M/S. Autolite (India) Ltd., D v. The Assistant Commissioner Of Income Tax, Circle-4, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 3 / 2017 M/s. Autolite (India) Ltd., D-469, Road No. 9A, VKI Area Jaipur ----Appellant Versus The Assistant Commissioner of Income Tax, Circle-4, Jaipur ----Respondent Connected With D.B. Income Tax Appeal No. 5 / 2017 M/s. Autolite (India) Ltd., D-469, Road No. 9A, VKI Area Jaipur ----Appellant Versus The Assistant Commissioner of Income Tax, Circle-4, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Shri Vivek Singhal For Respondent(s) : Shri Prabhansh Sharma and Shri Prateek Kedawat for Shri R.B.Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 06/11/2017 1.By way of these appeals, the appellants have assailedthe judgment and order of the Tribunal whereby the Tribunal hasallowed the appeal of the department and partly allowed theappeal of assessee. 2.This court while admitting the Income Tax Appeals No.3/2017 and 5/2017 on 25.4.2017 framed the followingsubstantial questions of law : “(i) Whether in the facts and circumstances of thecase, the ld. ITAT was justified in upholding the levy of interest on the amount advanced to the sisterconcern? (iv) Whether in the facts and circumstances of thecase, the authorities below were justified in holdingthat the burden is on the assessee to prove thenexus and the same has not been discharged?(vi) Whether in accordance with the provisions ofSection 36, the order passed by the ld. ITAT isjustified or not? 3.Counsel for the appellant has relied upon the decision of this court passed in D.B. Income Tax Appeal No.178/2011 which reads as under : “1. By way of this appeal, the appellant hasassailed the judgment and order of theTribunal whereby Tribunal has partly allowedthe appeal preferred by the department andcross objection of the assessee was alsodismissed. 2. This court while admitting the appeal on22.2.2013 framed following substantialquestion of law:- “Whether in the facts andcircumstances of the case the ITAThas not acted perversly and wasjustified in law in deleting theadditions made by the assessingofficer on account of interest freeadvance given to sister concernwhen the assesee is paying interestof the borrowed amount to thecreditors. Whether in the facts andcircumstances of the case and in lawthe ITAT was justified in confirmingthe decision of CIT(A) of allowingthe delayed payment of employee’scontribution of ESI/PF and applyingthe provisions of Section 43B for it.” 3. Counsel for the appellant has taken us tothe order of AO as well as CIT(A). He contended that transaction involved in theappeal is of huge amount of payment of cash.Therefore, the view taken by the assessingofficer is correct. 9. Mr. Mathur has alsocontended that regarding second issue withregard to ESI and PF, however, the same iscovered by the decision of this Court in thecase of Commissioner of Income Tax Vs. M/sState Bank of Bikaner & Jaipur- D.B. IncomeTax Appeal No.177/2011 decided on06.01.2014 wherein it has been held as under: “Thus, we are of the view thatwhere the PF and/or EPF, CPF, GPFetc., if paid after the due date underrespective Act but before filing of thereturn of income under Section139(1), cannot be disallowed underSection 43B or under Section 36(1)(va) of the IT Act.” 10. However, SLP is pending against theaforesaid decision, therefore, both the partieswill be bound by the decision of the SLP. Hecontended that the same has been followed bythis court in tax appeal no.25/2009 decided on14.2.2017 (Commissioner of Income Tax,Jaipur vs. M/s Manglam Arts), therefore, thisissue is governed by that decision. 11. Counsel for the respondent has supportedthe order of the tribunal. “Thus, we are of the view thatwhere the PF and/or EPF, CPF, GPFetc., if paid after the due date underrespective Act but before filing of thereturn of income under Section139(1), cannot be disallowed underSection 43B or under Section 36(1)(va) of the IT Act.” 10. However, SLP is pending against theaforesaid decision, therefore, both the partieswill be bound by the decision of the SLP. Hecontended that the same has been followed bythis court in tax appeal no.25/2009 decided on14.2.2017 (Commissioner of Income Tax,Jaipur vs. M/s Manglam Arts), therefore, thisissue is governed by that decision. 11. Counsel for the respondent has supportedthe order of the tribunal. 12. We have heard counsel for the parties. 13. Regarding first issue, this court hasalready held that on the date on which amountwas paid to the sister concern, if surplus fundis found, interest free advance given to sisterconcern is not (3 of 3) taxable, therefore, this issued is covered bythe decision of this court and the same isanswered in favour of the assessee. 13.1 Regarding the second issue, it will besubject to decision of SLP as referred above. 14. The issue is answered in favour of theassessee and against the department. The appeal stands dismissed.” 4.Learned counsel for appellant has further relied upon in case of Commissioner of Income Tax-III Vs. Core Health Care Limited, Opponents, 2016-(IT1)-GJX-0267-GUJ, wherein it has been observed :- “6.1 From the above, it is clear that theTribunal has correctly approached the issue whichhas been proposed in the present Tax Appeals.When there was no evidence brought on recordby the Department for the Tribunal to holdotherwise, we hold that the issue is appropriatelyconcluded in favour of the assessee and againstthe Revenue. The Tribunal has rightly relied uponthe decision of the Apex Court in the case ofMunjal Sales Corporation (Supra). It is borne outthat the advances were either for commercialexpediency given to its sister concern or theassessee was having surplus interest free funds.The issue is therefore squarely covered by theaforesaid two decisions.” 5.Counsel for the respondent opposed the same. 6.We are of the considered opinion that the issues are covered by the above decisions. 7.The issues are answered in favour of assessee against department. 8.The appeals are allowed. 9.A copy of this order be placed in other file (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J.