2017 (11) TMI 389 - HC - Income Tax

High Court upholds Tribunal decision in favor of assessee on various tax issues.

The High Court upheld the Tribunal's decision in favor of the assessee against the department. The issues raised, including the addition of employee ... Addition on depositing the employee’s contribution to PF and ESI beyond the prescribed time limit provided in the respective Acts - Held that:- If the amount has been deposited on or before the due date of filing the return under Section 139 and admittedly it was deposited on or before the due date then the amount cannot be disallowed under Section 43B of the I.T. Act or under Section 36(1)(va) of the Act. See Commissioner of Income Tax, Jaipur-II, Jaipur vs. Jaipur Vidyut Vitran Nigam Ltd. [ 2014 (1) TMI 1085 - RAJASTHAN HIGH COURT ] - Decided in favour of assessee. Addition on account of front end fees paid in HIDSCO for raising the loan holding it to be revenue expenditure - Held that:- The assessee has raised loan of ₹ 300 crores for improvement in transmission, network and infrastructure. The assessee paid this amount to HUDCO, which was pre-decided condition on the loan sanctioned. The learned CIT DR has not controverted the findings by the learned CIT(A) in his order. Further the laws relied upon by the AR for the assessee are squarely applicable on it being identical issue, therefore we uphold the order of the learned CIT(A). Issues Involved:1. Challenge to Tribunal's order confirming CIT(A)'s decision2. Addition of employee's contribution to PF and ESI beyond prescribed time limit3. Payment for technical services not liable for TDS under Section 194J4. Deletion of front end fees paid in HIDSCO as revenue expenditureAnalysis:Issue 1:The appellant challenged the Tribunal's order confirming the CIT(A)'s decision. The High Court framed substantial questions of law, including the addition of employee's contribution to PF and ESI beyond the prescribed time limit, payment for technical services not liable for TDS under Section 194J, and deletion of front end fees paid in HIDSCO as revenue expenditure. The respondent contended that previous decisions supported their position, emphasizing the obligation to deduct TDS for services received. However, the counsel for the appellant argued that the issue was settled by various court decisions favoring the assessee. The High Court upheld the Tribunal's decision, ruling in favor of the assessee and against the department.Issue 2:Regarding the addition of employee's contribution to PF and ESI beyond the prescribed time limit, the High Court analyzed the provisions of Sections 194C and 194J of the Income Tax Act. The respondent argued that the assessee was obligated to deduct TDS for the services received, citing relevant legal provisions. However, the appellant relied on court decisions supporting their position. Ultimately, the High Court found the Tribunal's decision just and proper, upholding it without interference.Issue 3:The issue of payment for technical services not liable for TDS under Section 194J was also considered. The Tribunal upheld the deletion of the addition made on account of transmission/wheeling/SLDC charges to RRVPN, stating that the laws relied upon by the assessee were applicable. The High Court agreed with the Tribunal's decision, finding it just and proper, and ruled in favor of the assessee against the department.Issue 4:Regarding the deletion of front end fees paid in HIDSCO as revenue expenditure, the Tribunal's decision was supported by the High Court. The Tribunal's findings were not controverted, and the laws relied upon by the assessee were deemed applicable. Consequently, the High Court upheld the Tribunal's decision, ruling in favor of the assessee.In conclusion, all issues were decided in favor of the assessee, and the appeal was disposed of accordingly, with issue No.1 being subject to Special Leave Petition (SLP).