Income Tax Appellate Tribunal - Ahmedabad
Dev Information Technology Pvt. Ltd.,, ... vs The Deputy Commissioner Of Income Tax, ... on 2 August, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'SMC' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 412/Ahd/2017 ( नधा रण वष / Assessment Year : 2013-14) Dev Information बनाम/ Dy. Commissioner of Technology Pvt. Ltd., Vs. Income Tax, 14, Aaryan Corporate Park, Circle - 1(1)(2), Nr. Shilaj Crossing Thaltej, Ahmedabad Ahmedabad थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAACD5427B (अपीलाथ /Appellant) .. (!"यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri M. J. Shah, A.R. !"यथ क$ ओर से / Shri Alok Kumar, Sr. D.R. Respondent by :
सन ु वाई क$ तार ख / Date of 04/07/2018 Hearing घोषणा क$ तार ख /Date of 02/08/2018 Pronouncement आदे श/O R D E R PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the assessee against the order of the CIT(A)-1, Ahmedabad ('CIT(A)' in short), dated 28.10.2016 arising in the assessment order dated 06.11.2015 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2013-14.
2. Assessee has filed belated appeal by 39 days. Considering the smallness of delay, the same stands condoned and the appeal is admitted for hearing.
I T A N o . 4 1 2 / Ah d / 1 7 [ D e v I n f o r m a t i o n T e c h n o l o g y P v t . L t d . v s . D C I T ] A. Y . 2 0 1 3 - 1 4 - 2 -
3. Ground no.1 concerns deletion of disallowance of delayed in payment of employees' contribution to Provident Fund (PF) and Employees' State Insurance Corporation (ESIC) aggregating amount of Rs.17,99,164/- under s. 2(24)(x) of the Act.
4. The CIT(A) denied the relief claimed by the assessee in the first appeal.
5. Aggrieved, the assessee preferred appeal before the Tribunal.
6. We have examined the issue towards allowability of PF & ESIC under s.36(1)(va) r.w.s. 2(24)(x) of the Act. We notice at the outset that the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation 366 ITR 170 (Guj) is against the assessee on the first principles. The Hon'ble Gujarat High Court considered the question with respect to the disallowance of amount being employees' contribution to PF account/ESIC contribution, which admittedly, the assessee in that case did not deposit with the PF department/ ESIC department on or before the due date under the PF Act and/or ESI Act. However, in the course of hearing before us, the assessee has tried to demonstrate that employees' contribution to PF/ESIC has been made before the 'due date' as prescribed under the respective Act having regard to the month of disbursement of salary/wages and also the grace period available under the relevant Acts. It is thus broadly the case of the assessee that the relevant 'due date' for making payment of contribution has to be seen not with reference to the relevant months relatable to wages/salary but the month of its actual disbursement. Coupled with this, grace period available I T A N o . 4 1 2 / Ah d / 1 7 [ D e v I n f o r m a t i o n T e c h n o l o g y P v t . L t d . v s . D C I T ] A. Y . 2 0 1 3 - 1 4 - 3 -
under the respective Act is also required to be taken into account. In this regard, we observe that the co-ordinate bench of Tribunal in Kanoi Paper & Industries Ltd. vs. ACIT 75 TTJ 448 has observed that the relevant due date in such a case is to be seen with reference to the month of the actual disbursement of wages/salaries. We also are of the view that grace period available under the respective Acts should be taken into account while computing the delay, if any.
7. Hence, we consider it expedient to restore the issue back to the file of the AO for factual verification and re-determination of the issue in the light of the observations made by the co-ordinate bench in the case of Kanoi Paper & Industries Ltd. (supra). The AO shall thus re-compute the amount of disallowance under s.36(1)(va) r.w.s. 2(24)(x) of the Act, if any, on the above basis, in accordance with law. The assessee shall be entitled to relief under s. 36(1)(va) r.w.s. 2(24)(x) of the Act where it is found that the deposits have been made towards PF/ESIC within the due date from the close of month of actual disbursement of salary/wages in the light of interpretation rendered in case of Kanoi Paper & Industries Ltd. (supra).
8. In the result, ground no.1 of the assessee's appeal is allowed for statistical purposes.
9. Ground no.2 concerns disallowance of Rs.62,632/- by invoking Section 14A of the Act.
10. The aforesaid amount of Rs.62,632/- represents estimated disallowance at 0.5% of the investment as per third limb of Rule 8D(2). In view of the tax free income generated from the I T A N o . 4 1 2 / Ah d / 1 7 [ D e v I n f o r m a t i o n T e c h n o l o g y P v t . L t d . v s . D C I T ] A. Y . 2 0 1 3 - 1 4 - 4 -
investment and in view of the administrative expenses required to be incurred for handling the issues connected to investment portfolio, we do not see any error in the order of CIT(A) in sustaining the aforesaid disallowance.
11. In the result, ground no.2 of the assessee's appeal is dismissed.
12. In the result, appeal of the assessee is partly allowed.
This Order pronounced in Open Court on 02/08/2018
Sd/- Sd/-
(MAHAVIR PRASAD) (PRADIP KUMAR KEDIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad: Dated 02/08/2018
True Copy
S. K. SINHA
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आयु1त / Concerned CIT
4. आयकर आयु1त- अपील / CIT (A)
5. 5वभागीय !8त8न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड< फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद ।