BHUMISHREE CONSULTANCY & MARKETING PVT. LTD.,BHUBANESWAR vs. ITO, WARD-1(1), BHUBANESWAR

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ITA 286/CTK/2018Status: DisposedITAT Cuttack22 February 2019AY 2014-154 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the EPF and ESIC contributions were deposited by the assessee prior to the filing of the return of income, the disallowance was not justified. The decision of the Supreme Court in Rajasthan Beverage Corporation Ltd. was followed.

What were the facts?

The Assessing Officer disallowed Rs. 16,66,206/- for employees' contribution to EPF and ESIC not deposited by the due date. The assessee contended that the deposits were made before the due date of filing the return of income.

What were the issues?

Whether disallowance of employees' contribution to EPF/ESIC is justified when deposited before the due date of filing the return of income, even if after the statutory due date for deposit.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG

For Appellant: Shri Natabar Panda, AR
For Respondent: Shri A.K.Dutta, DR
Hearing: 22/02Pronounced: 22/02

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER

ITA No.286/CTK/2018 Assessment Year : 2014-15

Bhumishree Consultancy & Vs. ITO, Ward 1(1), Marketing Pvt Ltd., 725-P, Bhubaneswar. Kartik Palace Lane 6, B M Nagar, Gandamunda, Bhubaneswar. PAN/GIR No.AADCB 6540 L (Appellant) .. ( Respondent)

Assessee by : Shri Natabar Panda, AR Revenue by : Shri A.K.Dutta, DR

Date of Hearing : 22/02/ 2019 Date of Pronouncement : 22/02/ 2019

O R D E R This is an appeal filed by the assessee against the order of

the Commissioner of Income Tax(Appeals)-1, Bhubaneswar dated

20.4.2018 for the assessment year 2014-15.

2.

Ground Nos.1 & 4 of appeal are general in nature and

hence, requires no separation adjudication by me.

3.

In Ground No.2 & 3, the grievance of the assessee is that

the CIT(A) is not justified in confirming the addition of

Rs.16,66,206/- towards employees’ contribution and ESIC made

by the Assessing Officer.

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4.

The Assessing Officer has disallowed Rs.16,66,206/-

u/s.36(1)(va) r.w.s. 2(24)(x) of the Act on account of employees

contribution towards EPF and ESIC not deposited within the due

date, which was confirmed in appeal by the CIT(A).

5.

Before me, ld Counsel for the assessee submitted that the

issue is covered by the various orders of Hon’ble High Courts and

the Tribunal including the decision of Hon’ble Karnataka High

Court in the case of M/s. Essae Teraoka Pvt Ltd. Vs. DCIT in ITA

No.480/2013 order dated 4th February, 2014 and order of the

Cuttack Bench of the Tribunal in the case of M/s. Kalinga Institute

of Training vs ITO in ITA Nos.435 & 436/CTK/2017 for the

assessment year 2011-12 and 2012-13 order dated 28.12.2017.

6.

Replying to above, ld D.R. strongly supported the orders of

the lower authorities and placed reliance on the decision of

Hon’ble Gujarat High Court in the case of Gujarat State Road

Transport Corporation, 366 ITR 170 (Guj).

7.

On a careful consideration of above submission of both the

parties, I am of the considered opinion that there are contrary

decisions of various Hon’ble High Courts on this issue. However,

the judgment of Hon’ble Rajasthan High Court in the case of

Rajasthan Beverage Corporation Ltd holds good as the SLP filed by

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the department has been dismissed by Hon’ble Supreme in the

case of Pr. CIT vs Rajasthan Beverage Corporation Ltd., (2017)

84 Taxman. Com 185 (SC), wherein, it has been held as under:

“Section 43B, read with section 36(1)(va), of the Income Tax Act, 1961-Business disallowance-certain deduction to be allowed only on `actual payment (PF & ESI construction)- High Court by the impugned order held that amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va)- Whether SLP against said impugned order was to be dismissed-Held yes (para 2) in favour of assessee. 8. Reverting to the facts of the present case, ld D.R. has

alleged that the assessee did not deposit the EPF and ESIC

contribution within the due date and the same was deposited after

the prescribed due date. Therefore, the Assessing Officer was

right in making the addition and the CIT(A) was correct in

upholding the same.

9.

However, in all fairness, ld D.R. did not dispute the fact for

assessment year 2014-15, the date of filing of return was

30.11.2014 and the impugned deposit of EPF/ESIC contributions

have been made by the assessee prior to filing of return of income

under section 139(1) of the Act.

10.

Considering the above facts, I am of the considered view

that the ratio of the decision of Hon’ble Supreme Court in the case

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of Rajasthan Beverage Corporation Ltd., (supra), is applicable to

the present case, which is in favour of the assessee. Therefore,

following the same, I delete the addition of Rs.16,66,206/- being

EPF and ESIC contribution and allow the grounds of appeal of the

assessee.

11.

In the result, appeal of the assessee is allowed

Order pronounced on 22/02/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 22/02/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Bhumishree Consultancy & Marketing Pvt Ltd., 725-P, Kartik Palace Lane 6, B M Nagar, Gandamunda, Bhubaneswar. 2. ITO, Ward 1(1), The Respondent. Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT- 1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order

Sr. Pvt. Secretary, ITAT, Cuttack

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