Gujarat State Export Corporation Ltd.,, Ahmedabad v. The ACIT., Circle-4,, Ahmedabad

ITA 853/AHD/2005 | 2001-2002
Pronouncement Date: 12-01-2010 | Result: Allowed

Appeal Details

RSA Number 85320514 RSA 2005
Bench Ahmedabad
Appeal Number ITA 853/AHD/2005
Duration Of Justice 4 year(s) 9 month(s) 24 day(s)
Appellant Gujarat State Export Corporation Ltd.,, Ahmedabad
Respondent The ACIT., Circle-4,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 12-01-2010
Date Of Final Hearing 12-01-2010
Next Hearing Date 12-01-2010
Assessment Year 2001-2002
Appeal Filed On 18-03-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI A.N.PHAUJA ACCOUNTANT MEMBER ITA NO.853 & 1053/AHD/2005 ASSESSMENT YEAR:2001-02 DATE OF HEARING:12.1.10 DRAFTED:13.1.10 GUJARAT STATE EXPORT CORPORATION LTD. GUJARAT CHAMBERS BUILDING ASHRAM ROAD AHMEDABAD PAN NO.AAACG7985R ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-4 AHMEDABAD V/S. V/S. ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-4 AHMEDABAD GUJARAT STATE EXPORT CORPORATION LTD. GUJARAT CHAMBER BUILDING ASHRAM ROAD AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI M.C. PANDIT SR. DR REVENUE BY:- SHRI SAURABH N SOPARKAR AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE CROSS APPEALS ONE BY THE ASSESSEE AND ANOT HER BY THE REVENUE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME- TAX(APPEALS) -VIII AHMEDABAD IN APPEAL NO. CIT(A)-VIII/AC-4/339/03-04 DATED 31-0 1-2005. THE ASSESSMENT WAS FRAMED BY THE ACIT CIRCLE-4 AHMEDABAD U/S.143(3) (III) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 28-02-2005 FOR THE ASSESSMENT YEAR 2001-02. ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 2 2. THE FIRST COMMON ISSUE IN THESE CROSS APPEALS IS AS REGARDS TO THE ORDER OF CIT(A) IN RESTRICTING THE ADDITION ON ACCOUNT OF DI SALLOWANCE OF CLAIM OF BAD DEBTS AT RS.6 59 256/- OUT OF TOTAL DISALLOWANCE MADE AT RS. 51 02 119/-. FOR THIS THE REVENUE HAS RAISED THE FOLLOWING GROUND NO.1 & 2 :- ITA NO.1053/AHD/2005 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN UPHOLDING THAT THE BOARDS RESOLUTION APPROVING THE WRITE OFF OF SUNDRY DEBIT BALANCES WAS PASSED MUCH AFTER THE END OF THE RELEVANT ASSES SMENT YEAR WOULD NOT HAVE ANY EFFECT ON ALLOWABILITY OF THE CLAIM DURING THE RELEVANT A.Y. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN RESTRICTING THE DISALLOWANCE OF BAD DEBTS AT RS.51 02 119/- TO RS.6 59 256/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT FUL FILLED THE CONDITIONS LAID DOWN UNDER THE ACT. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND NO.2 TO 4 :- ITA NO.853/AHD/2005 2 THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF BAD DEBTS AMOUNTING TO RS.6 59 256/-. 3. ALTERNATIVE AND WITHOUT PREJUDICE LD. CIT(A) HA S ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE LOSS OF RS.6 59 256/- AS TRADING / BUSINESS LOSS U/S.28 OF THE ACT. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE TOTAL RELIEF ONLY TO RS.44 42 863/- WITHOUT APPRECIATING THAT HE HIMSELF DELETED DISALLOWANCE OF CLAIM OF BAD DEBTS AMOUNTING TO RS. 51 41 466/-. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) OUG HT TO HAVE DIRECTED THE AO TO ALLOW THE CLAIM OF BAD DEBT AMOU9NTING TO RS.51 41 466/-. 3. THE BRIEF FACTS LEADING TO THE ABOVE COMMON ISSU E ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSESSEE HAS WRITTEN OFF THE BAD DEBTS DURING THE YEAR IN RESPEC T OF THE FOLLOWING PARTIES:- (1) M/S. BAHUMA POLY-TEX LTD. RS.10 5 539/- (2) M/S. ARUN & COMPANY BOMBAY RS.9 60 705/- (3) M/S. ARVIND DYE CHEM INDUSTRIES & ASSOCIATES RS.31 28 222/- (4) M/S GUJARAT GLASS INDUSTRIES RS.6 50 049/- (5) M/S. CEE DEE CORPORATION & ASSOCIATED PARTIES RS.9 207/- ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 3 THE ASSESSING OFFICER NOTED THAT THE CLAIM OF BAD D EBTS HAVE BEEN MADE IN THE ACCOUNTS AFTER WRITING OFF AS ON 31-03-2001 FOR WH ICH THE BOARDS APPROVAL WAS OBTAINED ON 31-10-2001 AND THEREFORE ACCORDING TO T HE ASSESSING OFFICER THE CLAIM IS NOT ADMISSIBLE AS NOT ARISING DURING THE YEAR. IT WAS ALSO NOTED THAT IN ALL THE CASES THE ASSESSEE-COMPANY IS NOT ENGAGED IN THE BUSINESS OF BANKING AND MONEY LENDING AND THEREFORE THE DEBIT BALANCES WRITTEN OF F AS DEDUCTION AS BAD DEBT OR BUSINESS EXPENDITURE CANNOT BE ALLOWED. ACCORDINGLY ASSESSING OFFICER HELD THAT THE PROVISION OF SECTION 36(1)(VA) R.W.S.2(24)(X) A S WELL AS ALTERNATE SUBMISSION THAT BUSINESS EXPENDITURE U/S.37 OF THE ACT CAN NOT BE ALLOWED. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). 4. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE IN THE CASES OF M/S. BAHUMA POLY-TEX LTD. AND M/S. ARUN & COMPANY BOMBAY AND M /S. ARVIND DYE CHEM INDUSTRIES AND ASSOCIATES AND CONFIRMED THE DISALL OWANCE IN THE CASE OF M/S. GUJARAT GLASS INDUSTRIES AND M/S/ CEE DEE CORPORATI ON & ASSOCIATED PARTIES. AGGRIEVED BOTH THE REVENUE AS WELL AS ASSESSEE CAM E IN APPEAL BEFORE US. 5. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE TAKE N US TO THE ORDER OF CIT(A) AND STATED THAT AS PER BOARDS RESOLUTION NO.1169 O F 2001 DATED 29-10-2001 THE ACCOUNTS WERE APPROVED BUT THE BALANCE-SHEET AND T HE PROFIT AND LOSS A/C. WERE FINALIZED AFTER THE CLOSE OF THE YEAR. ACCORDING T O THE LD. COUNSEL FOR THE ASSESSEE THE ACCOUNTS WERE CLOSED ON 31-03-2001 AND REGARDIN G THE CLAIM OF BAD DEBT IS ALWAYS APPROVED AFTER THE CLOSING OF THE YEAR. AS REGARDS TO THE DELETION HE SUPPORTED THE ORDER OF THE CIT(A) AND AS REGARDS TO CONFIRMATION ON ACCOUNT OF M/S. GUJARAT GLASS INDUSTRIES AND HE STATED THAT CIT(A) HAS CATEGORICALLY RECORDED THE FINDING THAT THERE HAS BEEN DECREE IN FAVOUR OF THE ASSESSEE-COMPANY FROM THE CITY CIVIL COURT DATED 18-10-2002 AND WHICH ALSO BEEN FO LLOWED-UP BY THE ASSESSEE BUT WITHOUT MUCH LUCK AND ACCORDING TO THE ASSESSEE IN THIS CASE NO RECOVERY IS POSSIBLE EVEN AFTER OBTAINING DECREE AND EVEN AFTER RECORDING THIS FINDING THE CIT(A) HAS NOT ALLOWED THE CLAIM OF THE ASSESSEE. SIMILAR DEPOSITION WAS MADE IN THE CASE OF M/S. CEE DEE COPORATION & ASSOCIATES PARTIES AND STATED THAT NO DOUBT BOARDS RESOLUTION IS DATED 29-10-2001 BUT DEFINITELY IT IS BEFORE THE FILING OF RETURN AND AFTER THE CLOSE OF THE YEAR. HE ARGUED THAT THERE IS NO I NFIRMITY IN THE RESOLUTION AND ACCORDINGLY HE URGED THE BENCH TO ALLOW THE ASSESSE ES CLAIM. HE FURTHER STATED THAT ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 4 THERE IS NO ISSUE IN ALL THESE CASES THAT THIS DEBT HAS NOT BECOME BAD. THE REVENUE COULD NOT ADDUCE ANY EVIDENCE IN ANY OF THE FIVE AB OVEMENTIONED PARTIES. ON THE OTHER HAND AS FAR AS CONFIRMATION IS CONCERNED LD. SR.DR RELIED ON THE ORDER OF CIT(A) AND FOR THE BALANCE HE RELIED ON THE ORDER O F ASSESSMENT ORDER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES. WE HAVE ALSO GONE THROUGH THE ASSESS EES PAPER BOOK CONTAINING PAGES 1 TO 74. IN ALL THE ISSUES WE FIND THAT THE FACTS WILL CLEARLY DEMONSTRATE STATUS OF LEGAL MATTERS THAT PENDING BEFORE THE CITY CIVIL COURT FOR RECOVERY OF AMOUNT CLAIMED AS TRADING LOSS AND WRITTEN OFF IN THE ACCO UNTS OF THE ASSESSEE-COMPANY. THE RELEVANT DETAILS ARE ANNEXURE AT PAGE-1 TO 69 OF THE ASSESSEES PAPER BOOK. AFTER GOING THROUGH THESE DOCUMENTS WE FIND THAT CI T(A) HAS CATEGORICALLY RECORDED THE FINDING IN THE CASE OF M/S. BAHUMA POLY-TAX LTD . STATING THAT TO SUPPORT ITS ARGUMENTS LD. COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THE FOLLOWING INCOME CREDITED IN VARIOUS ASSESSMENT YEARS IN THE PAST. SR.NO. YEAR SERVICE CHARGES RECEIVED (RS) 1. 1987-88 4263285 2. 1988-89 4147057 3. 1989-90 5289660 4. 1990-91 6500833 5. 1991-92 6573244 6. 1992-93 5146767 7. 1993-94 6411342 8. 1994-95 9810452 9. 1995-96 13298844 10. 1996-97 1751809 11. 1997-98 19068053 12. 1998-99 30781703 13. 1999-00 1769035 IN PARTICULAR VARIOUS DEBIT NOTES AND DOCUMENTS OF WHICH IS ALSO SUBJECT-MATTER DISPUTE AND DISCUSSED IN SUBSEQUENT PARAGRAPHS THE ASSESSEE HAVE BEEN PRODUCED ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 5 TO PROVE THAT 3% SERVICE CHARGES ARE RECEIVED FROM THE CLIENTS IN THIS RESPECT AND SUBMISSIONS MADE BY THE ASSESSEE-COMPANY THAT LETTE R OF CREDIT IS BEING OBTAINED ON BEHALF OF THE CUSTOMERS AND SERVICE CHARGES REAL IZED IS THEREFORE FOUND TO BE VALID. THE ONLY ISSUE TO BE SEEN IS WHETHER THE TRA DING LOSS IS ACCRUED TO THE ASSESSEE AND WHETHER IT CAN BE CONSIDERED FOR ALLOW ANCE U/S.37 R.W.S. 28 OF THE ACT DURING FINANCIAL YEAR 2000-01. IN THIS RESPECT IT IS SUBMITTED THAT M/S. BAHUMA POLY- TEX LTD. IS A SICK COMPANY REGISTERED WITH THE BIFR AS PER REGISTRATION NO.98/1998. IT IS ALSO SUBMITTED THAT THERE WAS NO CHANCE OF RECOV ERY OF AMOUNTS DUE ON WHOSE BEHALF PURCHASES HAD BEEN MADE IN THE PAST. THE BA LANCE-SHEET AS ON 30-06-1998 IS ALSO SUBMITTED WHEREBY LOSS HAS BEEN INCURRED BY THE COMPANY AT RS.5 61 41 750/- IT IS THEREFORE PLEADED THAT HAVIN G REGARD TO THE ABOVE FACTS THE AMOUNTS HAVE BEEN WRITTEN OFF DURING THE YEAR AS TR ADING LOSS. AFTER CONSIDERING THE SUBMISSIONS MADE IN THIS RESPECT WITH REFERENCE TO THE DOCUMENTARY EVIDENCES FURNISHED THE CIT(A) FOUND THAT THE AMOUNTS DUE AR E VERY OLD AND NO RECOVERY HAS BEEN MADE IN THE PAST SEVERAL YEARS AND THE ACTION OF THE ASSESSEE-COMPANY IN TREATING THE SAME AS A TRADING LOSS DURING THE YEAR WHICH HAS BEEN APPROVED BY THE BOARD AS PER PROCEDURE FOLLOWING IN THIS RESPECT I S THEREFORE VALID. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS COUNT THEREFO RE CANNOT BE JUSTIFIED AND THE CLAIM IS DIRECTED TO BE ALLOWED DURING THE YEAR. 7. WE FURTHER FIND THAT THE CIT(A) IN THE CASE OF M /S. ARUN & COMPANY BOMBAY HAS RECORDED THE FACT THAT IN THIS RESPECT ALSO THE FACTS ARE SIMILAR AS IN THE CASE AT SR. NO.1 THE ASSESSEE-COMPANY HAD BEEN PURCHASING I MPORTED MATERIALS ON BEHALF OF THE GROUP COMPANIES. THE TOTAL AMOUNT DUE FROM T HE SAID GROUP COMPANIES AS ON 31-03-1997 IS RS.10 60 635/- RS.1 LAC WAS RECEIVED IN FINANCIAL YEAR 1996-97 AND THEREAFTER DEBIT BALANCES AS ON 01-04-2000 IS RS.9 60 635/- AND NO AMOUNT WAS RECEIVED THEREAFTER. THE ASSESSEES EFFORT IN FILIN G CIVIL PETITION BEFORE CITY CIVIL COURT HAS ALSO NOT YIELDED ANY RESULTS. THE WRITING OFF O F THE SAME AS TRADING LOSS AS PER BOARDS MEETING ON 29-10-2000 IS THEREFORE JUSTIFIE D AS IN THE CASE OF AT SR. NO. AND ACCORDINGLY DIRECTED TO BE ALLOWED U/S.37(1) R.W.S. 28 OF THE ACT. SIMILARLY IN THE CASE OF M/S. ARVIND DYE CHEM INDU STRIES AND ASSOCIATES THE CIT(A) RECORDED A FINDING THAT IN THIS GROUP OF 10 PARTIE S ON WHOSE BEHALF THE ASSESSEE HAD BEEN IMPORTING GOODS ON WHICH SERVICE CHARGES WERE RECEIVED @ 3% IN THE PAST THE ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 6 AMOUNT OF RS.31 262/- HAD BEEN WRITTEN OFF AS PER B OARDS RESOLUTION NO.1169/2001 DATED 29-10-2000 AND ENTRIES MADE ON 31-03-2001 HAV E BEEN APPROVED. THE EFFORTS BEFORE THE CITY CIVIL COURT IN THIS CASE HA S ALSO NOT YIELDED ANY RESULTS AND THE AMOUNTS HAVE BEEN DEBITED AS TRADING LOSS DURING TH E YEAR. THE RESPECTIVE DEBIT BALANCES ON VARIOUS YEARS FROM THE SAID GROUND OF C OMPANIES AS UNDER:- 31.03.1995 RS.39 19 665/- 31.03.1996 RS.38 84 665/- 31.03.1997 RS.36 16 407/- 31.03.1998 RS.31 28 222/- 31.03.1999 RS.31 28 222/- 31.03.2000 RS.31 8 222/- 31.03.2001 RS.31 8 222/- IT IS THEREFORE SENT HAT FOR THE LAST SEVERAL YEARS NO RECOVERY HAS BEEN POSSIBLE AND THEREFORE HAVING REGARD TO THE ABOVE FATS AND THE C ASE LAWS DISCUSSED IN SR. NO.1 THE AMOUNT IS CLEARLY ADMISSIBLE AS TRADING LOSS DU RING THE YEAR AND DIRECTED TO BE ALLOWED BY THE ASSESSING OFFICER. HOWEVER THE CIT(A) IN THE CASE OF M/S. GUJARAT GLA SS INDUSTRIES AND IN THE CASE OF M/S. CEE DEE CORPORATION AND ASSOCIATED PARTIES NOT ED THE FACTS THAT IN THIS CASE AN AMOUNT OF RS.6 50 049/- HAS BEEN WRITTEN OFF AS ON 31-03-2001 FOR WHICH APPROVAL OF THE BOARD WAS TAKEN AS PER RESOLUTION N O.1170/2001. THE FACTS ARE SIMILAR IN THIS CASE AS AT SR. NO.1 THE ONLY DIFFER ENCE IS THAT IN THIS CASE THE RE HAS BEEN DECREE IN FAVOUR OF THE ASSESSEE-COMPANY-COMPA NY FROM THE CITY CIVIL COURT DATED 18-10-2002 WHICH IS ALSO BEING FOLLOWED UP BY THE ASSESSEE-COMPANY WITHOUT MUCH LUCK. IT IS SUBMITTED BY THE ASSESSEES REPRES ENTATIVE THAT IN THIS CASE ALSO NO RECOVERY HAS BEEN POSSIBLE EVEN AFTER OBTAINING DEC REE IN FAVOUR OF THE ASSESSEE- COMPANY. HOWEVER SINCE THE DECREE IN FAVOUR OF THE ASSESSEE HAS BEEN RECEIVED ON 18-10-002 I.E. AFTER 31-03-001 THE CLAIM CANNOT BE CONSIDERED FOR ALLOWANCE IN FINANCIAL YEAR 2000-01 AND ACCORDINGLY THE ACTION O F THE ASSESSING OFFICER IN REJECTING THE CLAIM HAVE EVEN U/S.28/37(1) IS THERE FORE VALID IN THIS CASE. FURTHER IN THE CASE OF CEE DEE CORPORATION AND ASSOCIATED PAR TIES AN AMOUNT OF RS.9 207/- WAS WRITTEN OFF DURING THE YEAR FOR WHICH APPROVAL OF THE BOARD WAS ALSO TAKEN ON 29- 10-2001. HOWEVER NO SUPPORTING EVIDENCE BY WAY OF COPY OF ACCOUNT ETC. HAVE BEEN PRODUCED AND IN THE ABSENCE OF THE SAME IT CA NNOT BE SAID THAT THE LIABILITY HAS FINALIZED DURING THE YEAR. ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 7 8. IN VIEW OF THE ABOVE FACTS NOTED BY THE CIT(A) I N ALL THE CASES THAT THE MATTER IS PENDING BEFORE CITY CIVIL COURTS AND THE ASSESSE E IS TAKING ALL STEPS TO RECOVER THE AMOUNT BUT IT IS UNABLE TO. ACCORDINGLY WE ARE OF THE VIEW THAT BAD DEBTS CLAIMED BY THE ASSESSEE ARE ALLOWABLE AND WE ALLOW THE SAME. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED AND THAT OF THE REVENUE IS DISMIS SED. 9. THE ONLY REMAINING ISSUE IN THIS APPEAL OF THE A SSESSEE IN ITA NO.853/AHD/2005 IS AS REGARDS TO THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWANCE AMOUNTING TO RS.9 4 952/- ON ACCOUNT OF PF U/S.36(1)(VA) R.W.S.2(24)(X) OF THE ACT. THE LD. C OUNSEL FOR THE ASSESSEE STATED THAT THE PAYMENT OF PF WAS DUE ON 20-07-2000 AND THE SAM E WAS PAID ON 24-07-2000 WITHIN THE GRACE PERIOD. 10. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN F AVOUR OF ASSESSEE IN THE CASE OF CIT V. P.M. ELECTRONICS LTD. (2008) 220 CTR 635 (DEL) WHEREIN THE HON'BLE DELH I HIGH COURT HAS DISCUSSED IN PARA-4 AS UNDER:- 4. ON 27 TH NOV. 1998 THE ASSESSEE HAD FILED A RETURN OF INCO ME DECLARING A LOSS OF RS.8 92 888. ON 11 TH MAY 1999 THE RETURN WAS PROCESSED UNDER S. 143(1)(A) OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORDINGLY A NOTICE DT. 27 TH SEPT. 1999 UNDER S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE NOTICE A ND ON EXAMINATION OF THE DETAILS SUBMITTED BY THE ASSESSEE WITH RESPECT TO P ROVIDENT FUND PAYMENTS MADE BOTH ON ACCOUNT OF EMPLOYERS AND EMPLOYEES S HARE REVEALED THAT PAYMENTS IN THE SUM OF RS.17 94 042 WERE LATE AS PE R THE PROVISIONS OF S. 36(1)(VA) R.W S. 2(24)(X) AND S. 43B. CONSEQUENTLY THE AO DISALLOWED THE DEDUCTION AND ADDED A SUM OF RS.17 94 042 TOWARDS E PF CONTRIBUTION. AND SUBSEQUENTLY DECIDE THIS ISSUE IN PARA-10 TO 14 OF HON'BLE DELHI HIGH COURT WHICH READ AS UNDER:- 10. IN VIEW OF THE ABOVE IT IS QUITE EVIDENT THAT THE SPECIAL LEAVE PETITION WAS DISMISSED BY A SPEAKING ORDER AND WHILE DOING SO TH E SUPREME COURT HAD NOTICED THE FACT THAT THE MATTER IN APPEAL BEFORE I T PERTAINS TO A PERIOD PRIOR TO THE AMENDMENT BROUGHT ABOUT IN S. 43B OF THE ACT. T HE AFORESAID POSITION AS REGARDS THE STATE OF THE LAW FOR A PERIOD PRIOR TO THE AMENDMENT TO S. 43B HAS BEEN NOTICED BY A DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA (SUPRA) . APPLYING THE RATIO OF THE DECISION OF THE SUPREME COURT IN VINAY CEMENT (SUPRA) A DIVISION BENCH OF THIS COURT DISMISSED T HE APPEALS OF THE REVENUE. IN THE PASSING WE MAY ALSO NOTE THAT A DIV ISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. NEXUS COMPUTER (P) LTD. BY A ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 8 JUDGMENT DT. 19 TH AUG. 2008 PASSED IN TAX CASE (APPEAL) NO.1192/20 08 [REPORTED AT (2008) 219 CTR (MAD.) 54 ED.] DISCUS SED THE IMPACT OF BOTH THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF GEORGE WILLIAMSON (ASSAM) LTD. (SUPRA) AND VINAY CEMENT (SUPRA) AS WELL AS A CONTRARY VIEW OF THE DIVISION BENCH OF ITS OWN COURT IN SYNERGY FINANCIAL EXCHANGE (SUPRA). THE DIVISION BENCH OF THE MADRAS HIGH COURT HAS EXP LAINED THE EFFECT OF THE DISMISSAL OF A SPECIAL LEAVE PETITION BY A SPEAKING ORDER BY RELYING UPON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF KUNHAYAMMED & ORS.VS. STATE OF KERALA & ANR. (2000) 162 CTR (SC) 97: 119 STC 505 AT P. 526 IN PARA 40 AND NOTED THE FOLLOWING OBSERVATIONS : IF THE ORDER REFUSING LEAVE TO APPEAL IS A SPEAKIN G ORDER I.E. GIVES REASONS FOR REFUSING THE GRANT OF LEAVE THEN THE O RDER HAS TWO IMPLICATIONS. FIRSTLY THE STATEMENT OF LAW CONTAIN ED IN THE ORDER IS A DECLARATION OF LAW BY THE SUPREME COURT WITHIN THE MEANING OF ART. 141 OF THE CONSTITUTION. SECONDLY OTHER THAN THE DECLA RATION OF LAW WHATEVER IS STATED IN THE ORDER ARE THE FINDINGS RE CORDED BY THE SUPREME COURT WHICH WOULD BIND THE PARTIES THERETO AND ALSO THE COURT. TRIBUNAL OR AUTHORITY IN ANY PROCEEDINGS SUB SEQUENT THERETO BY WAY OF JUDICIAL DISCIPLINE THE SUPREME COURT BEING THE APEX COURT OF THE COUNTRY. BUT THIS DOES NOT AMOUNT TO SAYING TH AT THE ORDER OF THE COURT. TRIBUNAL OR AUTHORITY BELOW HAS STOOD MERGED IN THE ORDER OF THE SUPREME COURT REJECTING SPECIAL LEAVE PETITION OR T HAT THE ORDER OF THE SUPREME COURT IS THE ONLY ORDER BINDING AS RES JUDICATA IN SUBSEQUENT PROCEEDINGS BETWEEN THE PARTIES. 11. UPON NOTING THE OBSERVATIONS OF THE SUPREME COU RT IN KUNHAYAMMED & ORS. (SUPRA) THE DIVISION BENCH OF THE MADRAS HIGH COUR T IN THE CASE OF NEXUS COMPUTER (P) LTD. (SUPRA) CAME TO THE CONCLUSION THAT THE VIEW TAKEN BY THE SUPREME COURT IN VINAY CEMENT (SUPRA) WOULD BIND THE HIGH COURT AS IT WAS LAW DECLARED BY THE SUPREME COURT UNDER ART. 141 OF THE CONSTITUTION. 12. WE ARE IN RESPECTFUL AGREEMENT WITH THE REASONI NG OF THE MADRAS HIGH COURT IN NEXUS COMPUTER (P) LTD. (SUPRA). JUDICIAL DISCIPLINE REQUIRES US TO FOLLOW THE VIEW OF THE SUPREME COURT IN VINAY CEMEN T (SUPRA) AS ALSO THE VIEW OF THE DIVISION BENCH OF THIS COURT IN I DHARM ENDRA SHARMA (SUPRA). 13. IN THESE CIRCUMSTANCES WE RESPECTFULLY DISAGRE E WITH THE APPROACH ADOPTED BY A DIVISION BENCH OF THE BOMBAY HIGH COUR T IN PAMWI TISSUES LTD. (SUPRA). 14. IN THESE CIRCUMSTANCES INDICATED ABOVE WE ARE OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDER ATION IN THE PRESENT APPEAL. THE APPEAL IS THUS DISMISSED. 11. WE FIND THAT THE HON'BLE DELHI HIGH COURT IN TH E CASE OF P.M. ELECTRONICS LTD. (SUPRA) HAS DECIDED THIS ISSUE OF PAYMENT OF EMPLOY EES CONTRIBUTION TOWARDS PROVIDENT FUND AFTER CONSIDERING THE DECISION OF HO N'BLE APEX COURT IN THE CASE OF VINAY CEMENT (SUPRA) AND ALSO DISTINGUISHED THE CASE LAW REFERRED BY TH E LD. DR OF ITA NO.853 & 1043/AHD/2005 A.Y. 2001-02 ACIT CIR-4 ABD V. GUJARAT STATE EXPORT CORPN. LTD. PAGE 9 BOMBAY HIGH COURT IN PAMWI TISSUES LTD. (SUPRA) . ACCORDINGLY FOLLOWING DELHI HIGH COURT IN P.M. ELECTRONICS LTD. (SUPRA) WE ALLOW THE CLAIM OF THE ASSESSEE. ACCORDINGLY THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 12. IN THE RESULT ASSESSEES APPEAL IS ALLOWED AND THA T OF REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12/01/2010 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SI NGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED :12/01/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VIII AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD