MULTI ORGANICS P. LTD, MUMBAI v. ACIT 10(1), MUMBAI

ITA 5484/MUM/2010 | 2006-2007
Pronouncement Date: 30-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 548419914 RSA 2010
Assessee PAN AAACM4507D
Bench Mumbai
Appeal Number ITA 5484/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 24 day(s)
Appellant MULTI ORGANICS P. LTD, MUMBAI
Respondent ACIT 10(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Assessment Year 2006-2007
Appeal Filed On 06-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D.MANMOHAN VICE PRESIDENT AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER ITA. NO. 5484/MUM/2010 ASSESSMENT YEAR 2006-2007 MULTI ORGANICS PVT. LTD. MUMBAI 400 051 PAN AAACM4507D VS. ACIT RANGE 10 (1) MUMBAI (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI AJAY R. SINGH FOR RESPONDENT : SHRI P.C.MOURYA DATE OF HEARING : 26-09-2011 DATE OF PRONOUNCEMENT : -09-2011 ORDER PER D. MANMOHAN V.P. 1. IN THIS APPEAL THE ASSESSEE-COMPANY RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A)-XXI MUMBAI ERRED IN CONFIRMING THE DISALLOWANCE OF RS.6 70 976/- MADE BY THE ASSESSING OFFICER U/S. 14A R.W. R. 8D. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A)-XXI MUMBAI ERRED IN CONFIRMING THE DISALLOWANCE OF RS.3 49 606/- U/S. 43B(F) BEING THE PROVISIONS MADE IN THE BOOKS PERTAINING TO LEAVE ENCASHMENT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A)-XXI MUMBAI ERRED IN CONFIRMING THE ADDITION MADE OF RS.59 235/- MADE BY THE ASSESSING OFFICER U/S. 2(24)(X) R.W.S. 36(1)(VA) TOWARDS EMPLOYEES CONTRIBUTION TO PF/ESIC PAID BY YOUR APPELLANT BEFORE 31/10/2006 BEING THE DUE DATE FOR FILING THE TAX RETURN FOR A.Y. 2006-2007. 2. LEARNED COUNSEL APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT ALL THE ISSUES ARE COVERED BY VARIOU S DECISIONS OF THE HIGH COURT/TRIBUNAL AND FURNISHED COPIES OF THE PRE CEDENTS. AS ITA.NO.5484/M/2010 MULTI ORGANICS PVT. LTD. 2 REGARDS GROUND NO.1 IT WAS CONTENDED THAT RULE 8D I S HELD TO BE NOT RETROSPECTIVE IN ITS OPERATION IN THE CASE OF GODR EJ & BOYCE MFG. CO. LTD. VS. DCIT AND ANOTHER (2010) 328 ITR 81 (BOM.) AND HENCE ASSESSING OFFICER SHOULD BE DIRECTED TO RECONSIDER THE AMOUNT DISALLOWABLE UNDER SECTION 14A OF THE ACT WITHOUT R ESORTING TO THE PROCEDURE PRESCRIBED UNDER RULE 8D OF THE ACT. 3. LEARNED DR ADMITTED THAT IN THE LIGHT OF DECISI ON OF THE JURISDICTIONAL HIGH COURT (SUPRA) FORMULA PROVIDED UNDER RULE 8D CANNOT BE APPLIED TO THE ASSESSMENT YEAR 2006-2007. 4. HAVING HEARD THE RIVAL SUBMISSIONS WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTE D TO RECOMPUTE THE AMOUNT DISALLOWABLE UNDER SECTION 14A OF THE ACT. 5. FACTS CONCERNING GROUND NO.2 ARE AS FOLLOWS. AS SESSING OFFICER DISALLOWED A SUM OF RS.3 49 606/- UNDER SEC TION 43B OF THE ACT BEING THE AMOUNT REMAINED UNPAID REFERRABLE TO THE LEAVE ENCASHMENT. IT IS NOT IN DISPUTE THAT IN THE COMPUT ATION OF INCOME ASSESSEE ADDED BACK A SUM OF RS.3 49 606/- UNDER SE CTION 43B OF THE ACT AND THE ASSESSING OFFICER MERELY ACCEPTED THE R ETURN FILED BY THE ASSESSEE ON THIS ISSUE AND HENCE DID NOT MAKE ANY FURTHER DISALLOWANCE. HOWEVER IT WAS CONTENDED BEFORE THE CIT(A) THAT HONBLE KOLKATA HIGH COURT IN THE CASE OF EXCIDE IN DUSTRIES LTD. VS. UNION OF INDIA 292 ITR 470 STRUCK DOWN THE PROVISIO NS OF SECTION 43B (F) OF THE ACT AND HENCE NO DISALLOWANCE COULD BE M ADE BY APPLYING THE PROVISIONS OF SECTION 43B OF THE ACT. 6. LEARNED CIT(A) OBSERVED THAT THE OPERATION OF T HE DECISION OF THE HONBLE KOLKATA HIGH COURT WAS STAYED BY THE APEX COURT AND EVEN OTHERWISE THE ISSUE STANDS COVERED BY THE DEC ISION OF THE JURISDICTIONAL HIGH COURT AS WELL AS THE TRIBUNAL A ND ACCORDINGLY REJECTED THE PLEA OF THE ASSESSEE. 7. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE US. AT THE TIME OF HEARING LEARNED COUNSEL FAIRLY ADMITTED TH AT THE OPERATION OF THE DECISION OF THE HONBLE KOLKATA HIGH COURT WAS STAYED BY THE APEX ITA.NO.5484/M/2010 MULTI ORGANICS PVT. LTD. 3 COURT IN WHICH EVENT THE PLAIN LANGUAGE OF SECTION 43B (F) OF THE ACT HAS TO BE TAKEN INTO CONSIDERATION. BOTH THE PARTIE S ADMITTED THAT AS PER SECTION 43B (F) OF THE ACT AMOUNT UNPAID IN RES PECT OF LEAVE ENCASHMENT DESERVES TO BE DISALLOWED. UNDER THE CIR CUMSTANCES WE UPHOLD THE ORDER OF THE CIT(A) AND REJECT GROUND NO .2 OF THE ASSESSEE. 8. FACTS CONCERNING GROUND NO. 3 ARE THAT THE ASSE SSEE DID NOT DEPOSIT PF/ESIC AMOUNT WITHIN THE GRACE PERIOD AND HENCE ASSESSING OFFICER ADDED BACK THE SAME BY APPLYING P ROVISIONS OF SECTION 43B READ WITH SECTION 36(1)(VA) AND 2 (24) (X) OF THE ACT. 9. ON AN APPEAL FILED BY THE ASSESSEE LEARNED CIT( A) OBSERVED THAT PAYMENTS MADE BEYOND THE DATE PRESCRI BED UNDER THE STATUTE ARE ATTRACTED BY THE PROVISIONS OF SECTION 2(24)(X) OF THE ACT AND ACCORDINGLY CONFIRMED THE ACTION OF THE ASSESSI NG OFFICER. 10. BEFORE US LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE PLACED RELIANCE UPON THE DECISION OF THE ITAT MUMBAI SPECIAL BENCH TO SUBMIT THAT ANY PAYMENT MADE BEFOR E THE CLOSURE OF THE PREVIOUS YEAR FALLS OUTSIDE THE KEN OF SECTION 2(24)(X) OF THE ACT. (SEE ITAT MUMBAI SPECIAL BENCH B IN THE CASE OF M/S. BHARATI SHIPYARD LIMITED VIDE ITA.NO.2404/MUM/2009 DATED 9- 9-2011). IN THE LIGHT OF DECISION OF THE SPECIAL BENCH OF ITAT WE ACCEPT THE PLEA OF THE ASSESSEE TO SET ASIDE THE ADDITION OF RS.59 325 /-. 11. IN THE RESULT APPEAL FILED BY THE ASSESSEE-CO MPANY IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF SEPTEMBER 2011. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 30 TH SEPTEMBER 2011 VBP/- ITA.NO.5484/M/2010 MULTI ORGANICS PVT. LTD. 4 COPY TO 1. MULTI ORGANICS PVT. LTD. 503 KESHAVA BANDRA-K URLA COMPLEX BANDRA (E) MUMBAI 400 051 PAN AAACM4507D 2. ACIT RANGE 10 (1) ROOM NO. 461 AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020. 3. CIT(A)-21 MUMBAI. 4. CIT M.C.X MUMBAI 5. DR B BENCH 6. GUARD FILE TRUE COPY BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES MUMBAI.