JIWANRAM SHEODUTTRAI INDUSTRIES PVT. LTD.,KOLKATA vs. A.C.I.T., RANGE - 8, KOLKATA, KOLKATA

This appeal of the assessee for the assessment year 2012-13 is directed against the order dated 20.10.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee has raised the following grounds of appeal:

At the time of hearing, no one turned up. Although repeated notices were issued to the assessee from time to time from the registry therefore, we have no other option but to decide the appeal ex-parte with the assistance of ld. DR.

Brief facts of the case are that assessee is a private limited company filed its return of income for the A.Y. 2012-13 by declaring an income of Rs. 3,13,63,999/- and book profit u/s 115JB of the Act at Rs. 1,88,63,790/-. The case of the assessee was selected for scrutiny through CASS followed by statutory notices issued under the provisions of the Act. In response to the notice, the ld. AR of the assessee appeared before the ld. AO time to time and furnishes various details and submissions as asked for. After considering the submission of the assessee, the ld. AO disallowed various expenses as claimed by the assessee in following manner:

Based upon the above addition, the total income of the assessee for the A.Y. 2012-13 was assessed u/s 143(3) of the Act at Rs. 3,52,45,587/- and book profit which was assessed at Rs. 3,09,44,192/-.

Dissatisfied with the above order, assessee went into appeal before the ld. CIT(A) where the appeal of the assessee was partly allowed.

Aggrieved by the above order, assessee is in appeal before the Tribunal. The first ground of appeal is in relation with disallowance of Rs. 1,82,763/- made u/s 14A r.w. rule 8D of the Act. On this issue, the ld. DR stated that assessee has invested in shares and claimed exempt income of Rs. 10,22,953/- by way of dividend. At the time of framing of assessment, the submission of the assessee was that no expenditure had been incurred for earning such income and assessee was unable to bifurcate the fund utilized for making

We after going through the facts of the case and perused the record find that instant disallowance of Rs. 1,82,763/- as made by AO which was applying rule 8D while framing the assessment order was correct since assessee has failed to furnish the details of fund utilized for making such investment whether those from loans and on its own funds before the AO as well as ld. CIT(A). Therefore, both the lower authority has no other option but to sustain the order passed by the ld. AO on this issue. Even before us, the assessee has failed to controvert the fact by producing any supported document to prove the fact in its favour. Therefore, we do not find any infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the issue raised by the assessee is hereby dismissed.

Ground no. 2 is in relation to expenses incurred towards contractual payment for which TDS was not deducted and on which the ld. AO disallowed the expenditure amounting to Rs. 6,65,523/-

We after examining the facts of the case and considering the submission of the ld. DR find that when the assessee has failed to substantiate its ground before the AO as well as ld. CIT(A) on the issue involved. Therefore, the ld. CIT(A) sustained the order of ld. AO, as assessee stated before the AO that due to inadvertent lapse assessee could not deduct TDS and had no objection to the proposed disallowance made by the AO. Therefore, sustaining the order of AO by ld. CIT(A) is correct and accordingly we dismiss the ground taken by the assessee on the instant issue involved.

Ground no. 3 is in relation with leave encashment where assessee has failed to pay leave encashment to the employees

We after considering the submission of ld. DR and examining the facts of the case find that the alleged leave encashment amounting to Rs. 4,12,988/- assessee had failed to deposit before due date of filing of return. Therefore, the ld. CIT(A) has no other option but to upheld the order passed by the ld. AO. Similarly, at the time of hearing before us, the assessee has failed to controvert the fact as stated by the authority below in the impugned order. Therefore, we reject the ground taken by the assessee and sustained the order passed by the ld. CIT(A) on this issue.

Ground no. 4 is in relation with on account of employees contribution of PF & ESI beyond due date as prescribed under the Act. Accordingly, the ld. AO while framing the assessment, the ld. AO added an amount of Rs. 4,52,353/- in the hands of assessee u/s 36(1)(va) and u/s 2(24)(x) of the Act. On this issue, the 7 AY: 2012-13 Jiwanram Sheoduttrai Industries Pvt. Ltd. contention of the assessee in its ground of appeal is that the above addition was unwarranted and bad in law. The ld. DR on the instant issue raised by the assessee stated that instant issue involved come to the rest by the recent verdict of the Hon’ble Supreme Court in Chekmate Services Pvt. Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC) dated 12.10.2022 wherein it has been held that “deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act,1961.”

Accordingly, we follow the decision of Hon’ble Supreme Court as in the case of Checkmate Services Pvt. Ltd. vs CIT (supra) decide the issue against the assessee.

In ground no. 5 & 6 is consequential and general in nature therefore need not required to the adjudicated.

In the result, the appeal of the assessee is dismissed.