TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 1397
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....als u/s.69 of the Act." 2). "Whether the Ld. Commissioner of Income-Tax (Appeals) is right in law and on facts in enhancing the claim of deduction u/s.10B of the Act made by the assessee." 3). On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals) ought to have upheld the order of the Assessing Officer. 4). It is therefore, prayed that theorder of the Ld. Commissioner of Income-Tax (Appeals) may be set-a-side and that of the order of the Assessing Officer be restored." 3. The first issue raised by the Revenue is that Ld.CIT(A) erred in deleting the addition made by the AO for Rs. 1,70,77,868/- and Rs. 69,55,191/- on account of unexplained investment in the purchase of raw materials and inflation of purchases respectively. 4. Briefly stated facts are that the assessee is a limited company and engaged in the manufacturing business of Pharmaceuticals and Fine Chemicals. The AO during the assessment proceeding observed the certain difference between the actual consumption of raw material vis-àvis standard consumption prescribed under the Exim Input-Output Norms (Duty Exemption Schemes) 2002-2008. On the question by the AO about th....
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.... Acceptance of consumption as per books by the Excise Authorities 10. Acceptance of consumption as per books by the Sales Tax VAT authorities 11. Maintenance of Quantitative records by the company 12. Acceptance of consumption as per books by statutory Auditors 13. No such requirement as per Accounting Standards 14. Position of Past Assessments, Appeals and acceptance of our contentions by appellate authorities. In the light of the above discussion, we hereby request you not to make addition to our total income on account of variation in consumption of raw-material." However, the AO disagreed with the submission of the assessee and worked out the value of short consumption of raw material of Rs. 1,70,77,868/- which was treated as an undisclosed investment. Similarly, the AO also worked out excess consumption of raw material of Rs. 69,55,191/- which was treated as inflated purchases made by the assessee. Thus, the AO made the addition of Rs. 2,40,33,059/- to the total income of the assessee for undisclosed investment and inflated purchases. 5. Aggrieved, assessee preferred an appeal to Ld.CIT(A) who has deleted the addition made by the AO. Being aggrieved by the order ....
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.... by following the order of the A.O. for A. Y. 2002-03. The similar addition was also made by the A.O. for A. Y. 2006-07 while deciding of the appellant for that year. The addition have been deleted by me by following the order of the ITAT, Ahmedabad in the case of the appellant for A. Ys. 2002-03, 2003- 04 & 2004-05. Accordingly, the addition made by the A. O. in this year is also directed to be deleted. Therefore, the additions of Rs. 1,43,79,263/-on account of inflation of purchase of raw materials and Rs. 62,63,591/- u/s. 69 of the Act is directed to be deleted. The grounds of appeal are accordingly allowed." 15. We have considered rival submissions and gone through the record. We find dial the Tribunal has discussed this issue from para 4 to 4.1 in the assessment year 2005-06 and in para 9 in assessment year 2006-07. Basically, the Tribunal has followed order passed in the assessment year 2003-04 and 2005-06 on this issue and confirmed the order of the ld.CIT(A). Considering the similarity of the issue, we do not find any error in the order of the ld.CIT(A). This ground of appeal of the Revenue is rejected." 8.1 We further find that the Hon'ble Gujarat High Court in the case....
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....ever, the AO disagreed with the submission of the assessee and treated the impugned loss as capital in nature. Thus, the same was disallowed and added to the total income of the assessee. 11. Aggrieved, assessee preferred an appeal to Ld.CIT(A). The assessee before the Ld.CIT(A) among other arguments has made an alternate claim that even the disallowances are made on account of fluctuation in the foreign currency loan the same will be eligible for deduction u/s 10B of the Act. The Ld.CIT(A) after considering the submission of the assessee deleted the addition made by the AO in part by observing as under: "With regard tofurther submission that lost disallowed should be considered for the purpose of allowing deduction under section 10B, it is seen that assessing officer has objected to admission of this additional ground by citing decision of Supreme Court in CIT vs Goetz India Ltd 157 taxmann 1(SC). 1 am of the view that the additional ground can be admitted in appeal proceedings based on decision of Supreme Court in the case of NTPC Ltd 229 ITR 383 (SC), especially when all the relevant material is already available on record. This ground of appeal is therefore the admitted. Fro....
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....supported the order of authorities below. 16. We have heard the rival contentions and perused the materials available on record. At the outset, we note that the impugned issue has been decided in favor of the assessee by us vide paragraph No.14 of this order in the appeal of the Revenue. 16.1 As the assessee has not advanced any argument in support of his ground of appeal on the reasoning that his case is already covered in its favor by the CBDT Circular as discussed above. Therefore, we are not inclined to adjudicate the issue raised in the CO. by the assessee. Hence, we dismiss the same as infructuous. Now coming to Cross Objection filed by the assessee: 17. The assessee has raised the following grounds of appeal in his Cross Objection: "1. The learned CIT(A) has erred in law and on facts of the case in confirming the action of AO in disallowing Rs. 43,689/- u/s 36(1)(va) r.w.s 2(24)(x) on account of alleged late payment of employees' contribution towards provident fund, ESI, etc. Under the facts and circumstances of the case, no such disallowance is required to be made. 2. The learned CIT(A) has erred in law and on facts of the case in confirming the action of AO in....
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....follows:- "3. Assessee's latter substantive ground challenges correctness of both the lower authorities' action disallowing/adding a sum of Rs. 3,85,810/- u/s. 36(1)(va) r.w.s. 2(24) of the Act on account late payment of employees' contribution to PF & ESI in question. There is no dispute that hon'ble jurisdictional high court's decision in CIT vs. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) upholds such a disallowance in principle. The assessee's case however is that relevant due date has to be seen not from the relevant month of salary but the one pertaining to its payment. He then files a computation chart indicating it to have paid above employees' PF/ESI contributions on 22.05.2009 and 28.05.2009 as against the due dates thereof following on 20.06.2009. The Revenue fails to dispute this factual position. We therefore quote this tribunal's co-ordinate bench decision in Kanoi paper & Industries Ltd. vs. ACIT 75 TTJ 448 that the relevant date in such case is that of month of the actual payment of wages/salaries. We therefore rely on the above co-ordinate bench decision and direct the Assessing Officer to delete the impugned ....
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....ayed in making the payment of employee's contribution of PF/ ESI as specified under the relevant Act. Therefore, the disallowance was made by the AO u/s 36(1)(va) r.w.s. 2(24)(x) of the Act. The Ld. CIT-A subsequently confirmed the view taken by the AO. The Ld. AR before us has not challenged the proposition laid down by the Hon'ble Gujarat High Court in the case of CIT Vs. GSRTC (Supra), wherein it was held as under: "In view of the above and for the reasons stated above, and considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of subclause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees' account in the relevant fund or funds on or before the "due date" mentioned in explanation to section 36(1)(va).Consequently, it is held that the learned tribunal has erred in deleting respective disallowances being employees' contribution to PF Account / ESI Account m....