Income Tax Appellate Tribunal - Jaipur
M/S K.S. Automobiles Pvt. Ltd., Jaipur vs Deputy Commissioner Of Income Tax, ... on 8 March, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"A" JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 1184 /JP/2018
fu/kZkj.k o"kZ@Assessment Year : 2013-14
M/s K.S. Automobiles Pvt. Ltd. cuke The ITO,
National Motors Building, Vs. Ward 2(2),
M.I. Road, Jaipur. Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADCK 5973 A
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITA No. 1185/JP/2018
fu/kZkj.k o"kZ@Assessment Year : 2014-15
M/s K.S. Automobiles Pvt. Ltd. cuke The DCIT,
National Motors Building, Vs. Circle-2,
M.I. Road, Jaipur. Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADCK 5973 A
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj l@
s Assessee by : Shri P. C. Parwal (C.A.)
jktLo dh vksj ls@ Revenue by : Shri A. K. Mehla (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 05/03/2019
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 08/03/2019
vkns'k@ ORDER
PER: VIJAY PAL RAO, J.M. These two appeals by the assessee are directed against the composite order of the ld. CIT(A), Jaipur both dated 06.08.2018 for the ITA No. 1184 &1185/JP/2018 M/s K.S. Automobiles Pvt. Ltd. vs. ITO/DCIT assessment years 2013-14 & 2014-15 respectively. The assessee has raised common grounds in these appeals as under:-
"1. The Ld. CIT(A) has erred on facts and in law in confirming the disallowance of employees contribution to PF of Rs. 11,02,343/- and ESI of Rs. 24,035/- by invoking provisions of Section 2(24)(x) r.w.s. 36(1)(va).
2. The assesse craves to amend, add, alter, or modify any of the ground of appeals.
3. Necessary cost be allowed to the assessee."
2. The solitary common issue raised in these appeals is regarding disallowance of employees construction to PF and ESI within the due date of filing of return of income but after the due date of payment as per respective Acts PF & ESI.
3. We have heard the ld. AR as well as ld. DR and considered the relevant material on record. At the outset, we note that this issue is covered in favour of the assessee by the various decisions of the Hon'ble jurisdictional High Court including the decision in case of CIT vs. State Bank of Bikaner & Jaipur 99 DTR 131 as well as decision in case of CIT vs. Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307 and in case of CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 366 ITR 163. We further note that the ld. CIT(A) though has not disputed the various decisions of Hon'ble High Court however, 2 ITA No. 1184 &1185/JP/2018 M/s K.S. Automobiles Pvt. Ltd. vs. ITO/DCIT disallowance made by the AO are sustained as he misunderstood the decision of Hon'ble Jurisdictional High Court in case of PCIT vs. M/s Rajasthan Renewable Energy Corporation Limited in DB ITA No. 10,11 & 12/2018 dated 13.03.2018. In the case of PCIT vs. M/s Rajasthan Renewable Energy Corporation Limited (supra) the Hon'ble High Court has considered this issue in para 4 to 6 as under:-
"4. So far as question No. 1 is concerned, the same is now covered by the decisions of this Court in Principal Commissioner of Income-Tax V/s Rajasthan state seed Corporation Ltd. [2016] 386 ITR 267 (Raj) wherein it has been held as under:-
"In so far as the expenditure incurred on State Renewal Fund is concerned, the said expenditure also goes to show that the renewal fund was set up by the State Government and was created with the object of providing a safety net for the workers likely to be effected by restricting in the State Public Enterprise and that a finding of fact has been recorded that the contribution made to the State Renewal fund is solely for the purposes of the welfare and benefit of the employees. In our view, it is for the assessee to decide whether any expenditure should be incurred in the course of business and expenditure of this nature being for business expediency is certainly allowable deduction under section 37(1) of the Act. In our view any normal expenditure for the welfare and benefit of the employees is allowable expenditure under section 37(1), the Tribunal has come to a finding of fact that it was a legal obligation of the respondent-assessee towards 3 ITA No. 1184 &1185/JP/2018 M/s K.S. Automobiles Pvt. Ltd. vs. ITO/DCIT contribution of the said amount to the State Renewal Fund and there being a legal obligation as well in our view the Tribunal has come to a correct conclusion."
In view of the above, question No. 1 is answered in favour of the assessee and against the department.
6. With regard to issue No. 2 and 3 the controversy is pending before the Supreme Court in C.I.T., Jaipur Vs/ Ms State Bank of Bikaner and Jaipur in SLP© No. 16249/2014, therefore, subject to decision of SLP, for the present, these issues are decided on in favour of the department and against the assessee. It will be open for the department to recover the amount if the decision is in their favour."
Thus, it is clear that the Hon'ble jurisdictional High Court has followed the earlier decisions in case of PCIT vs. Rajasthan State Seed Corporation Limited 386 ITR 267 as well as decision in case of CIT vs. State Bank of Bikaner & Jaipur (supra). All these decisions which were ollowed by the Hon'ble jurisdictional High Court are in favour of the assessee however, in the conclusion in para 6 there is a typographical mistake wherein it is stated "these issues decided in favour of the Department and against the assessee". The whole decision of the Hon'ble High Court has to be considered in the contest of the decision followed and the subsequent line which says "it will be opened for the 4 ITA No. 1184 &1185/JP/2018 M/s K.S. Automobiles Pvt. Ltd. vs. ITO/DCIT Department to recover the amount" if the decision in their favour which means that in case of further appeal before Hon'ble Supreme Court if decision is delivered in favour of the department it can recover the amount. Therefore, even the decision which is relied upon the ld. CIT(A) the same is in favour of the assessee though due to typographical mistake it was misunderstood by the ld. CIT(A) as in favour of the Revenue. Accordingly, in view of a series of decisions of the Hon'ble Jurisdictional High Court in favour of the assessee and further Hon'ble Supreme Court in case of PCIT vs. Rajasthan State Beverages Corporation Ltd. 250 taxmann 16 has dismissed the SLP filed by the Department this issue is decided in favour of the assessee and against the Revenue. Hence, disallowances/additions made by the AO on account of employees contribution to PF & ESI are deleted.
In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 08/03/2019.
Sd/- Sd/-
¼foØe flag ;kno½ ¼fot; iky jko½
(Vikram Singh Yadav) (Vijay Pal Rao)
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur
fnukad@Dated:- 08/03/2019.
*Santosh.
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ITA No. 1184 &1185/JP/2018
M/s K.S. Automobiles Pvt. Ltd. vs. ITO/DCIT
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M/s K.S. Automobiles Pvt. Ltd., Jaipur.
2. izR;FkhZ@ The Respondent- ITO, Ward 2(2)/DCIT, Circle-2, Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File {ITA No.1184 & 1185/JP/2018} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 6