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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER BENCH :
These four appeals by the assessee arise against separate common order dated 06.02.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi for assessment years 2010-11, 2012-13, 2013-14 and 2014- 15.
2 ITA Nos.354 to 357/PUN/2023
Since, the issues raised in all the appeals are similar basing on identical facts. Therefore, we proceed to hear all the appeals together and to pass a consolidated order for the sake of convenience.
First, let us take up ITA No.354/PUN/2023 for assessment year 2010-11.
The assessee raised two grounds of appeal, amongst which the only issue emanates for our consideration is as to whether NFAC, Delhi is justified in confirming the order of Assessing Officer in respect of disallowance made on account of depreciation u/s 32 of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).
We note that the assessee is a company, engaged into hotel and hospitality business. The assessee claimed depreciation on fixed assets. According to the Assessing Officer, the assessee could not furnish final bills or certification of addition to fixed assets in respect of work done or goods supplied, held no evidences filed to prove that the assets have been purchased and put to use, thereby, the Assessing Officer disallowed the depreciation to an amount of Rs.1,17,37,005/-. In challenge before the NFAC, Delhi, breakup of fixed assets added were shown which are reproduced by the NFAC, Delhi in the impugned order at page No.3. According to NFAC, Delhi, there were no bills furnished by the assessee in support of claim of depreciation which is evident from para 6.1 of the impugned order. It is pertinent to note that the assessee raised ground
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No.2 before us contending the NFAC, Delhi did not appreciate the additional evidences filed in support of its claim of depreciation. But, however, we note that there was no discussion or reference whatsoever made by the NFAC, Delhi in respect of additional evidences stated to have been filed by the assessee in the first appellate proceedings. We find no such evidences filed before this Tribunal also. If that is the case, the matter is liable to be remanded to the file of Assessing Officer for fresh consideration in view of the contention raised through ground No.2 stating filing of additional evidences. The ld. DR placed on record order dated 07.07.2022 passed in assessee‟s own case for A.Y. 2011-12 by the Co- ordinate Bench of this Tribunal wherein it is noted that this Co-ordinate Bench restored the sole and substantive grievance i.e. disallowance of depreciation to the file of Assessing Officer for his fresh detailed adjudication vide para No.3 of the said order. The ld. DR fairly conceded that the matter may be restored to the file of Assessing Officer in terms of directions rendered by the Co-ordinate Bench in A.Y. 2011-12. Taking into consideration the submissions of ld. DR and in the interest of justice, we deem it appropriate to remand the matter to the file of Assessing Officer for its fresh consideration. The assessee is at liberty to file evidences, if any, in support of its claim. Thus, grounds of appeal raised by the assessee are allowed for statistical purposes.
ITA No.355/PUN/2023 for Assessment year 2012-13
The view taken by us in appeal for A.Y. 2010-11 in the aforementioned paragraphs is equally applicable to ground Nos.1 to 3 of
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this appeal for A.Y. 2012-13 also. Thus, grounds of appeal raised by the assessee are allowed for statistical purposes.
ITA No.356/PUN/2023 for Assessment year 2013-14
The view taken by us in appeal for A.Y. 2010-11 in the aforementioned paragraphs is equally applicable to the grounds of appeal No.1 and 2 for A.Y. 2013-14 also. Thus, grounds of appeal No.1 and 2 are allowed for statistical purposes.
Ground No.3 is with regard to disallowance confirmed by the CIT(A) for delayed deposit of employees‟ contribution to Provident Fund.
We note that the AO disallowed Rs.15,68,926/- u/s 36(1)(va) of the Act. Having aggrieved, the assessee preferred an appeal before the CIT(A). The assessee contended that the assessee is entitled to claim deduction if the employee‟s contribution is paid before due dates of filing return of income. The CIT(A) on an examination of Tax Audit Report held that the assessee did not deposit an amount of Rs.15,68,926/- which is employee‟s contribution towards PF/ESI before the due date under the respective Acts and confirmed the disallowance made by the AO for delay in depositing the said employee‟s contribution before due dates concerning the relevant Acts. The ld. DR placed on record the decision of Hon‟ble Supreme Court in batch of the appeals, lead case being Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016 and submitted that the assessee is not entitled to
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claim deduction if the employee‟s contribution is not paid within due dates of respective statutes. On careful reading of the said decision of Hon‟ble Supreme Court held that Section 2(24)(x) deems amount received from the employees as income and the amounts retained by the employer from out of the employee‟s income by way of deduction etc. were treated as income in the hands of the employer (assessee). Further, it held unless the conditions spelt by Explanation to section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date of respective statutes, the assessee is not entitled to claim benefit of deduction from the total income. Therefore, in our opinion, essential condition for claiming such deduction if such amounts are deposited on or before due date of respective statutes. It is evident from the impugned order that the assessee deposited the employee‟s contribution to PF/ESI after the prescribed due date of relevant Act which is not disputed by the ld. AR. Therefore, following the decision of Hon‟ble Supreme Court in the case of Checkmate Services P. Ltd. (supra) we find no infirmity in the order of CIT(A), NFAC, Delhi in holding the assessee is not entitled to claim deduction for its failure to deposit employee‟s contribution before due date prescribed under the relevant statutes. Thus, the grounds raised by the assessee are fails and it is dismissed.
Ground No.4 is in respect of challenging the action of NFAC, Delhi in respect of disallowance made u/s 37(1). We note that the assessee has made a provision of Rs.18,86,393/- for road construction from NH-7 to Sun and Sand Hotel. The assessee claimed the same as revenue
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expenditure stating no enduring benefit has been derived out of such construction as the road does not belonged to the assessee. The Assessing Officer did not accept the same. We note that before the CIT(A) it was contended, to direct the Assessing Officer for examination of deferment of said revenue expenditure for a reasonable period of time 3 to 5 years. The NFAC, Delhi did not consider the same, but however held the view of Assessing Officer is right and legal. Since the issue of depreciation on fixed assets is remanded to the file of Assessing Officer, in our opinion, this issue also is inter-linked with the issue raised in ground Nos.1 and 2, if it is remanded to the file of Assessing Officer is fair and proper in the interest of justice. Thus, ground No.4 raised by the assessee is allowed for statistical purposes.
Ground Nos.5 and 6 relating to disallowance of Rs.1,44,98,254/- made u/s 40(a)(ia) for violation of non deduction of tax u/s 194H. We note that the Assessing Officer discussed the same in assessment order at para No.11. According to the Assessing Officer, the assessee should have deducted TDS u/s 194H in respect of payments made to banks / credit card companies on behalf of the assessee as the said banks / credit card companies have rendered services for the assessee. Accordingly, disallowed the same. The NFAC, Delhi vide para No.6.4 held that the disallowance made by the Assessing Officer on this issue was reduced after due verification on the basis of details furnished by the assessee. We note that there was no part relief as granted by the NFAC, Delhi in respect of this issue by giving directions to the Assessing Officer nor any rectification
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order referred to by the NFAC, Delhi in the impugned order. In view of the same, we propose to remand the issue raised in grounds of appeal No.5 and 6 to the file of Assessing Officer for his fresh examination. The assessee is at liberty to file evidences, if any in support of its claim. Thus, grounds of appeal No.5 and 6 raised by the assessee are allowed for statistical purposes.
ITA No.357/PUN/2023 for Assessment year 2014-15
The view taken by us in ITA No.354/PUN/2023 in respect of disallowance on account of depreciation is equally apply to the grounds of appeal No.1 to 3 raised in this appeal also. Thus, grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeals of assessee in ITA Nos.354/PUN/2023, 355/PUN/2023 & 357/PUN/2023 are allowed for statistical purposes and the appeal in ITA No.356/PUN/2023 is partly allowed for statistical purposes.
Order pronounced in the open court on 24th May, 2023.
Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ददनाांक / Dated : 24th May, 2023. GCVSR
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आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : अपीलाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The CIT concerned. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, “ए” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. गार्ड फ़ाइल / Guard File. 5. //सत्यादपत प्रदत// True Copy// आदेशानुसार / BY ORDER,
वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune