Nagarjuna Engineering Constructions, Hyd, Hyderabad v. ACIT, Circle-14(1), Hyderabad, Hyderabad

ITA 766/HYD/2017 | 2013-2014
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 76622514 RSA 2017
Assessee PAN AADFN2846E
Bench Hyderabad
Appeal Number ITA 766/HYD/2017
Duration Of Justice 6 month(s) 27 day(s)
Appellant Nagarjuna Engineering Constructions, Hyd, Hyderabad
Respondent ACIT, Circle-14(1), Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2017
Last Hearing Date 30-11-2017
First Hearing Date 30-11-2017
Assessment Year 2013-2014
Appeal Filed On 03-05-2017
Judgment Text
ITA NO 766 OF 2017 NAGARJUNA ENGG CON HYDER ABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN ACCOUNTANT MEMBER ITA NO.766/HYD/2017 (ASSESSMENT YEAR: 2013-14) M/S. NAGARJUNA ENGINEERING CONSTRUCTIONS HYDERABAD PAN: AADFN 2846 E VS ACIT CIRCLE 14(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI M.CHANDRAMOULESWARA RAO FOR REVENUE : SHRI RAMAKRISHNA BANDI DR O R D E R PER SMT. P. MADHAVI DEVI J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2013-14 AGAIN ST THE ORDER OF THE CIT (A)-6 HYDERABAD DATED 6.2.20 17. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE LEARNED CIT (A) DATED 6.2.2017 IN CONFIRMING THE ASSESSMENT OR DER DISALLOWING THE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND ESIC WITH DELAY BUT BEFORE THE DUE DATE FOR FILING OF THE INCOME- TAX RETURNS U/S 139(1) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT THE A O NOTICED THAT THE EMPLOYEES CONTRIBUTION TO PF OF RS.43 01 134 A ND ESI OF RS.45 000 WAS PAID BEYOND THE PRESCRIBED DUE DATE B UT THE ASSESSEE HAS NOT ADDED BACK THE SAME TO THE TOTAL I NCOME IN ITS DATE OF HEARING: 30.11.2017 DATE OF PRONOUNCEMENT: 30 . 1 1 .2017 ITA NO 766 OF 2017 NAGARJUNA ENGG CON HYDER ABAD. PAGE 2 OF 5 COMPUTATION OF INCOME. THE ASSESSEES EXPLANATION A S TO WHY DISALLOWANCE SHOULD NOT BE MADE WAS CALLED FOR. ASS ESSEE RELIED UPON VARIOUS CASE LAW IN SUPPORT OF HIS CLAIM THAT IF IT IS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN U/S 139 (1) OF THE ACT IT SHOULD BE ALLOWED. THE AO WAS NOT CONVINCED WITH TH E CONTENTION OF THE ASSESSEE. HE OBSERVED THAT THERE ARE DIFFERE NT DUE DATES FOR PAYING ESIC AND PF AND THEREFORE AS PER THE AMENDE D PROVISO TO SECTION 43B R.W.S. 36(1)(VA) THE SAME IS NOT ALLOW ABLE AS EXPENSE. FURTHER HE ALSO OBSERVED THAT U/S 2(24)(X) OF THE ACT IF ANY SUM IS RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES AS C ONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR ANY FU ND SET UP UNDER THE PROVISIONS OF EMPLOYEES STATE INSURANCE ACT OR ANY OTHER FUND FOR WELFARE OF SUCH EMPLOYEE IS TREATED AS INCOME IN HIS HANDS IT IS ALLOWABLE AS AN EXPENDITURE ONLY IF IT IS PAID INTO THE GOVT. A/C ON OR BEFORE THE DUE DATE PRESCRIBED UNDE R THE RELEVANT ACT. ACCORDINGLY HE DISALLOWED THE EMPLOYEES CONT RIBUTION TO THE PF & ESIC AND BROUGHT IT TO TAX. 3. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) BY RELYING UPON THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF HITECH(INDIA) PVT . LTD AND OTHERS VS. UOI REPORTED IN (1997) 227 ITR 446 AND ALSO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT VS.VINAY CEMENT LTD (2009) 313 ITR (ST.). THE CIT (A) HOWEVE R WAS NOT CONVINCED WITH THE ARGUMENTS OF THE ASSESSEE AND HE LD THAT THE DECISIONS RELIED UPON BY THE ASSESSEE ARE NOT APPLI CABLE TO THE ASSESSEES CASE. SHE RELIED UPON THE DECISION OF TH E HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. MERCHEM LTD REPOR TED IN (2015) 378 ITR 0443 WHICH HAS DISTINGUISHED THE DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS FOR AR RIVING AT A ITA NO 766 OF 2017 NAGARJUNA ENGG CON HYDER ABAD. PAGE 3 OF 5 CONCLUSION THAT THE EMPLOYEES CONTRIBUTION IS NOT A LLOWABLE IF IT IS NOT PAID WITHIN THE PRESCRIBED DUE DATE. SHE ALSO R ELIED UPON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (2014) 57( I)ITCL 72 (GUJ. HIGH COURT). THEREFORE SHE CONFIRMED THE DIS ALLOWANCE AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT BOTH THE EMPLOYEES AND EMPLOYERS CONTRIBUTION IS T O BE REMITTED TO THE GOVT. A/C WITHIN THE PRESCRIBED DATE OR BEFO RE THE DUE DATE FOR FILING OF THE RETURN U/S 139(1) OF THE ACT. HE SUBMITTED THAT THE HON'BLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION S HAS HELD THAT BOTH THE EMPLOYERS AS WELL AS EMPLOYEES CONTR IBUTION WHICH IS PAID BEFORE THE DUE DATE OF FILING OF RETURN U/S 139 (1) IS ALLOWABLE U/S 43B OF THE ACT. HE ALSO RELIED UPON T HE JUDGMENT OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE O F HITECH(INDIA) (P) LTD (CITED SUPRA) WHEREIN THE CON STITUTIONAL VALIDITY OF SECTION 43B AND EXPLANATION TO CLAUSE ( VA) OF SUB- SECTION (1) OF SECTION 36 WERE UNDER CONSIDERATION AND THE HON'BLE HIGH COURT HAS BROUGHT OUT THAT PARA MATERIA BOTH T HE SECTIONS ARE HAVING THE SAME EFFECT AND ARE NOT UNCONSTITUTI ONAL. FURTHER HE ALSO PLACED RELIANCE UPON THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS. TANLA SOLU TIONS LTD (ITA NO.879/HYD/2015) AND THE DECISION OF THE COORDINATE BENCH AT VISAKHAPATNAM IN THE CASE OF DCIT VS. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD (ITA NO.609/VIZAG/ 2014). 5. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND TRIED TO BRING OUT THE DISTINCTION BETWEEN THE PROVISO TO SECTION 43B AND SECTION ITA NO 766 OF 2017 NAGARJUNA ENGG CON HYDER ABAD. PAGE 4 OF 5 36(1)(VA) OF THE ACT. HE ALSO RELIED UPON THE JUDGM ENT OF THE HON'BLE GUJARAT HIGH COURT REFERRED TO BY THE CIT ( A) IN HER ORDER. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT AS REGARDS THE ALLOWABILITY OF DEDUCTION U/S 43B OF THE ACT OF EMPLOYERS CONTRIBUTION TO PF AND ESIC THE HON'BLE SUPREME COURT HAS HELD THAT IF IT IS PAID O N OR BEFORE THE DUE DATE OF THE FILING OF THE RETURN U/S 139(1) OF THE ACT IT IS ALLOWABLE. AS REGARDS THE APPLICABILITY OF SUCH PRO VISO TO THE DISALLOWANCE MADE U/S 36(1)(VA) OF THE ACT WE FIND THAT DECISIONS ARE BOTH AGAINST AND IN FAVOUR OF THE ASSESSEE. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL AT VISAKHAPATNAM IN THE CASE OF DCIT VS. EASTERN POWER DISTRIBUTION COMPANY OF A .P. LTD (CITED SUPRA) HAS CONSIDERED ALL THE ABOVE DECISIONS REFER RED TO BY THE ASSESSEE AS WELL AS THE DR AND HAS HELD THAT THERE IS NO DISTINCTION BETWEEN THE EMPLOYEES AND EMPLOYERS C ONTRIBUTION OF PF AND IF THE TOTAL CONTRIBUTION IS DEPOSITED ON OR BEFORE THE DUE DATE OF FURNISHING THE RETURN U/S 139(1) OF THE ACT THEN NO DISALLOWANCE CAN BE MADE OF EMPLOYEES CONTRIBUTION TO PF. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH ON SIMILAR SET OF FACTS THIS APPEAL OF THE ASSESSEE I S ALLOWED. 7. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 30 TH NOVEMBER 2017. VINODAN/SPS ITA NO 766 OF 2017 NAGARJUNA ENGG CON HYDER ABAD. PAGE 5 OF 5 COPY TO: 1 M.CHANDRAMOULESWARA RAO CA C-3 SKYLARK APARTMEN TS BASHEERBAGH HYDERABAD 500029 2 ACIT CIRCLE 14(1) HYDERABAD 3 CIT (A) - 6 HYDERABAD 4 PR. CIT 6 HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER