Karnataka High Court
The Commissioner Of Income-Tax vs Ngef (Hubli) Limited on 15 December, 2010
Author: V.G.Sabhahit
Bench: V.G.Sabhahit
THIS ITA COMING FOR FINAL HEARING om: TH;1slli'oA;gf' = V.G.SABI-IAHIT, J. DELIVERED THE FOLLOWING: .-- " -- 1. y JUDGMEN'I:';"""'*«l ..
This appeal is filed by the Revenue 0'cctio,n ._ the Income Tax Act, 1961 (hereinlafter re'1"erred_to asl"'tl1'e'l:Act')l' 0 being aggrieved by the order thevv..ln.c'ome Tax Appellate Tribunal, _(C), in ITA Nos. 188/Bang/ 2000 and Ba_ng/ 20.00' ~~._'d.a'ted 06.01.2004 wherein the appeal!-his disposed 'by=v.t.reating it as partly allowed for st;ati.stical» 0' g 0
2. Vy,.TheAgl"mate::ial 'facts lea-d.i,ngl up to this appeal, with referencelto fh"e,:p'a--rt1es before the Assessing Officer are as followsi = .--
he assessee return on 02.12.1996 for the _..V.asses3.ijnent year " 1.990197 showing return of ?1,63,38,969/-- after. settirig --oVff~-the earlier losses. The same was processed 1'é.l3.(1)(a) and a notice was issued under Section .143(2)' the assessee regarding claim of a sum of f¥31,.45,35'1./-- as Excise Duty on the closing stock of finished _l t~_go.ods"from the total income and the assessee was specifically asked to explain as to why the claim has been made separately L9,;/,9 collected forms part of trading receipt and Excise Duty paid during the year and thereafter upto the due date of. return qualifies for deduction under Section 43B§i_:p'foiiide_d _ relates to the relevant year and the Excise _D'uty:~rela.ting to it earlier years is also allowable under=,A_Sec-tiaofi during the year and was not<'al_loweid,Va"s deduction thei"; relevant earlier years and direcit'e»d:'the ii'Qfficer to verify these figures oifii"Excise Duty actually paid in excess of in accordance with Section Act above. Further allowed the regarding claiming depreciaitiioniofi in lump sum towards technicaliiiknowiiiiowiiunderi'iaection 35AB of the Act. Further regarding ernployees'wcontribution of ?4,73,84l/-- and .--v«.i¢mpl;o§:erEs_gAg' Vcontri'buti.or1 towards provident fund and .7administrative.charges total amounting to ?66,705/ --, in view of the io1eoisio'n-".o--_f 12TAT, Bangalore in HUNSUR PLYWOOD WORKS
--VLTD.,i"'v./'S, DCIT [54 In) 394], contribution paid within the 'grace period of five days from the normal due date of the 1591 of 'following month shall be allowed and out of the employees W3 contribution only ?1,18,920/- pertaining to February,-.1996 which was paid on 22.03.1996 deserves to be disallotwedf-«.gg.'As regard the employer's contribution of ?66,705/~ ' the month of March 1996 although it__was_4paidHon''1S;(14'.1_'996,_g 1"' i.e., within the grace period of five days, ifitstill the assessment year by virtue of the main provisiorilof...Section r ' 43B of the Act itself and allowed of ?66,705/-- and held u"{6,535/- towards administration charges $18.04. 1996 i.e., after the close_of:thehssessing Officer to assess of the first appellate authority:i,viit'hVe_A _IncoIne Tax, and also directed the Assessinxg"dfficerto-ire';-c:o'rnpute the interest in accordance with as laididown ih the case of UNION HOME PRIVATE Q':V'LTD.;'.f...{]/is; UNION 'OIFINDIA [215 rm 758] pertaining to 9inte1f€st--1irideriSecl.ion 234B and 234C which are compensatory andautomatic-.V.and consequential in nature giving no discretion . to the Assessing Officer or the appellate authority in the matter their_«leVy and accordingly disposed of the appeal. K9494
3. Being aggrieved by the said order it Appellate authority, the assessee filedv-I'I'A'.*1.88 V the Revenue being aggrieved by the orderiiof the authority so far as it had given thve~r..relief."to__ tl1eiass'e:s'see,'i:has 0' 0 filed ITA.l58/Bang/2000,. TheVAyA«p:pgellate Triibunalggvby order dated 06.01.2004 allowedbtlie-.ap_pVea1'assessee in part and dismissed the" Being aggrieved by /Bang/2000 and ITA. 158/ Bang/"200Ci.;--.; by the Revenue.
4. appeal""vvas_:ia-dmitted for consideration of the substantial ciu«estions._ of, law; framed in the appeal memo by ?,_2.l1l2'0v04..and the substantial questions of law ,ir1~._the appeal memo reads as follows:--
" if V\lhetij.erg'c1=tvhe Tribunal is correct in holding that the e.>'<.cise'i"i duty paid by the assessee during the "assessment year in respect of goods manufactured but not sold and reflected as closing stock during it the year could not be allowed as deduction as the same had not been sold during the relevant year?
2. Whether the Tribunal is correct in failing to appreciate and record a finding that the deduction claimed regarding excise duty, could not be allowed W during the current assessment year if provisions of Section 43B ofA:'the'«.Act wa-sinot it applicable to the facts and'--..circumvstancesi,_of'=:the~ present case?
Whether the Appellate_A'uthoritiesfwe're__ correct in holding that the 'DUE'i'li)'A'i7'_E'V' fes."ptee::tibed under Section 3611 i)(v_a) .sVh'o°uldVVbe"tiie extended grace. pe--riod§Eas_t_ pi'vesc_ribed under'tnemrespective Act for thegpptijrposeiiiof 'p'aynjeVnt made towards emiplcyéés coirfi:tiibu'ti~oVn- towards provident fund? Vllheth.er the correct in interfering with the uo'rd_er»oftheA'Appeilate Commissioner who has set. aside"'t-heufindirig of the assessing officer to re- V' eXami'i1.e the claim of Rs.36,580/- paid towards gAb'r.eac'_h~of' contract to assessees customers was an aVl'lowablefdeduction under Section 34(1) of the Act? it Wh.ether the Tribunal was correct in recording a A. finding that such payment was allowable as it is not Hz.-'a penalty of payment made for infraction of law without there being any material on record to support such a conclusion and consequently recorded a perverse finding?
W' V settled ' jooisietion of' :10: the year has to be allowed as deduction, as the same has not been sold during the relevant assessment year.
11. So far as the substantial question of lpayyiii and i are concerned, the same is covered by'theiidc':::ision 'of._a'-D.iyi'sion7 Bench of this Court in the case of INCOME TAX V/S. SABARI'v._r"ENTERPRISES iITAi Nos.1087/2006 85 wherein it has been held that when made during the grace period", of and penalty would not ofpthe Tribunal that deduction can be in respect of the earlier years, if is earlier years, under Section 43B has to b'ealloVwe'ol_, ii€i~,ia'lsio;unassailable having regard to the V as the substantial question of law No.4 is concerned, clear from the order passed by the Tribunal g and the orideripassed by the Commissioner of Income Tax and Assessing Officer that the said finding regarding the of ?36,580/~ was not allowed as deduction under "ta"?
:11: Section 37(1) of the Act stating that there was infractionlaw and the ITAT has rightly held that in the abs_e'nce«i.f_'of: _ infraction of law recorded a finding and having. to the ~« .. it facts and circumstances that there is_noj;in.fractionr.ofA law,' deduction of ?36,580/-- is »e1_iowah1e"'=and _.;¥eg.aii1~ciing; substantial questions of law are answered the Revenue and in favour of the assesisee, vvehoild ;that.. the apneal is devoid of merits and answer the points Tor::de.tern?i'in_a'.tion accordingly and pass the foli.o*.vi:n'_g:--
""" . 3.?' 'ihfe"ap"peai- is d'i';c;rii':s;<3,ed; learned counsel for the " app.ei|a.nt¥'i*évenue submits that he may be i "pe.rm_i_tted to file memo of appearance within four weeks from today.
Sd/-
JUDGE Sd/-
JUDGE