. Ltd.,, Vapi

ITA 3094/AHD/2007 | 2002-2003
Pronouncement Date: 12-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 309420514 RSA 2007
Assessee PAN AAACU2966Q
Bench Ahmedabad
Appeal Number ITA 3094/AHD/2007
Duration Of Justice 2 year(s) 7 month(s) 26 day(s)
Appellant The ACIT,Vapi Circle,, Vapi
Respondent Umedica Laboratories Pvt. Ltd.,, Vapi
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 12-03-2010
Date Of Final Hearing 10-03-2010
Next Hearing Date 10-03-2010
Assessment Year 2002-2003
Appeal Filed On 17-07-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) ITA NO.3094/AHD/2007 A. Y.: 2004-05 THE A. C. I. T. VAPI CIRCLE 3 RD FLOOR SHIVAM COMPLEX GUNJAN CHAR RASTA NH-8 VAPI VS UMEDICA LAB. P. LTD. PLOT NO.221 GIDC VAPI 396 195 PA NO. AAACU 2966Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI GOVIND SINGHAL DR RESPONDENT BY URVASHI SHODHAN AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) VALSAD DATED 15-03 -2007 FOR ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIALS AVAILABLE ON RECORD. 3. ON GROUND NO.1 ORDER OF THE LEARNED CIT(A) IS C HALLENGED IN HOLDING THAT EXCISE DUTY AND SALE TAX WILL NOT BE I NCLUDED IN THE TOTAL TURNOVER WHILE CALCULATING DEDUCTION U/S 80 HHC OF THE IT ACT. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT THE ISSUE IS COVERED AGAINST THE REVENUE BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF LAXMI MACHINE WORKS 290 ITR 667 (SC) IN WHICH IT WAS HELD THAT FOR THE PURPOSE OF CALCULATING DEDUCTION U/S 80HHC OF THE IT ACT EXCISE DUTY AND SALE TAX WOULD NOT FORM PART O F THE TOTAL TURNOVER. IN THIS VIEW OF THE MATTER THIS GROUND OF APPEAL OF T HE REVENUE IS DISMISSED. ITA NO.3094/AHD/2007 UMEDICA LABORATORIES PVT. LTD. 2 4. ON GROUND NO.2 THE REVENUE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN HOLDING THAT THE PAYMENT OF PF AND ESIC C ONTRIBUTION AMOUNTING TO RS.52 693/- MADE BEFORE FILING OF THE RETURN ARE ELIGIBLE FOR DEDUCTION. 5. THE AO NOTED THAT THE ASSESSEE HAS MADE LATE PAY MENT OF PF AND ESIC IN RESPECT OF THE EMPLOYEES CONTRIBUTION AFTE R THE DUE DATE PROVIDED UNDER THE ACT. THE AO MENTIONED THAT DEDUC TION U/S 36(1) (VA) OF THE IT ACT IS AVAILABLE TO THE ASSESSEE ON ACCOU NT OF EMPLOYEES CONTRIBUTION TO THE PF ONLY IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT TO THE RELEVANT FUND ON OR BEFOR E THE DUE DATE. THE AO THEREFORE NOTED THAT SINCE THE PAYMENT IS NOT MADE WITHIN THE DUE DATE THEREFORE DISALLOWANCE WAS ACCORDINGLY MADE. THE LEARNED CIT(A) HOWEVER CONSIDERING SEVERAL DECISIONS INCLUDING TH E DECISION OF THE HONBLE GUJARAT HIGH IN THE CASE OF ALEMBIC GLASS I NDUSTRIES LTD. 149 TAXMAN 15 (GUJ) ALLOWED THE CLAIM OF THE ASSESSEE F OR DEDUCTION BECAUSE PF AND ESIC CONTRIBUTIONS WERE PAID BEFORE THE DUE DATE OF FILING OF THE RETURN. 6. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT OMISSION TO PROVISO TO SECTION 43B OF THE IT ACT RE TROSPECTIVELY WOULD NOT BE APPLICABLE IN THE CASE OF EMPLOYEES CONTRIBUTIO N BECAUSE DEDUCTION U/S 36(1) (VA) OF THE IT ACT IS ALLOWABLE TO THE AS SESSEE ON ACCOUNT OF CONTRIBUTION TO PF IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT TO THE RELEVANT FUND ON OR BEFOR E THE DUE DATE. THE LEARNED DR RELIED UPON THE DECISION REPORTED IN 212 CTR 384 AND ALSO SUBMITTED THAT ONCE THERE IS A VIEW EXPRESSED BY OT HER HIGH COURT IN FAVOUR OF THE REVENUE THEREFORE REASONS SHOULD B E RECORDED AS TO WHY DECISION OF OTHER HIGH COURT IS FOLLOWED. HE HAS RE LIED UPON THE DECISION REPORTED IN 30 DTR 130. ITA NO.3094/AHD/2007 UMEDICA LABORATORIES PVT. LTD. 3 7. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT THE ISSUE IS FINALLY SETTLED IN FAVOUR OF THE ASSES SEE BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS P. M. ELECTRONICS 313 ITR 161 (DEL) IN WHICH EVEN ON THE CONTRIBUTION OF EMPLOYEES PROVIDENT FUND IT WAS HELD THAT IF THE SAME IS PAID ON OR BE FORE THE DUE DATE OF FILING OF THE RETURN THE SAME IS ALLOWABLE DEDUCTI ON. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME VIEW IS TA KEN BY ITAT AHMEDABAD BENCH IN THE CASE OF GUJARAT CONTAINERS L TD. VS ACIT IN ITA NO.2609/AHD/2008 DATED 02-03-2009. THE LEARNED COUN SEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE ISSUE IS NOW COVER ED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRU SIONS LTD. 319 ITR 306 (SC) IN WHICH IT WAS HELD THAT AMENDMENT TO SE CTION 43B OF THE IT ACT IS RETROSPECTIVE IN NATURE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. ITAT AHMEDABAD BENCH HAS BEEN CONSISTENTLY FOLLOWIN G THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS P.M. ELECTRONICS (SUPRA) IN FAVOUR OF THE ASSESSEE. IN THE CASE OF S HRI OMARSINGH B. RAWAT VS ITP ITA NO.1908/AHD/2009 THE TRIBUNAL ALLOWED T HE APPEAL OF THE ASSESSEE VIDE ORDER DATED 18-09-2009 ON THE ISSUE O F EMPLOYEES CONTRIBUTION BY FOLLOWING THE SAME DECISION. SIMILA R VIEW IS TAKEN BY ITAT AHMEDABAD BENCH IN THE CASE OF GUJARAT CONTAIN ERS LTD. (SUPRA). THE ISSUE IS THEREFORE SQUARELY COVERED BY THE AB OVE DECISIONS IN FAVOUR OF THE ASSESSEE AS WELL AS THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF P. M. ELECTRONICS LTD. (SUPRA) AS WELL AS DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION S LTD. (SUPRA) AND VINAY CEMENT 213 CTR 268 (SC). THE VIEW EXPRESSED I N THE CASE OF P. M. ELECTRONICS LTD. (SUPRA) IS FURTHER CONFIRMED IN TH E CASE OF CIT VS AIMIL LTD. DATED 23-12-2009 IN WHICH IT WAS HELD THAT THE TRIBUNAL WAS CORRECT IN DELETING THE ADDITION MADE BY THE ASSESSING OFFI CER ON THE GROUND THAT ITA NO.3094/AHD/2007 UMEDICA LABORATORIES PVT. LTD. 4 THE ASSESSEE HAD DEPOSIT4ED EMPLOYERS AS WELL AS E MPLOYEES CONTRIBUTION TOWARDS PF/ESI AFTER THE DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT/RULES BU9T BEFORE THE DATE OF FILING RETURN. THE CONTENTIONS OF THE LEARNED DR HAVE ALREADY BEEN CONSIDERED IN T HE ABOVE DECISIONS. THEREFORE THERE IS NO MERIT IN THE CONTENTIONS OF THE LEARNED DR. WE ACCORDINGLY REJECT THE SUBMISSIONS OF THE LEARNED DR AND DISMISS THE APPEAL OF THE REVENUE ON THIS ISSUE BECAUSE ADMITTE DLY AMOUNT IS PAID ON OR BEFORE THE DUE DATE OF FILING OF THE RETURN U /S 139(1) OF THE IT ACT. AS A RESULT THIS GROUND OF APPEAL OF THE REVENUE I S DISMISSED. 9. ON GROUND NO.3 THE REVENUE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN DIRECTING NOT TO EXCLUDE PROFIT EARNED ON SALE OF DEPB AMOUNTING TO RS.1 32 60 127/- BECAUSE THE ASSESSEE DID NOT COMPLY WITH THE CONDITIONS OF SECTION 80 HHC OF THE IT ACT . IT IS ALSO STATED THAT IN THE GROUNDS OF APPEAL THAT THE LEARNED CIT(A) HA S ALLOWED RELIEF WITHOUT GETTING THE FACTS VERIFIED FROM THE AO IN V IOLATION OF RULE 46A (3) OF THE IT RULES. THE LEARNED CIT(A) BY VERIFYING TH E FACTS AND MATERIAL ON RECORD AGREED THAT THE SUBMISSION OF THE ASSESSEE C OMPANY THAT RECEIPT OF DEPB BENEFITS CAN BE CONSIDERED AS PROFIT OF THE BUSINESS WITHIN THE MEANING OF SECTION 80 HHC OF THE IT ACT AND SET ASI DE THE DISALLOWANCE MADE BY THE AO. THE LEARNED COUNSEL FOR THE ASSESSE E AT THE OUTSET CONCEDED THAT THE MATTER REQUIRES RECONSIDERATION A T THE LEVEL OF LEARNED CIT(A) IN VIEW OF THE RECENT DECISION OF THE ITAT M UMBAI SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS 318(AT) 86(MUM.). ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT SINCE THE LEARNED CIT(A) HAS NOT GIVEN OPPORTUNITY OF BEING HEARD TO THE AO AND ADDITIONAL EVIDENCES HAVE BEEN CONSIDERED THEREFORE THE MATTER REQUIRES RECONSID ERATION AT THE LEVEL OF LEARNED CIT(A). 10. ON CONSIDERATION OF THE SUBMISSIONS OF BOTH THE PARTIES WE ARE OF THE VIEW THAT BOTH THE PARTIES SUBMITTED THAT THE M ATTER REQUIRES ITA NO.3094/AHD/2007 UMEDICA LABORATORIES PVT. LTD. 5 RECONSIDERATION AT THE LEVEL OF LEARNED CIT(A). IF RULE 46A OF THE IT RULE IS VIOLATED BY THE LEARNED CIT(A) BY NOT GIVING OPPORT UNITY OF BEING HEARD TO THE AO THE MATTER WOULD GO BACK TO THE LEARNED CIT (A) FOR DECIDING THE ISSUE AFRESH. THE ASSESSEE ALSO CONTENDED THE MATTE R REQUIRES RECONSIDERATION IN VIEW OF THE DECISION OF THE SPEC IAL BENCH OF ITAT MUMBAI IN THE CASE OF TOPMAN EXPORTS (SUPRA).I THIS VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RE STORE THE ISSUE TO HIS FILE WITH DIRECTION TO RE-DECIDE THE SAME IN THE LI GHT OF THE ABOVE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL BY GIVING REAS ONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO. AS A RESULT THIS GROUND OF APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 11. AS A RESULT DEPARTMENTAL APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12-03-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 12-03-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD