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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI MANISH BORAD, & SHRI TR SENTHIL KUMAR
PER MANISH BORAD, A.M: The above captioned appeal at the instance of assessee for Assessment Year 2017-18 is directed against the order of National Faceless Appeal Centre (NFAC) Delhi dated 03.11.2021 which is arising out of the order u/s 143(1) of the Income Tax Act 1961(In short the ‘Act’) dated 14.03.2019 framed by DCIT, CPC, Bangalore.
The assessee has raised following grounds of appeal for:
1. Ld. CIT(A) erred and confirmed the prima facie adjustment made on account of payment of ESI and PF beyond the due date of relevant Act.
Shri Shitaram Solanki. ITANo.282/Ind/2021 The assessee paid said amount before due date of filing of return as such no prima facie adjustment was warranted.
2. The Ld CIT(A) erred in facts of the case and confirmed the adjustment of Rs.1,00,000/- being incentive received from Principal ITC Limited ignoring the fact and explanation, the said amount was duly credited in Profit & Loss Account. That the Ld. CIT(A) erred on facts of the case and confirmed the addition made at Rs.1,00,000/- by way of prima facie adjustment without appreciating the fact that said amount was already included in income of the assessee. The addition therefore made is a double addition and taxing the same at higher rate under section 115BBE.
That the appellant craves to leave, add, alter or amend any of the grounds of appeal before hearing.
Brief facts of the case as culled out from the records are that the assessee is an individual. Return for A.Y. 2017-18 filed on 12.07.2017 and income of Rs.23,29,770/- declared. Return processed u/s 143(1) of the Act assessing income at Rs.25,78,190/- after making addition. Assessee carried the matter before Ld. CIT(A) but failed to succeed.
3. Now the assessee is in appeal before this Tribunal. Ld. counsel for the assessee referred to the written submissions filed before the Ld. CIT(A) and prayed for relief.
Per contra Ld. DR supported the order of Ld. CIT(A).
We have heard rival contentions and perused the records placed before us. Ground no.1 relates to addition u/s 36(1)(va) of the Act for delayed payment of employees contribution towards PF and ESI at Rs.1,37,851/-. Though the assessee has made a delay in terms of dates prescribed under the relevant Act governing PF and ESI but the alleged amounts stands duly deposited before the due date of Shri Shitaram Solanki. ITANo.282/Ind/2021 filing the return of income u/s 139(1) of the Act and this fact remains undisputed at the end of Revenue. We find that Coordinate Bench Kolkata in the case of Lumino Industries Ltd. v. ACIT circle 5(1) Kolkata ITANo.365/Kol/2021 dated 17.11.2021 had adjudicated this issue after considering all the settled judicial precedence laying down following two ratios:
i.) Amendment brought in by the Finance Act 2021 w.e.f. 01.04.2021 by inserting explanation to section 36(1)(va) of the Act r.w.s. 43B of the Act is prospective in nature and shall be inforce from assessment 2021-22 and onwards. ii.) If the employees contribution to PF and ESIC for the financial year is deposited before the due date of filing return of income u/s 139(1) of the Act, then no disallowance is called for u/s 36(1)(va) of the Act.
Examining the facts of the instant case, we find that the issue pertains to assessment year 2017-18 and alleged amount of Rs.1,37,851/- has been deposited before due date of filing the return of income u/s 139(1) of the Act. Therefore, under these given facts and circumstances and also in view of the decisions of this Tribunal in the case of M/s Industrial Filters and Fabrics Pvt. Ltd. vs. ACIT-5(1), in ITANo.961/Ind/2012 and also respectfully following the decision of Coordinate Bench Kolkata in the case of Lumino Industries Ltd.(supra), we are of the considered view that no disallowance of Rs.1,37,851/- was called for u/s 36(1)(va) of the Shri Shitaram Solanki. ITANo.282/Ind/2021 Act. Thus, finding of Ld. CIT(A) is set aside and the ground no.1 raised by the assessee is allowed.
Ground no.2 relates to addition of Rs.1 lakh for amount received by the assessee as incentive from ITC Limited. This incentive was in the nature of prize money on which tax was deducted at source @ 30%. Since this income was not shown under the head income from other sources both lower authorities have made the alleged addition. We, however on perusal of the paper book page no.5 find that in the profit and loss account in the year ending 31st March 2017, assessee has shown the prize from ITC Ltd. at Rs.1,00,000/- on the credit side and the net profit in the year of Rs.2,48,435/- includes the prize from ITC of Rs.1 lakh. This net profit has been duly shown in the computation of income and taxes paid thereon. The only mistake committed by the assessee is that the alleged prize money should first have been deducted from net profit shown under the head, “Income from Business” and then to be shown under the head “Income from other sources”. However, since the alleged income has been disclosed in the Income Tax Return and due taxed paid, there hardly remains any merit in the finding of Ld. Assessing Officer making the addition for Rs.1 lakh as it will tantamount to double taxation.
We, therefore, under the given facts and circumstances of the case and also observing that prize money of Rs.1 lakh has been offered to tax, hold that finding of Ld. CIT(A) deserves to be Shri Shitaram Solanki. ITANo.282/Ind/2021 reversed. We, accordingly do so, and allow ground no.2 raised by the assessee.
In the result, appeal of the assessee in ITANo. 282/Ind/2021 is allowed.
The order pronounced as per Rule 34 of ITAT Rules, 1963 on 29.03.2022.