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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA No.638/Ind/2018 Assessment Year: 2015-16 ACIT-Ratlam M/s. Dynamic Enterprises, 65, बनाम/ Globus Township, Near Indralok Vs. Nagar, Ratlam (MP) (Revenue) (Respondent) PAN: AAJFD9155C Revenue by Shri K.G. Goyal, Sr. DR Respondent by Shri Kaide Kangsawala, CA Date of Hearing: 19.06.2019 Date of Pronouncement: 26.06.2019 आदेश / O R D E R PER MANISH BORAD, A.M: This appeal by Revenue pertaining to A.Y. 2015-16 is directed against the order of Ld. Commissioner of Income Tax(Appeals)- Ujjain, (in short ‘CIT(A)’), dated 24.04.2018 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(hereinafter called as the ‘Act’) framed on 26.12.2017 by ACIT, Ratlam. The Revenue has raised following grounds of appeal:
Dynamic Enterprises ITANo.638/Ind/2018 (i) Whether on the facts and in the circumstances of the case, Ld. CIT(A) was justified in deleting the disallowance of Rs.14,19,387/- u/s 2(24)(x) r.w.s. 36(1)(va) of the I.T. Act made on account of delay in payment of provident fund and ESIC. (Note- this issue is covered under the exceptions mentioned in para (8(a) & (b) of the Board’s Circular No.21/2015 dated 10.12.2015 since the constitutional validity of the provisions of an Act or Rule are under challenged for the A.Y. 2015-16) 2. Brief facts as culled out from the records are that the assessee is a partnership firm engaged in the business of cleaning contract awarded by the railways. Income of Rs.71,99,890/- declared in the return of income filed on 30.10.2015. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) and 142(1) of the Act. Assessment u/s 143(3) of the Act was completed on 26.12.2017 assessing income at Rs.94,19,277/- after making disallowances of Rs.14,19,387/- which included disallowance towards delay in payment of Provident Fund(PF) & ESIC contribution of Rs.14,19,387/-.
Aggrieved assessee preferred an appeal before the ld. CIT(A) against the impugned disallowance of Rs.14,19,387/- made by the Ld. AO u/s 2(24)(x) r.w.s. 36(i)(va) of the Act and succeeded.
Dynamic Enterprises ITANo.638/Ind/2018 5. Now the revenue is in appeal before the Tribunal challenging the disallowance of Rs.14,19,387/- towards delay in payment of PF & ESIC.
At the outset Ld. counsel for the assessee submitted that the issue stands squarely covered in favour of the assessee by the judgment of Hon'ble Supreme Court in the case of CIT vs. Rajasthan State Beverages Corporation Ltd. (2017) 250 Taxman 0016, as the assessee has deposited the impugned amount before filing the return of income u/s 139(1) of the Act.
Per contra Learned Departmental Representative (Ld. DR) could not controvert the contention made by the ld. counsel for the assessee.
We have heard rival contentions and perused the record placed before us. The revenue’s sole grievance relates to challenging the finding of Ld. CIT(A) deleting disallowance of Rs.14,19,387/- made u/s 2(24) r.w.s. 36(i)(va) of the Act for delay in payment of PF & ESIC contribution. We find that the Ld. CIT(A) deleted the impugned disallowance observing as follows: 3
Dynamic Enterprises ITANo.638/Ind/2018 “Ground No.1,2 & 3:- Through these grounds of appeal the appellant has challenged the addition of Rs.14,19,387/- u/s 2(24)(x) of the I.T. Act. The appellant made the above payments before filing of return of income. The above expenditure is allowable expenditure in view of Hon'ble I.T.A.T., Indore’s decision in the case of Assessment. CIT v. Indira Export Pvt. Ltd. (2013) 21 ITJ 372 (Trib.-Indore)-Employees contribution to Provident Fund-Employees contribution to Provident Fund- Deletion of second proviso to section 43B-HELD – in view of CIT v. Alom Extrusions Ltd. (2010) 14 ITJ 133 (Hon'ble Supreme Court), deletion of second proviso is retrospective-Therefore, even if employees contribution is deposited before due date of filing of return, same is allowable. Therefore, the addition made by the AO amounting to Rs.14,19,387/- is deleted. Therefore the appeal on these grounds is allowed.”
The above finding of the Ld. CIT(A) goes uncontroverted by the Ld. DR. We, therefore, in the given facts and circumstances of the case as well as on account of settled position of law as held by Hon'ble Apex Court in the case of CIT vs. Rajasthan State Beverages Corporation ltd. (supra), find no inconsistency in the finding of the Ld. CIT(A) deleting the disallowance of Rs.14,19,387/- made u/s 36(i)(va) of the Act on observing that the alleged amount of Employees Contribution towards PF & ESIC stands deposited before the due date of filing of return of income u/s 139(1) of the Act relevant to A.Y. 2015-16.
Dynamic Enterprises ITANo.638/Ind/2018 10. In the result, the appeal of the revenue is dismissed. Order was pronounced in the open court on 26 .06.2019.
Sd/- Sd/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore; �दनांक Dated : 26 /06/2019 ctàxÄ? P.S/.�न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Assistant Registrar