Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 744 - ITAT JAIPUR

2015 (10) TMI 744 - ITAT JAIPUR - TMI - Difference in job work receipts - comparison between Form No. 26AS and the amount reported as per P&L account - CIT(A) restricted part addition - Held that:- 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

company. It was not in dispute that the appellant company was following mercantile system of accounting and job receipts were accounted for in the books of account on accrual basis. The appellant company therefore declared the job receipts in the year of billing however the deductor/principal company accounted for part of job receipts in the subsequent year when the goods were removed from the premises of the appellant company. The mercantile system of accounting was consistently followed by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t for the same appeared in Form No. 26-AS. - Decided against revenue.

Addition on concealed sale of scrap on the basis of ER-1 return filed with the Excise Department - CIT(A) deleted the addition - Held that:- It is undisputed fact that the scrap generated out of manufacturing was retained by the vendors and not returned back to the appellant company. The assessee company had paid excise duty on nonreturnable scrap retained by the vendors by taking its notional value or assessable va .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot. As per agreement made between the appellant and the vendors, the scrap is to be remained with the vendor and it could not be returned back to the appellant as per the terms and conditions of job work charges. The vendor is also assessed to tax and both the parties i.e. the appellant as well as the vendor are also under the excise net. Thus, we do not find any reason to intervene in the order of the ld CIT(A) - Decided against revenue.

Addition on account of concealed sales being .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee - ITA No. 853/JP/2012, CO No. 76/JP/2012 - Dated:- 10-9-2015 - R P Tolani, JM And T R Meena, AM For the Petitioner : Smt Pratima Kaushik (CIT) For the Respondent : Shri Abhinav Mehrotra (Adv) ORDER Per T R Meena, A.M. The appeal by revenue and cross objection by assessee arise from the order dated 06/08/2012 passed by the learned CIT (A)-II, Jaipur for A.Y. 2009-10. 2. The ground of revenue's appeal and ground of the assessee's C.O. are as under:- Grounds in Revenue's Appeal. &quo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

;1. On the facts and circumstances of the case Ld. CIT(A) grossly erred in confirming the addition of income of ₹ 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 ₹ 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 ₹ 1,37,927/- for late depositing ESI & PF dues." 2.1 Grounds No. 1 and 2 of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

77; 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 in job work receipts amounting to ₹ 27,27,293/-. 3.2 The ld Assessing Officer observed that for job receipts in case of M/s Fag Bearing India Ltd., in comparison to statement appearing 26AS, the assessee has declared the less amount of receipt o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

refore, it is clear that the assessee company has concealed the receipts of ₹ 7,87,065 and the same is added back in the income of the assessee. In case of SKF, the ld Assessing Officer observed that the assessee has declared the less receipt of ₹ 31,137/- and he has not been filed any explanation therefore the said amount is added back in the income of the assessee. In light of above findings/observations, the ld Assessing Officer held that the assessee has concealed the receipt of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s per form No. 26AS 2,31,75,057/- 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) 46,99,182/- 3. Total 2,84,75,875/- 4. Add: Bills of current year but not accounted for by the deductor, therefore, not appearing in 26AS (Booked by the principal company during the F.Y. 2009-10 hence, not appearing in Form No. 26AS of current year) 11,97,130/- 5. Total 2,96,73,005/- 6. Less: Reject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

held that the Assessing Officer without any basis rejected the submissions of the appellant company and at the same time, he ignored the entries in the books of account and copies of debit notes/rejections. In the case of M/s Fag Bearing India Ltd., the Assessing Officer accepted the contention of the appellant company that job work receipts of ₹ 46,99,182/- appearing in Form No. 26AS were accounted in the books of account for F.Y. 2007-08, however, similar contention for job work receipts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not accept the contention of the appellant company that job work receipts of ₹ 78,775/-declared by the appellant company in the books of account for the current year did not appear in Form 26-AS and he also did not accept the debit notes and rejections of ₹ 6,81,881/-. The ld CIT(A) further held that the appellant has satisfactorily explained the difference in job work receipts with the necessary documentary evidences. However, there was a minor difference of ₹ 19,597/- in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the rival contentions of both the parties and perused the material available on record. It is noted that the Assessing Officer had made addition of ₹ 27,27,293/- on account of difference in job 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 accounting and job receipts were accounted for in the books of account on accrual basis. The appe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re was strictly in conformity with the applicable AS-1 issued by ICAI and GAAP also. Many a times, the job work receipts accounted by the appellant in one year were accounted for in the subsequent year by the principal company. As a result, TDS was also deducted by the principal company in that year and credit for the same appeared in Form No. 26-AS. 6.2 We have given out considered thought and agree with the reasoning of ld. CIT(A) and we find no infirmity in the order of the ld CIT(A). Hence w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ith the appellant. At the same time under the relevant provisions of the Excise law, it was for the appellant company to pay the excise duty on the said scrap which has been generated at the vendor s premises. It was also submitted by the appellant that the scrap has not been received back physically in the factory premises of the appellant. 7.1 As per the ld CIT(A), the appellant company had satisfactorily explained that it had paid excise duty on the notional value of scrap shown in the ER-1 r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ap generated out of manufacturing was retained by the vendors and not returned back to the appellant company. The assessee company had paid excise duty on nonreturnable scrap retained by the vendors by taking its notional value or assessable value by the Excise authorities. ER-1 return not only include the goods sold but also goods removed out of factor. Therefore, it is but natural to have difference between sale figures reported by the assessee and figures disclosed in ER-1 return. The ld CIT( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the parties i.e. the appellant as well as the vendor are also under the excise net. Thus, we do not find any reason to intervene in the order of the ld CIT(A), accordingly we uphold the order of the ld CIT(A). Hence, this ground of revenue is dismissed. 8. In the third ground of the revenue's appeal, the department has challenged the deletion of addition of ₹ 2,72,84,704/- on account of concealed sales being the difference in figures of sale as per P&L account and that declared in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fore, the same are not deductable from the sales of the year. With regard to interstate 2% had been considered. The Assessing Officer held that sales of machinery and plants is not deductable on account of sales of goods to compare the sales as declared in ER-1. The sales not pertaining to year under consideration, also not deductable in the sales made during the year to compare the sales as declared in ER-1. Similarly write off balance is also not deductable, therefore, the amount of debit note .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 ₹ 1,64,20,870/- was declared less sale on account of export sale as per P&L account as compared to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant company, however, received memo from M/s SKF India Limited for short quantity receipt against different bills pertaining to A.Y. 2007-08, 2008-09 and 2009-10 for ₹ 18,21,421/-. The assessee passed reversed only to the tune of ₹ 3,34,997/- for A.Y. 2009-10 and reduced from the sale. Rate difference bill for HSS rate difference to M/s SKF India Limited for ₹ 2,16,703/-, which was not accepted by M/s SKF India Ltd, which was also reduced from the sale. A further rate differenc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

imited, Bangalore against various bills for total amount of ₹ 1,68,823/-. The A.O. did not accept the claim of ₹ 1,68,823/- made by the appellant company. Since the appellant company had received lesser amount against some bills therefore it had rightly reduced the amount from its receipts. Without prejudice to the above, the amount could have been claimed as bad debit alternatively. The A.O. had disallowed the same for the reason that the expenditure did not relate to the year under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der consideration. This was factually incorrect as out of total amount of ₹ 14,46,542/-, the major amount of ₹ 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. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssed 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 ₹ 22,24,347/- on the ground that concerned invoices did not pertain to the year under consideration. This was factually incorrect as the total amount of ₹ 22,24,347/- related to the year under consideration and quantification and crystallization of the amount happened in the year under consideration. All these entries were p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

79/- and ₹ 68,45,523/- on the assumption that liability of payment of wharehousing ocean freight charges was not of the assessee but of the buyer. However, both of these reversals had been made by the appellant company vide J.V. No. 50 dated 20/11/2008 and JV No. 169 dated 31/03/2009 for ₹ 56,57,279/- and 68,45,523/- respectively. The A.O. alleged that the receipt of the lesser payment did not justify the claim of the assessee that the above deduction was made by the party to whom th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or US $ 1,17,835/-. The fact of payment made by the appellant company in itself made the deduction of the amount being eligible to it. It was obvious that the addition made by A.O. was without any material and any basis. As far as the question of some part relating to past year was concerned, the quantification and crystallization happened in F.Y. 2008-09 only when the appellant company received the invoices of difference from the buyer company." 9. Now the revenue is in appeal before us. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o 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 As .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment, it was observed that the assessee had made late payment of ESI in all its units, the details of which is reproduced at page No. 11 to 13 of the assessment order. As per Section 2(24)(x) read with Section 36(va), the payments of ESI and PF made late by the employer are considered as his income for the relevant year. Therefore, the amount of ₹ 1,37,927/- deposited late of ESI and PF were added to the income of the assessee considering as his income of the year. 12. Being aggrieved by t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such employees' is to be included in the income of the assessee. Further, as per provisions of Section 36(1)(va) of the Income Tax Act, any sum received by the assessee from any of his employees to which the provisions of section 2(24)(x) apply, shall be deducted as expenditure, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. The "due date" as defined in the explanation given under Section 36(1)(va), me .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

U/s 36(1)(va). The provisions of Section 43B(b) are applicable only in respect of employer's contribution to PF or ESI and not to the employee's contribution. This view is supported by the decision of Hon'ble Pune Tribunal in the case of Indian Card Clothing Company Ltd. (ITA No. 214/PN/98). Therefore, he confirmed the addition of ₹ 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 ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on'ble Supreme Court in case of 213 CTR 68 and 220 CTR 635. Therefore, he prayed to delete the impugned addition of ₹ 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 per .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

asis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. Vs. CIT (1997) 224 ITR 677. 21. A conjoint reading of the proviso to Section 43-B which was inserted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under Section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that Sec.43B starts with a notwithstanding clause & would thus override Sec.36(1) (va) and if read in isolation Sec. 43B would become obsolete. Accordingly, contention of counsel for the revenue is not tenable fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version