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Industrial Security & Allied v/s ITO, Ward-1(1), Bhubaneswar


Company & Directors' Information:- SECURITY CO LTD [Active] CIN = L65929WB1948PLC016992

Company & Directors' Information:- G SECURITY (INDIA) PRIVATE LIMITED [Active] CIN = U74920MH2004PTC150235

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74920MH2005PTC152956

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74110MH2005PTC152956

Company & Directors' Information:- B D SECURITY PRIVATE LIMITED [Active] CIN = U74920JK2006PTC002638

Company & Directors' Information:- G I SECURITY PRIVATE LIMITED [Active] CIN = U74140WB1993PTC057724

Company & Directors' Information:- R M G SECURITY PRIVATE LIMITED [Strike Off] CIN = U74910TN1997PTC038969

Company & Directors' Information:- G D A SECURITY PVT LTD [Active] CIN = U74899DL1973PTC006424

Company & Directors' Information:- J S D SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2009PTC197167

Company & Directors' Information:- S M SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL1996PTC007805

Company & Directors' Information:- J AND J SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC128735

Company & Directors' Information:- W B SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920RJ2012PTC040905

Company & Directors' Information:- G T I SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2013PTC251541

Company & Directors' Information:- J. B. C. SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2017PTC302126

Company & Directors' Information:- AT SECURITY PRIVATE LIMITED [Strike Off] CIN = U74999DL2012PTC234962

Company & Directors' Information:- L N T SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL2001PTC109776

Company & Directors' Information:- VERSUS SECURITY PRIVATE LIMITED [Strike Off] CIN = U74900DL2009PTC195274

Company & Directors' Information:- S O L SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2002PTC115968

Company & Directors' Information:- H S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC127249

Company & Directors' Information:- M P S SECURITY PRIVATE LIMITED [Under Process of Striking Off] CIN = U74920DL2007PTC169952

Company & Directors' Information:- M AND G SECURITY PRIVATE LIMITED [Active] CIN = U74920HR2020PTC087465

Company & Directors' Information:- I S S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2000PTC103574

    ITA No. 131/CTK of 2018

    Decided On, 02 August 2018

    At, Income Tax Appellate Tribunal Cuttack

    By, THE HONOURABLE MR. ACCOUNTANT MEMBER & THE HONOURABLE MR. JUDICIAL MEMBER

    For the Appellant: P.K. Sahoo, AR. For the Respondent: D.K. Pradhan, DR.



Judgment Text

1. N.S. Saini, AM This is an appeal filed by the assessee against the order of the CIT(A)- 1, Bhubaneswar dated 20.2.2018 for the assessment year 2014-15.

2. Ground No.1 of appeal reads as under:

"1. The order of Ld CIT(A) confirming the addition of EPF of Rs.43,66,585/ and ESI of Rs.8,53,870/- under section 36(1)(va) made by the ITO Ward 1(1), Bhubaneswar in computing the business income of the assessee is arbitrary to law and the facts of the case."

3. The facts of the case are that the Assessing Officer found that the assessee has not deposited an amount of Rs.43,66,585/- towards employees contribution to PF and Rs.8,53,870/- towards employee's contribution to ESI u/s.36(1)(va) of the Act within the prescribed under the respective Act and, therefore, made addition of Rs.52,20,455/- to the income of the assessee.

4. On appeal, the CIT(A) confirmed the action of the Assessing Officer following the decision of Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation, 366 ITR 170(Guj) and the CBDT Circular No.22 of 2015 dated 17.12.2015.

5. Before us, ld A.R. submitted that as the employee's contribution to PF and ESI is deposited in the respective authorities before the due date of filing return of income u/s.139(1), therefore, same deserves to be allowed.

6. Ld D.R. supported the orders of lower authorities.

7. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the Assessing Officer has observed that an amount of Rs.43,66,585/- towards employe's contribution to PF and Rs.8,53,870/- towards employee's contribution to ESI u/s.36(1)(va) of the Act was not deposited within the prescribed due date under the respective Act and, therefore, made addition of Rs.52,20,455/- to the income of the assessee.

8. On appeal, the CIT(A) confirmed the action of the Assessing Officer.

9. On perusal of assessment order at page 1 to 2, we find that the assessee has deposited the employees' contribution to PF and ESI before filing of the return of income u/s.139(1) of the Act. We find that the Hon'ble Supreme Court in the case of Pr. CIT vs Rajasthan Beverage Corporation Ltd., (2017) 84 Taxman. Com 185 (SC), has held as under:

"Section 43B, read with section 36(1)(va), of the Income Tax Act, 1961-Business disallowance-certain deduction to be allowed only on `actual payment (PF & ESI construction)- High Court by the impugned order held that amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va)- Whether SLP against said impugned order was to be dismissed-Held yes (para 2) in favour of assessee.

10. Respectfully following the decision of Hon'ble Supreme Court in the case of Rajasthan Beverage Corporation Ltd., (supra), we delete the addition of Rs.52,20,455/- made by the Assessing Officer and sustained by the CIT(A) and allow this ground of appeal of the assessee.

11. Ground No.2 of appeal reads as under:

"2. The order of the CIT(A) confirming the addition of rent paid amounting to Rs.3,78,000/- without deduction of TDS u/s.40(a)(ia) is not justified and bad in law."

12. The brief facts of the case are that the Assessing Officer found that the assessee has paid an amount of Rs.3,78,000/- to Smt. Sunanda Nayak without deduction of tax at source u/s.194 I of the Act. Therefore, the Assessing Officer disallowed the same u/s.40(a)(ia) of the Act.

13. On appeal, the CIT(A) confirmed the action of the Assessing Officer.

14. Before us, ld A.R. submitted that the amount of R.3,78,000/- paid to Smt. Sunanda Nayak by cheque and, therefore, same should be allowed as deduction.

15. On the other hand, ld D.R. supported the orders of lower authorities.

16. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. We find that the assessee has paid Rs.3,78,000/- to Smt. Sunanda Nayak towards house rent by cheque. If the recipient of the amount Smt. Sunanda Nayak has disclosed has disclosed the amount received from the assessee in her return of income and paid due tax thereon, in view of the decision of Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd., 377 ITR 635 (Del), then, no disallowance in the hands of the assessee is called for. Therefore, we set aside the orders of lower authorities and restore this issue back to the file of the Assessing Officer to verify whether the recipient Smt. Sunanda Nayak has disclosed the amount received from the assessee in her return of income or not. If he finds that the recipient has disclosed the amount in her return of income, then no disallowance should be made. With these directions, the issue is restored back to the file of the Assessing Officer to re-adjudicate the issue. Hence, this ground is allowed for statistical purposes.

17. Ground No.3 of appeal reads as under:

"The order of the CIT(A) confirming the addition of differential amount of receipts as per 26AS and as per profit and loss account amounting to Rs.1,89,971/- is not justified and not correct."

18. The Assessing Officer, on verification of details of the receipts disclosed by the assessee in the accounts with the details of receipts disclosed in 26AS statement, found that receipts to the extent of Rs.1,89,971/- have not been disclosed by the assessee and, therefore, same was treated as undisclosed receipts and added to the income of the assessee.

19. On appeal, the CIT(A) confirmed the

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action of the Assessing Officer on the ground that 26AS statement clearly revealed that the assessee has failed to disclose receipts from certain parties and has also failed to reconcile the discrepancies found in this respect in the 26AS statement. 20. Before us, ld A.R. of the assessee has also failed to reconcile the discrepancies found in 26AS statement. 21. In view of above, we do not find any reason to interfere with the order of the CIT(A) on this ground, which is hereby confirmed and dismiss this ground of appeal. 22. In the result, the appeal filed by the assessee is partly allowed.
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