Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED & MS. MADHUMITA ROY
आदेश / O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)–8, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-8/75/15-16 dated 10/01/2017 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(here-in-after referred to as "the Act") dated 13/03/2015 relevant to Assessment Year (AY) 2012-13.
The interconnected issue raised by the assessee in Ground Nos.2 & 3 is that the Ld.CIT(A) erred in confirming the addition on account of
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 2 - provisions for doubtful debts and advances amounting to Rs. 54,34,757/- and Rs. 8,58,062/- respectively.
The facts of the case are that the assessee is a limited company and engaged in the business of selling, erection, installation and repairs and maintenance of elevators and escalators. The assessee during the year has made provisions for the doubtful debts and doubtful advances. The details of the same stand as under:
Sl.No. Particulars Amount (Rs. ) 1. Provision for doubtful debts 54,34,757/- 2. Provision for doubtful advances 8,58,062/-
The assessee during the assessment proceedings submitted that it had adjusted the provision created for doubtful debts with the amount of debtors shown in the balance-sheet as on 31.3.2012. The assessee in support of his claim relied on the judgment of Hon’ble Supreme Court in the case of Vijaya Bank vs. CIT reported in 323 ITR 166 (SC).
4.1. The assessee for the provision of doubtful advances of Rs. 8,58,062/- submitted that it represents the advances given to the staff, customers, advocates, gratuity and business associates. As such, these advances were given in the course of the business and recovery of the
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 3 - same was not possible. Accordingly, a provision in the books of accounts was created against such advances.
4.2. However, the Assessing Officer disagreed with the submission of the assessee and held that the provision for debts had not been adjusted against the outstanding balance of the individual ledgers. Therefore, the same cannot be allowed as a deduction under the provisions of section 36(1)(vii) of the Act.
4.3. Similarly, the Assessing Officer also held that the provision for advances had not fulfilled the conditions as specified u/s 36(2) of the Act. The Assessing Officer also observed that the assessee failed to establish the nexus with the business for the provision created against the advances. Therefore, the same cannot be allowed as deduction u/s 37(1) of the Act.
4.4. Because of the above, the Assessing Officer disallowed the sum of Rs. 62,92,819/- (Rs. 54,34,757/- for the provision of doubtful debts and Rs. 8,58,062/- for the provision of doubtful advances) and added to the total income of the assessee.
The aggrieved assessee preferred an appeal to the Ld. CIT(A).
The assessee before the Ld. CIT(A) submitted that the provision for bad debts had been reduced from the amount of sundry debtors shown
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 4 - in the balance sheet. Thus, it has met the terms of the provision of section 36(2) of the Act.
6.1. Similarly, the assessee also submitted that it had provided advances given in the course of business and, which are not recoverable now. Therefore, the provision made in respect of the same is eligible for deduction u/s 37(1) of the Act.
6.2. However, the Ld. CIT(A) disregarded the contention of the assessee and confirmed the order of the Assessing Officer.
Being aggrieved by the order of Ld. CIT(A), the assessee is in appeal before us.
The Ld. AR before us submitted that in the identical facts and circumstances in the own case of the assessee, the Hon’ble Tribunal in ITA No. 291/Ahd/2015 for AY 2011-12 vide order dated 22/09/2017 has restored this issue to the file of Assessing Officer for fresh adjudication as per the provisions of law. Accordingly, he prayed before us to restore this issue to the file of Assessing Officer for fresh adjudication.
On the other hand, the Ld. DR did not object if the matter is restored to the file of Assessing Officer for fresh adjudication as per the provisions of law.
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 5 - 10. We have heard the rival contentions and perused the materials available on record. At the outset, we find that the issue is covered by the decision of the Coordinate Bench in assessee’s case (supra), wherein the Coordinate Bench has held as under: “4. At the time of hearing before us, the ld.Counsel for the assessee submitted that this matter may be remitted to the file of the Assessing Officer for fresh adjudication in the light of Hon’ble jurisdictional High Court’s full bench decision in the case of CIT vs. Vodafone Essar Gujarat Ltd. in Tax Appeal No.749 of 2012. Learned Departmental Representative did not object to the same. In view of above, with the consent of the parties, the matter is remitted back to the file of the Assessing Officer for fresh adjudication in the light of Hon’ble Gujarat High Court’s full bench decision cited supra. This ground is thus allowed for statistical purposes.” 10.1 Respectfully following the same, we allow the ground of appeal of the assessee for statistical purpose.
The second issue raised by the assessee in Ground No.4 is that the Ld. CIT(A) has erred in confirming the disallowance of Rs. 5,03,115/- on account of delay in Employee’s Contribution of PF and ESI u/s.2(24)(x) r.w.s. 36(1)(va) of the Act.
Facts of the case are that the assessee in the year under consideration has deposited employee’s contribution towards PF and ESI, etc., after the due date as prescribed under the relevant Act. Therefore, the Assessing Officer disallowed the same under the provisions of
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 6 - section 2(24)(x) r.w.s. sec.36(1)(va) of the Act and added to the total income of the assessee.
12.1. The aggrieved assessee preferred an appeal before the Ld. CIT(A) who has confirmed the order of the Assessing Officer.
12.2. The ld. AR before us conceded the fact that the issue is covered against the assessee by the Hon’ble Gujarat High Court in the case of CIT vs. GSTRC reported in 41 taxmann.com 100.
12.3. On the other hand, the Ld. DR relied upon the orders of the authorities below.
On perusal of the orders of the authorities below, we find that the aforesaid amount represents Employee’s contribution towards employees’ PF and ESI. In these circumstances, we find no legal infirmity in the order of the CIT(A) in view of the decision of the Hon’ble Jurisdictional High Court in the case of Gujarat State Road Transport Corporation (2014) 41 taxmann.com 100 (Guj.). Hence, the ground of appeal of the assessee is dismissed.
Ground Nos.1 & 5 are general in nature which requires no independent adjudication.
ITA No.792/Ahd/2017 Trio Elevators Co. (India) Ltd. vs. DCIT Asst.Year - 2012-13 - 7 - 15. In the result, the appeal of the assessee is partly allowed for statistical purposes.
This Order pronounced in Open Court on 01/02/2018
Sd/- Sd/- (MS.MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 01/02/2019
ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-8, Ahmedabad �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad