DCIT, CIR-1(2), KOLKATA, KOLKATA vs. M/S. BMW INDUSTRIES LIMITED, KOLKATA

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ITA 411/KOL/2017Status: DisposedITAT Kolkata20 July 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that payments of PF and ESI made before the due date of filing the return are allowable, following jurisdictional High Court precedent. It also held that Section 14A disallowance is not applicable in the absence of any exempt income.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting disallowances made by the Assessing Officer. The disallowances pertained to late contributions to PF and ESI, and disallowance under Section 14A read with Rule 8D.

What were the issues?

Whether disallowance of PF/ESI contributions made after statutory due dates but before return filing date is valid, and whether Section 14A applies when no exempt income is earned.

Which sections of the Income-tax Act were involved?

Section 14A,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENCH ‘C’ KOLKATA

Before: Hon’ble Shri J.Sudhakar Reddy, AM & Shri S.S.Godara, JM]

This Revenue’s appeal for A.Y. 2012-13 calls into question the CIT(A)-12, Kolkata’s order dated 28.12.2016 passed in Appeal No.180406/CIT(A)- 12/Kol/CIT(A)-1/DCIT,Hqrs.-1/2016-17 reversing the Assessing Officer’s action adding inter-alia disallowing/adding assessee’s contribution to PF and ESI of Rs.13,06,978/- beyond due date and section 14A r.w.r. 8D disallowance of Rs.96,23,922/-; respectively made in assessment order dated 31.03.2015 involving proceedings u/s 143 (3) of the Income Tax Act, 1961 (Act). Heard both the parties. Case file perused.

2.

We come to the former issue of ESI/PF contribution disallowance of Rs.,13,06,978/- made by the Assessing Officer alleging assessee’s late payment beyond due date. There is no dispute that the assessee has paid the impugned sum before prior to the relevant date of filing return prescribed u/s 139(1) of the Act. The Assessing Officer however was of the view that the said payments had been made after the due dates prescribed under the relevant specific laws. He therefore made the impugned addition as deleted in the lower appellate proceedings. Suffice to say, we M/s BMW Industries Ltd. A.Y.2012-13 2 find the hon’ble jurisdictional high court’s decision in CIT vs Vijay Shree Ltd in of 2011 decided on 06.09.2011 has rejected the Revenue’s similar argument seeking to revive the impugned disallowance in the case involving payment of employees ESI/PF dues before filing of the return. We thus find no merit in the Revenue’s instant former grievance. The same stands rejected accordingly.

3.

Coming to the Revenue’s latter substantive ground that the CIT(A) has erred in law as well as on facts in deleting section 14A r.w.r. 8D of Rs.96,23,922/-. We find the instant issue also to be no more res integra as the hon’ble jurisdictional high court in CIT vs M/s Ashika Global Securities Ltd in ITAT 100 of 2014, GA NO.2122 of 2014 decided on 11.06.2018 holds that the same does not apply in absence of any exempt income having been derived by the concerned assessee. We thus confirm the CIT(A)’s findings under challenge qua the instant latter issue as well.

4.

This Revenue’s appeal is dismissed.

Order pronounced in the Court on 20.07.2018.

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