Income Tax Appellate Tribunal - Panji
Dcit, Jaipur vs Jaipur Zila Dugdh Utpadak Sahkari Sangh ... on 9 August, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 508/JP/2017
fu/kZkj.k o"kZ@Assessment Year : 2013-14
DCIT cuke Jaipur Zila Dugdh Utpadak
Circle-6 Vs. Sahkari Sangh Ltd. Near
Jaipur Gandhi Nagar Railway
Station, Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No.: AAAAJ0767G
vihykFkhZ@Appellant izR;FkhZ@Respondent
jktLo dh vksj ls@Revenue by : Sh. R. A. Verma
fu/kZkfjrh dh vksj ls@Assessee by : Shri P.C. Parwal
lquokbZ dh rkjh[k@Date of Hearing : 03/08/2017
?kks"k.kk dh rkjh[k@Date of Pronouncement: 09/08/2017.
vkns'k@ORDER
PER:SHRI VIKRAM SINGH YADAV, A.M. This is an appeal filed by the revenue against the order of ld. CIT(A)-2, Jaipur dated 21.03.2017 wherein the revenue has taken following grounds of appeal:
"1. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 1,31,21,958/- made by the AO in disallowing contribution made to 'Sparsh Trust' without appreciating the fact that assessee failed to prove direct business nexus and it is not an allowable expenditure u/s 37(1).
2. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of Rs. 14,48,774/- made by the AO for depositing the employee's contribution to PF & ESI beyond the prescribed time limit provided in respective Acts.ITA No. 508/JP/2017
DCIT, Circle-6, Jaipur Vs Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd.
3. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified 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 I.T.Act."
2. At the outset, the ld AR submitted that the issue in ground no.1 of the Revenue's appeal is covered in favour of the assessee by earlier orders of Tribunal in assessee's own case for AY 2008-09, 2009-10, 2010-11 and 2012- 13 respectively.
3. The Coordinate Bench vide its order dt. 15.03.2012 (in ITA No. 820/JP/11) for A.Y. 08-09 has given its findings as under:
"After considering the submissions, orders of the authorities below, we find that assessee deserve to succeed in its ground raised. It is noticed that before creating SPARSH, the assessee was doing all these expenditure itself. Just for betterment of administration services, the assessee created the Trust through whom these expenses are incurred. The Profit & Loss account of the Trust is maintained, copy of which is placed in the compilation and it is seen that whatever amount has been given by assessee or reimbursed by assessee, that has been spent by the trust on the animals to get better quality and quantity of milk. The assessee has contributed @ Rs.0.05 per litre of milk procured to its trust for the purpose of incurring expenditure for better quality of milk. An agenda note was prepared which clearly states that the purpose of contribution is for medical and health facility of the animals of the milk producers at the District level. The contribution made by assessee to trust is thus directly linked with the procurement of better quality, hygienic and more quantity of the milk. It is in the interest of the assessee that the milk animals at the village level from where it procures the milk are healthy and for this purpose, SPARSH Trust incurred expenditure in providing vaternity care, regular treatment, emergency care, preventive care, breed improvement through A.I. uninterrupted supply of nutritional supplement etc. Therefore, in our considered view, contribution made by assessee to this trust is an expenditure incurred wholly and exclusively for the purpose of business which is allowable u/s 37(1). From the income and expenditure account of the trust, it can be noted that it has incurred an expenditure in pursuance of its objectives and after considering the receipts, there is 2 ITA No. 508/JP/2017 DCIT, Circle-6, Jaipur Vs Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd.
deficit to the trust in the year under consideration. Such deficit is met out of the contribution made by assessee to the Trust. It is further seen that before creating this trust, the assessee was incurring all these expenses itself and all these expenses were allowed by the department while completing assessment u/s 143(3).Therefore, this is not a case that assessee has made donation to any trust and, therefore, the same cannot be allowed as business expenditure. The Id. CIT (A) has disallowed the claim of assessee by observing that since assessee has made donation u/s 80G and, therefore, deduction u/s 80G is allowable whereas the facts are otherwise. The assessee has not made any donation but has contributed to the trust for a specific purpose i.e. to incur the expenditure to get better milk from milk animal. Various case laws relied upon by the assessee are in support of the case of the assessee. We are not getting into details in respect of those cases as they have already been mentioned in the written submissions which are reproduced herein above. In view of these facts and circumstances, we hold that the expenditure/contribution made by assessee is allowable as business expenditure. Accordingly, the addition made and confirmed by lower authorities is deleted."
4. The Coordinate Benches in subsequent years i.e, AY 2009-10, 2010-11 and 2011-12 have taken a similar view in the matter. The ld CIT(A) has followed the said orders while allowing the relief to the assessee for the impunged assessment year. During the course of hearing, the ld DR also fairly conceded that the matter is covered in favour of the assessee by earlier orders of the Tribunal.
5. Undisputedly, there is no change in the facts and circumstances of the case. No contrary authority has been brought to our notice. The issue in question is covered in favour of the assessee by the earlier decisions of the Coordinate Benches in assessee's own case. Respectfully following the earlier decisions of the Coordinate Benches, the contribution of Rs. 1,31,21,958 made by the assessee to SPARSH Trust is accordingly allowed as an eligible 3 ITA No. 508/JP/2017 DCIT, Circle-6, Jaipur Vs Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd.
business expenditure under section 37(1) of the Act. Thus, the ground raised by the Revenue is dismissed.
6. In Ground No.2 & 3 of the Revenue's appeal, the disallowance under dispute relates to addition of Rs. 14,48,774 made by the AO for depositing the employee's contribution to PF and ESI beyond the prescribed limit provided in the respective Acts.
7. In this regard, the relevant finding of the CIT(A) is reproduced as under:
"I have perused the facts of the case, the assessment order and the submissions of the appellant. Admittedly, contribution to PF & ESI has been paid by the appellant, in all instances, before the due date of filing the return of income u/s 139(1). This fact is therefore, not in dispute. In view of the judgments of the Rajasthan High Court in the case Jaipur Vidhyut Nigam Ltd., 265 CTR 62 (Raj.), CIT vs. State Bank of Bikaner & Jaipur (2014) 99 DTR 131 (Raj.), and other case laws on this issue, the claim of the appellant is allowable. Accordingly, this disallowance made by the Assessing Officer is, directed to be deleted. This ground is allowed."
8. We don't find any infirmity in the order of ld CIT(A) which is hereby confirmed. Thus, ground no. 2 & 3 of Revenue's appeal are dismissed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 09/08/2017.
Sd/- Sd/-
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(Kul Bharat) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
4
ITA No. 508/JP/2017
DCIT, Circle-6, Jaipur Vs Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd.
Jaipur Dated:- 09/08/2017 *Ganesh vkns'k dh izfrfyfi vxzsf"kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- DCIT Circle-6 Jaipur
2. izR;FkhZ@The Respondent- Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur
3. vk;dj vk;qDr@CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@Guard File (ITA No. 508/JP/2017) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar.5