PRINCIPAL COMMISSIONER OF I T JAIPUR-2 vs. M/S RAJ STATE GANGANAGAR SUGAR MILLS LTD

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ITA/128/2015HC RajasthanRJHC02084903201509 November 20163 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that all the substantial questions of law raised in these appeals were completely covered by its previous decision in the case of Commissioner of Income Tax Vs. M/s. Rajasthan State Ganganagar Sugar Mills Ltd., decided on 26.05.2016. Consequently, the substantial questions of law were required to be answered in favour of the assessee and against the Department. The Court noted that some of these questions had been raised in earlier appeals but were not considered substantial questions of law at that time. Therefore, all the present appeals deserved to be dismissed. The operative direction was to dismiss the appeals.

What were the facts?

The appellant, Principal Commissioner of Income Tax, has filed three appeals (D.B. Income Tax Appeal Nos. 128/2015, 172/2016, and 175/2016) challenging the judgment and order of the Income Tax Appellate Tribunal (ITAT), Jaipur Bench. The ITAT had dismissed the Revenue's appeals, thereby affirming the orders of the Commissioner of Income Tax (Appeals). In one specific appeal (172/2016), the ITAT's decision was based on the CIT (Appeals) following a prior Tribunal decision. The High Court noted that the questions of law raised in these appeals were covered by its own earlier decision in the case of Commissioner of Income Tax Vs. M/s. Rajasthan State Ganganagar Sugar Mills Ltd., decided on 26.05.2016.

What were the issues?

The High Court was to decide on several substantial questions of law. The primary questions involved: 1. Whether the Tribunal was justified in deleting additions of Rs.73,20,000/- made by the Assessing Officer, holding that Excise Duty cannot be part of the valuation of finished stock under Section 145A and is only levied upon removal of goods. 2. Whether the Tribunal was justified in deleting the addition of Rs.97,15,000/- by holding that Export Pass Fee was an allowable expenditure despite being a contingent liability. 3. Whether the Tribunal was justified in deleting the addition of Rs.6,86,900/- on account of accrued interest earned on accrued interest on decreed disputed compensation. 4. Whether the Tribunal was justified in deleting an addition of Rs.1,00,00,000/- by disallowing privilege fees paid to the Excise Commissioner, Government of Rajasthan, treating it as an application of income. 5. Whether the Tribunal erred in deleting an addition of Rs.6,463/- made under Section 36(1)(va) read with Section 2(24)(x) for delayed deposit of employee's contribution to PF & ESI. 6. Whether the Tribunal erred in holding that employee's contribution to PF & ESI are governed by Section 43B and not by Section 36(1)(va) read with Section 2(24)(X). The Revenue contended that the Tribunal's orders were not justified. The Assessee's contentions were not explicitly recorded, but the outcome suggests they supported the Tribunal's deletions. The judgment relies on a prior decision of the High Court.

Which sections of the Income-tax Act were involved?

Section 145A,Section 36(1)(va),Section 2(24)(x),Section 43B

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. (1) D.B. Income Tax Appeal No.128/2015 Principal Commissioner of Income Tax Versus M/s. Rajasthan State Ganganagar Sugar Mills Ltd. (2) D.B. Income Tax Appeal No.172/2016 Principal Commissioner of Income Tax Versus M/s. Rajasthan State Ganganagar Sugar Mills Ltd. (3) D.B. Income Tax Appeal No.175/2016 Principal Commissioner of Income Tax Versus M/s. Rajasthan State Ganganagar Sugar Mills Ltd. DATE OF JUDGMENT ::: 09th November, 2016 HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE GOVERDHAN BARDHAR Mr. Nikhil Simlote, for the appellant. BY THE COURT

1.

By way of these appeal, the appellant has challenged the judgment and order of the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur whereby the Tribunal has dismissed the appellant's appeals and has affirmed the order of the Commissioner of Income Tax (Appeals).

2.

In Income Tax Appeal No.172/2016 the Tribunal has specifically confirmed the order only in view of the fact that the CIT (Appeals) has followed the decision of the Tribunal. In all appeals we are not reproducing the questions of law Obj0018EDFA Object 1

2 but in Income Tax Appeal No.128/2015 we are producing the questions of law as under : i) Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the additions of Rs.73,20,000/- made by the Assessing Officer holding that the Excise Duty cannot be part of valuation of finished stock u/s. 145A and can only levied on the removal of goods from the premises. ii) Whether on the facts and in law the ITAT was justified in deleting the addition of Rs.97,15,000/- holding that the Export pass fee was allowable expenditure deposit of the fact that it was contingent liability. iii) Whether in the facts and circumstances of the case, the Tribunal was justified in law in deleting the addition of Rs.6,86,900/- made by the Assessing Officer on account of accrued interest earned on accrued interest earned on decreed disputed compensation. iv) Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the addition of one crore made by the Assessing Officer by way of disallowing privilege fees paid by the assessee to Excise Commissioner Govt. Rajasthan despite the fact that it was application of income. v) Whether in the facts and circumstances of the case, the Tribunal has erred in deleting addition of Rs.6,463/- made under Section 36(1)(va) r.w.s. 2(24)(x) of the IT Act for depositing the employee's contribution to PF & ESI beyond the prescribed time limit provided in the respective Acts. vi) Whether in the facts and circumstances of the case, the Tribunal has erred in holding that employee's contribution to PF & ESI are governed by the provision of section 43B and not by section 36(1)(va) r.w.s. 2(24)(X) of the IT Act.

3.

However, in view of decision of this Court in DB Income Tax Appeal No.99/2009, titled as Commissioner of Income Tax Vs. M/s. Rajasthan State Ganganagar Sugar Mills Ltd., decided on 26.05.2016, the issues are completely covered by the said decision of this Court. Therefore,

3 substantial questions of law are required to be answered in favour of the assessee and against the Department.

4.

Some of the question of law raised here were raised in earlier appeal but were not considered as substantial question of law therefore, all the appeals deserve to be dismissed.

5.

Accordingly, dismissed.

6.

A copy of this order be placed in connected matters. (Goverdhan Bardhar), J. (K.S. Jhaveri), J. MS/-2-4

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