Income Tax Appellate Tribunal - Ahmedabad
Sequel Logistics Pvt. Ltd.,, Ahmedabad vs The Dy.Cit, Circle-8,, Ahmedabad on 18 April, 2018
ITA No. 2238/Ahd/2014
Sequel Logistics Pvt Ltd Vs. DCIT
Assessment year: 2010-11
Page 1 of 4
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "C" BENCH, AHMEDABAD
[Coram: Pramod Kumar AM and S S Godara JM]
ITA No. 2238/Ahd/2014
Assessment Year: 2010-11
Sequal Logistis Pvt Ltd ..............................Appellant
431, Chetan Society,
Bopal Ghuma Road,
Ahmedabad - 380058
[PAN : AAHCS 9813 P]
Vs.
Dy. Commissioner of Income-tax ...........................Respondent
Circle - 8, Ahmedabad
Appearances by:
PM Mehta for the Appellant
Prasoon Kabra for the Respondent
Date of concluding the hearing : 18.04.2018
Date of pronouncing the order : 18.04.2018
O R D E R
Per Pramod Kumar, AM:
1. By way of this appeal, the assessee-appellant has challenged correctness of the order dated 16th June, 2014 passed by the by the CIT(A)-XIV, Ahmedabad, in the matter of assessment under section 143(3) of the Income-tax Act, 1961, for the assessment year 2010-11.
2. In the first ground of appeal, the assessee-appellant has raised the following grievance:-
"In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in confirming the addition made by the Assessing Officer for Rs.2,39,822/- on account of delay in deposit of employee's contribution to Provident Fund and ESI u/s 2(24)(x) r.w.s. 36(1)(va) of the Act, even though the same was deposited before the due date of filing the return. The Assessing Officer may be directed to delete this addition."
3. Learned representatives fairly agree that the aforesaid issue is squarely covered against the assessee by Hon'ble jurisdictional High Court's judgment in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in the case of delayed deposit of employees' contribution to PF, the same will not be deductable in computing income under section 28 of the Act. The law so laid down by the Hon'ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending ITA No. 2238/Ahd/2014 Sequel Logistics Pvt Ltd Vs. DCIT Assessment year: 2010-11 Page 2 of 4 before the Hon'ble Supreme Court does not dilute binding nature of this judicial precedent. As regard dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd, (2017) 84 taxmann.com 185 (SC), it is only elementary that when a SLP is dismissed by a non-speaking order, it does not constitute a law declared by Hon'ble Supreme court, and as such, it is not binding under Article 141 of the Constitution of India. The authority, for this proposition, is contained in a series of judgments of Hon'ble Supreme Court, including, inter alia, in the cases of State of Manipur vs. Thingujam Brojen Meetai, (1996) 9 SCC 29; Om Prakash Gargi v. State of Punjab, (1996) 11 SCC 399 and Sun Export Corpn v. Collector of Customs, AIR 1997 SC 2658. We, therefore, see no legally sustainable merit in the case of the assessee and, respectfully following the judgment of Hon'ble jurisdictional High Court in the case of Gujarat State Road Transport Corporation (supra), dismiss the grievance of the assessee.
4. In the result, ground No.1 is dismissed.
5. In ground No.2, the assessee has raised the following grievances:-
"2.1 In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in confirming the addition amounting to Rs.2,18,090/- pertaining to prior period expenses made by the Assessing Officer, when no such disallowance is called for 2.2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has erred in overlooking the fact that the amount of prior period expenditure is minor in nature in comparison with the aggregate expenditure running into crores of rupees. He ought to have directed Assessing Officer to delete disallowance so made.
2.3. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has failed to appreciate the fact that TDS pertaining to the security expenses considered as prior period expenses was paid only in A.Y.2010-11, hence such expenditure is required to be allowed as an expense in current assessment year only.
2.4. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has failed to appreciate the fact that the tax rates pertaining to the assessment year in question and the immediately preceding year are uniform, hence no disallowance can be made only on the ground that an expenditure pertaining to an earlier year is claimed in the current year."
6. We find that this issue has been decided in favour of the assessee by the decision of Hon'ble jurisdictional High Court vide order dated 20.07.2017 in the case of Pri. CIT vs. Adani Enterprises Ltd in Tax Appeal No. 573 of 2016, wherein the Hon'ble Gujarat High Court has held as under:-
"Revenue has filed this appeal raising the following questions for our consideration:
"(A) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in was right in confirming of disallowance of Prior Period expenditure of Rs.3,07,53,106/- by the ld. CIT(A)?ITA No. 2238/Ahd/2014
Sequel Logistics Pvt Ltd Vs. DCIT Assessment year: 2010-11 Page 3 of 4 (B) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in confirming the disallowance of Rs.50,31,149/- out of exemption claimed u/s. 10AA of the Act?"
Insofar as question (A) is concerned, in a separate tax appeal being Tax Appeal No.566/2016, against the same assessee, we made the following observations :
"2. Main question is sum of Rs.67.88 Iacs (rounded off) which the Assessing Officer and CIT(Appeals) disallowed treating the expenditure as a prior period expenditure. The Tribunal reversed the findings of the Revenue authorities primarily on two grounds. Firstly, that the assessee being a company was charged uniformly for all years and would therefore, have no revenue implication of whether the expenditure was recognised in this assessment year or earlier year. The second ground was that in any case, the Revenue had recognised the prior period income. If that be so, according to the Tribunal, it would be unfair not to recognise the expenditure also of the prior period.
3. Having heard learned counsel for the parties and having perused the documents on record, we see no reason to interfere. Firstly, the expenditure of Rs.67.881acs is a fraction of the total income of the assessee company declared at Rs.105.88 crores. Further, even the Revenue does not dispute that the company would be taxed at the same rate in the present assessment year or during earlier year. It is also not disputed that prior period income was declared by the assessee during the current year which is also accepted by the Revenue. No question of law therefore, arises."
So far as question (B) is concerned, we notice that the Tribunal has merely remanded the issue.
No question of law arises. Tax appeal is dismissed."
7. Respectfully following the judgement of the Hon'ble Gujarat High Court in the case of Adani Enterprises Ltd (supra), we delete the addition made by the Assessing Officer amounting to Rs.2,18,090/- towards Prior Period Expenditure.
8. In the result, ground no.2 is allowed.
9. In the result, appeal of the assessee is partly allowed. Pronounced in the open court today on the 18th April, 2018 Sd/- Sd/-
S S Godara Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 18th day of April, 2018 **bt ITA No. 2238/Ahd/2014 Sequel Logistics Pvt Ltd Vs. DCIT Assessment year: 2010-11 Page 4 of 4 Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
1. Date of dictation: ................covered matter...18.04.2018...
2. Date on which the typed draft is placed before the Dictating Member: 18.04.2018..........
3. Date on which the approved draft comes to the Sr. P.S./P.S.: ...18.04.2018....... .
4. Date on which the fair order is placed before the Dictating Member for Pronouncement: .. 18.04.2018.....
5. Date on which the file goes to the Bench Clerk : . 18.04.2018.....
6. Date on which the file goes to the Head Clerk : ..................................
7. The date on which the file goes to the Assistant Registrar for signature on the order: ......
8. Date of Despatch of the Order: ........................