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TMI Blog2015 (10) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case Ld. CIT(A) grossly erred in confirming the addition of income of Rs. 22515/- on account of interest on FDR. 2. On the facts and circumstances of the case Ld. CIT(A) grossly erred in confirming the addition of Rs. 24757/- on account of job work receipts. 3. On the facts and circumstances of the case Ld. CIT(A) grossly erred in confirming the addition of Rs. 1,37,927/- for late depositing ESI & PF dues." 2.1 Grounds No. 1 and 2 of the assessee's C.O. are not pressed, therefore, the same are dismissed as not pressed. 3. First ground of revenue's appeal is against restricting the addition to Rs. 24,752/- against the addition of Rs. 27,27,293/- made by the Assessing Officer on account of difference in job work receipts. 3.1 The brief facts of the case are that the assessee has derived income from manufacturing and job work of bearing rings. The assessee filed e-return of income declaring total income of Rs. 2,15,45,510/- on 30/09/2009. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act). A show cause notice alongwith notice U/s 142(1) dated 21/12/2011 was issued to the assessee in respect of difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Loss Account 2,77,63,915/- 9. Difference, if any (7-8) 19,597/- M/s TATA Steel Limited S.No. Particulars Amount (In Rs.) 1. Receipts as per form No. 26AS 14,24,097/- 2. Less: Bills pertaining to previous year (F.Y. 2007-08) (Booked by the principal company during the F.Y. 2008-09, hence, appearing in Form No. 26AS of current year) 1,78,804/- 3. Total 12,45,293/- 4. Add: Bills of current year but not accounted for by the deductor, therefore, not appearing in 26AS 78,775/- 5. Total 13,24,068/- 6. Less: Rejections/Debit Notes 6,81,881/- 7. Total residual job work income of the year as per Form No. 26AS 6,42,187/- 8. Job work income as per Book Account 6,37,032/- 9. Difference, if any (7-8) 5,155/- M/s SKF India Limited S.No. Particulars Amount (In Rs.) 1. Receipts as per form No. 26AS 3,96,000/- 2. Less: Bills pertaining to previous year (F.Y. 2007-08) (Booked by the principal company during the F.Y. 2008-09, hence, appearing in Form No. 26AS of current year) 31,137/- 3. Total 3,64,863/- 4. Add: Bills of current year but not accounted for by the deductor, therefore, not appearing in 26AS Nil 5. Total 3,64,863/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ob receipts after making comparison between Form No. 26AS and the amount reported as per P&L account. It is noted that the difference as per Form No. 26AS and the amount reflected in P&L account is on account of bills pertaining to previous year, which have been booked in the current year by the principal company. Secondly, the bills of current year, which have been booked in the subsequent financial year by the principal company and thirdly rejection stock/debit notes, which have been received by the appellant during the year. It is also noted that the assessee has filed detailed reconciliation statement alongwith supporting documentation, which have been duly considered and examined in detail by the ld CIT(A). 6.1 In his order, the ld CIT(A) has held that the difference was worked out by the A.O. by comparing the Form No. 26-AS (Tax Credit Statement) with the job work receipts declared in the books of account. However, many a times, the deductor either did not deduct the tax or accounted for the same in the subsequent year when the goods were lifted from the premises of the appellant company. It was not in dispute that the appellant company was following mercantile system of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to carry out the job work as per prevailing market practice of the industry. The appellant company had maintained complete details of its vendors alongwith the addresses and PAN. The Assessing Officer could have examined the vendors who had not returned the scrap after the job work. However, nothing of that sort was done by the Assessing Officer. Further, the ld CIT(A) has held that the rates of job work were finalized taking into consideration that this scrap generated for the job work was to be retained by the vendors. Accordingly, no adverse inference could have been drawn against the appellant company merely on surmises. There was no real income, which could be taxed in the hands of the appellant on accrual basis or receipt basis. In view of the above facts, the ld CIT(A) deleted the addition of Rs. 1,15,59,814/- made by the Assessing Officer. 7.2 The ld Sr. DR vehemently supported the order of the Assessing Officer and the ld AR for the assessee reiterated the arguments made before the ld CIT(A) and prayed to uphold the order of the ld CIT(A). 7.3 We have given a careful consideration to the facts and the issue under consideration. It is undisputed fact that the scrap genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... write off balance is also not deductable, therefore, the amount of debit note on account of rate difference is not the part of the sale of ER-1 return. Accordingly, total amount of Rs. 1,08,32,435/- is not deductable from ER-1 return to compare the sale of the assessee as declared in the P&L account. 8.2 He further held that in export sale, it has been held that export was made to the sister concern of the SKF India Limited. M/s SKF India Limited is prime party to whom the group of the assessee received the job work. The ER-1 return was taken on itemwise and not as submitted by the assessee for enhancing the rate on subsequently. The ware house and ocean freight charge as claimed by the assessee is not admissible as these expenses are made outside the country, no evidence regarding liability, justification and no evidence that M/s SKF India Ltd has deducted these expenses from the sale proceeds. Therefore, as per Assessing Officer, the amount to Rs. 1,64,20,870/- was declared less sale on account of export sale as per P&L account as compared to the ER-1 return, thus total addition of Rs. 2,72,84,704/- was made by the Assessing Officer. 8.3 Being aggrieved by the order of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14,46,542/-, the major amount of Rs. 13,04,592/- related to the year under consideration and quantification and crystallization of the amounts relating to the past years happened in the year under consideration. All these entries were part of RG-1 Register. Similarly the J.V. No. 232 had been passed by the appellant company on 31/03/2009 on account of short receipt of goods by M/s SKF India Limited, Bangalore. The A.O. did not accept the entire amount of Rs. 2,07,574/- on the ground that concerned invoices did not pertain to the year under consideration. This was factually incorrect as out of total amount of Rs. 2,07,574/-, the major amount of Rs. 79,910/- related to the year under consideration and quantification and crystallization of the amounts relating to the past years happened in the year under consideration. All these entries were part of RG-1 Register. The J.V. No. 233 had been passed by the appellant company on 31/3/2009 on account of short receipt of goods by M/s SKF India Limited, Bangalore. The A.O. did not accept the entire amount of Rs. 22,24,347/- on the ground that concerned invoices did not pertain to the year under consideration. This was factually incorrect as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee at the time of hearing. Therefore, the same may be accepted. 10. We have heard the rival contentions of both the parties and perused the material available on the record. Whatever evidence filed by the appellant before the ld CIT(A) were not forwarded to the Assessing Officer during the appellate proceedings. The assessee filed explanation with evidence before the Assessing Officer on this point but whatever evidences narrated by the ld CIT(A) were not submitted before the Assessing Officer. The ld CIT(A) has coterminous power with the Assessing Officer. However, he has accepted the assessee's explanation without any verification from the third party, therefore, in the interest of justice, this issue required to be decided afresh by the Assessing Officer after providing reasonable opportunity of being heard and assessee also directed to cooperate with the Assessing Officer to produce all the evidences required by the Assessing Officer. Accordingly, this issue is set aside to the Assessing Officer. 11. The third ground of the assessee's C.O. is against confirming the addition of Rs. 1,37,927/- for late depositing ESI and PF dues received from the employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,37,927/- U/s 36(1)(va) made by the Assessing Officer. 13. Now the assessee is in C.O. before us. The ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and further argued that the amount had been deposited before the due date of filing of the return of income. It is a settled law that if the dues were paid before the due date of filing of the return of income, no disallowance could be made. He placed reliance on the decision of Hon'ble ITAT, Jaipur in the case of DCIT Vs. Royal India Jewellery Manufacturing Private Limited in ITA No. 582/JP/2008 dated 13/02/2009. He also placed reliance on the decision of Hon'ble Supreme Court in case of 213 CTR 68 and 220 CTR 635. Therefore, he prayed to delete the impugned addition of Rs. 1,37,927/-. 14. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 15. We have heard the rival contentions of both the parties and perused the material available on the record. The Hon'ble Jurisdictional High Court in the case of CIT Vs. State Bank of Bikaner & Jaipur (2014) 43 taxmann.com 411 (Raj) has held as under:- "20. On perusal of Sec.36(1)(va) and Sec.43(B)(b) and analyzing the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pretext or the other were not being deposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduction but the said amounts were not deposited. It is pertinent to note that the respective Act such as PF etc. also provides that the amounts can be paid later on subject to payment DB ITA-177/2011 DB ITA-189/2011 DB ITA-272/2011 17 of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. Thus, it is viewed that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act." By respectfully following the judgment of the Hon'ble Rajasthan High Court, we delete the addition made by the ld CIT(A). Hence ground No. 3 of the assessee's C.O. is allowed. 16. In the result, the appeal of the revenue as well as C.O. of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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