DCIT 9(1), MUMBAI v. BAHUBALI ELECTRONICS P. LTD, MUMBAI

ITA 4440/MUM/2009 | 2006-2007
Pronouncement Date: 30-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 444019914 RSA 2009
Assessee PAN AAACB4399J
Bench Mumbai
Appeal Number ITA 4440/MUM/2009
Duration Of Justice 1 year(s) 5 month(s) 7 day(s)
Appellant DCIT 9(1), MUMBAI
Respondent BAHUBALI ELECTRONICS P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-12-2010
Assessment Year 2006-2007
Appeal Filed On 23-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND SHRI R.S.PADVEKAR JUDICIAL MEMBER I.T.A.NO.4440/MUM/2009 - A.Y 2006-07 DY. COMMISSIONER OF INCOME TAX RANGE 9(1) MUMBAI. VS. M/S BABHUBALI ELECTRONICS P. LTD. 745/2 KRISHNA CO-0-. SOCIETY KHAR PALI ROAD KHAR (W) MUMBAI 400 052 PAN: AAACB 4399 J (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SHRAVAN KUMAR. RESPONDENT BY : MR. BIKASH KUMALR BOGI. O R D E R PER T.R.SOOD AM: IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING G ROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT[A] ERRED IN ALLOWING ADJUSTMENT OF EXCISE DUTY TO THE OPENING STOCK U/S.145A FOLLOWING THE RATIO OF THE DECISION OF THE ITAT IN THE CASE OF HAWKINS COOKER LTD. ITAT NO.505/MUM/04 FOR A.Y 1999- 2000 WHICH IS NOT IN CONFORMITY WITH THE COORDINATE BENCH DECISIONS IN THE CASE OF WEST COAST PAPER MILLS LTD. VS. ACIT 105 TTJ (MUM) 344 AND J.B.CHEMICALS & PHARMACEUTICALS LTD. VS. AD DL. CIT 10 SOT 362 (MUM) AND HAS NOT BEEN ACCEPTED BY THE DEPA RTMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT[A] ERRED IN DIRECTING TO DELETE THE ADDITION MA DE U/S.14A TO THE EXTENT OF ` `` ` .5 L79 548/- RELYING ON THE JUDGMENT OF M.P. HIGH C OURT IN THE CASE OF SHREE SYNTHETICS LTD. VS. CIT 303 ITR 4 51 WITHOUT APPRECIATING THE FACT THAT THE JUDGMENT RELIED BY T HE LD. CIT[A] IS PRIOR TO INSERTION OF RULE 8D WHICH HAS GOT RETROSP ECTIVE EFFECT AS PER THE SPECIAL BENCH DECISIONS OF THE ITAT IN THE CASE OF DAGA CAPITAL MANAGEMENT PVT. LTD. I.T.A.NO.8057/MUM/2003. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT[A] ERRED IN ALLOWING EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND U/S.36(1)(VA) AMOUNTING TO ` `` ` .99 403/- PAID AFTER THE DUE DATE WITHOUT APPRECIATING THE FACT THAT THE EXPLANATION TO SECTION 36(1)(VA) CLEARLY STIPULATES THAT THE CONTRIBUTION HAS TO BE MADE WITHIN THE DUE DATE. 2. GROUND NO.1 : AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSESSEE HAD MODVAT BALANCE OF ` `` ` .14 83 273/- WHICH WAS REFLECTED 2 UNDER THE HEAD LOANS & ADVANCES. THE AO CONSIDERE D THE SAME AS PART OF THE CLOSING STOCK AND ACCORDINGLY ADDED I T TO THE INCOME U/S.145A. 3. ON APPEAL LD. CIT[A] FOLLOWING THE ORDER OF THE TRIBUNAL SET ASIDE THE ISSUE TO THE FILE OF THE AO WITH A DIRECT ION TO RECOMPUTE THE ASSESSMENT IN THE LIGHT OF THE DECISION OF THE TRIB UNAL. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y 2004-05 IN I.T.A.NO.4406/M/07 AND THE I SSUE WAS DECIDED BY THE TRIBUNAL VIDE PARA-4 WHICH IS AS UNDER: 4. THIS ISSUE IS COVERED BY THE DECISION IN THE CA SE OF HAWKINS COOKERS LTD. I.T.A.NO.505/MUM/04 FOR ASSESSMENT YE AR 1999-00 IN WHICH IT HAS BEEN HELD THAT THE ACCOUNTING TREATMEN T TO BE ADOPTED TOWARDS INCREASE IN THE VALUATION OF CLOSING STOCK TO INCLUDE MODVAT COMPONENT DISCUSSED ELABORATELY. THEREFORE WE SET ASIDE THE ISSUE TO THE FILE OF THE AO TO DECIDE THE ISSUE IN THE LIGHT OF THE DECISION IN THE CASE OF HAWKINS COOKERS [SUPRA]. FOLLOWING THE ABOVE DECISION WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT[A] BECAUSE HE HAS ALREADY REMITTED BACK THE MATTER TO THE FILE OF THE AO FOR RECOMPUTATION OF MODVAT ADJUSTME NT IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL. ACCORDINGLY WE DISMISS THIS GROUND OF THE REVENUE. 5. GROUND NO.2 : AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSESSEE HAS SHOWN SOME INCOME FROM DIVIDEND WHICH IS EXEMPT. IT WAS NOTED BY THE AO THAT ASSESSEE HAS NOT ALLOCATED ANY EXPENSES. FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE 3 OF DAGA CAPITAL MANAGEMENT PVT. LTD. & ORS. (2008) 119 TTJ (MUM) (S.B) 289 THE AO ALLOCATED THE EXPENSES AFTER INVO KING RULE 8D. 6. ON APPEAL LD. CIT[A] WAS OF THE VIEW THAT RULE 8D IS NOT APPLICATION TO THE ASSESSEES CASE AND ACCORDINGLY HE DELETED THE ADDITION. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN RECENTLY ADJUDICATED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO.LTD. VS. DCIT [4 3 DTR 171] WHEREIN IT WAS HELD THAT RULE 8D IS NOT OF RETROSPE CTIVE NATURE. AT THE SAME TIME IT WAS ALSO HELD THAT SOME REASONABLE DI SALLOWANCE ON ACCOUNT OF EXPENSES CAN BE MADE. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND REMIT THE MATTER BACK TO THE FIL E OF THE AO WITH A DIRECTION TO RE-EXAMINE THE ISSUE IN THE LIGHT OF T HE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & B OYCE MFG. CO.LTD. VS. DCIT [SUPRA]. 8. GROUND NO.3 : AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSESSEE HAD MADE PAYMENT TOWARDS EMPLOYEES CONTRIB UTION LATE BY ONE DAY AS PER THE FOLLOWING DETAILS: MONTH EMPLOYEES CONTRIBUTION DUE DATE DATE OF PAYMENT MAY 2005 47 236 15-06-05 16-06-05 FEBRUARY 2006 52 167 15-03-06 16-03-06 TOTAL 99 403 AO ACCORDINGLY DISALLOWED THE SAME. 9. ON APPEAL LD. CIT[A] DELETED THE ADDITION ON TH E BASIS OF THE TRIBUNALS DECISION. 4 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIN D THAT AS FAR AS PAYMENT OF PROVIDENT FUND DUES WITH THE GRACE PERIO D IS CONCERNED THE SAME HAS BEEN HELD ALLOWABLE U/S.43B BY THE HON 'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SHRI GANAPATHY MILLS C O. LTD. 243 ITR 879. IN THIS CASE IT WAS HELD AS UNDER: HELD (I) THAT THE TRIBUNAL WAS RIGHT IN HOLDING T HAT PAYMENTS TOWARDS PROVIDENT FUND AND EMPLOYEES STATE INSURANCE MADE W ITHIN THE GRACE PERIOD ALLOWED UNDER THE RELEVANT STATUTE THOSE AM OUNTS WERE REQUIRED TO BE DEDUCTED IN THE COMPUTATION OF THE TAXABLE IN COME OF THE ASSESSEE. NO QUESTION OF LAW AROSE FROM ITS ORDER. FOLLOWING THE ABOVE DECISION WE DECIDE THIS ISSUE AGAINST THE REVENUE. 11. IN THE RESULT REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF DECEMBER 2010. SD/- SD/- (R.S.PADVEKAR) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 30 TH DECEMBER 2010. P/-* 5