Principal Commissioner Of Incometax, Central-2, Kolkata v. M/S. Rei Agro Limited

OD-26 ITAT/416/2017 IA No.GA/2/2017 (Old No. GA/3804/2017) IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX, CENTRAL-2, KOLKATA -Versus- M/S. REI AGRO LIMITED Appearance:Mr. Debasish Chaudhuri, Adv....for the appellant. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 7[th] March, 2022. The Court : This appeal filed by the revenue underSection 260A of the Income Tax, 1961 (the ‘Act’ in brevity) isdirected against the order dated 31[st] March, 2017 passed by theIncome Tax Appellate Tribunal, “C” Bench, Kolkata (in short the‘Tribunal’) in ITA Nos.152 and 153/Kol/2014 for the assessmentyears 2010-11 and 2011-12. The revenue has raised the following substantial question of law for consideration: i)Whether on the facts and in the circumstances ofthe case the Learned Income Tax AppellateTribunal, “C” Bench, Kolkata has erred in law in deleting the addition made by the AssessingOfficer under Section 36(1)(va) read with Section2(24)(x) of the Income Tax Act, 1961 on account ofdelayed deposit of employees’contribution towardsPF/ESI without considering CBDT’s Circular No.22of 2015 dated December 17, 2015 ? ii)Whether on the facts and in the circumstances ofthe case the Learned Income Tax AppellateTribunal, “C” Bench, Kolkata has erred in law inholding that the disallowances under Section 14Aof the Income Tax Act, 1961 read with Rule 8D ofthe Income Tax Rules, 1962 is to be in relating tothe income which does not form a part of the totalincome and this can be done only by taking intoconsideration the investment which has given riseto this income which does not form part of thetotal income while as per Rule 8D, thoseinvestments are also to be taken income from whichshall not form part of the total income ? We have heard Mr. Debasish Chaudhuri, learned standingcounsel appearing for the appellant/revenue. The second substantial question of law framed forconsideration is with regard to disallowance under Section 14Aof the Act read with Rule 8D of the Income Tax Rules, 1962. Wehave perused the order passed by the tribunal which affirmed theorder passed by the Commissioner of Income Tax (Appeals)Central-II, Kolkata [CIT(A)]. Identical issue arose in theassessee’s own case for the assessment year 2008-09 which wasdecided in favour of the assessee by the CIT(A) and confirmed bythe tribunal. The revenue preferred appeal before this Court and the appeal has been dismissed by judgment dated 9[th] April,2014. Thus, applying the decision of this Court, the saidissue was decided against the revenue and in favour of theassessee, we find no ground to take a different view in thematter as the said issue has already been decided in favour ofthe assessee in the assessee’s own case for earlier assessmentyears. Accordingly, substantial question of law no.2 isrejected. So far as the first substantial question of law isconcerned, we note that identical issue has been entertained bythis Court in other appeals filed by the revenue and appealshave been admitted as well. However, in the instant case, wefind the tax liability in so far as the disallowance of paymentof Provident Fund and ESI is far below the threshold limit inboth the assessment years which would prevent theappellant/Department from pursuing this appeal. However, takingnote of the fact that similar substantial question of law hasalready been admitted in other cases, we leave this question oflaw open to be decided in an appropriate case. In the result, the appeal filed by the revenue isdismissed. Substantial question of law no.2 is answered againstthe revenue and substantial question of law no.1 is left open aswe have dismissed the appeal against the revenue on the saidissue on the ground of low tax effect. Consequently, the connected application for stay beingIA No.GA/2/2017 (Old No.GA/3804/2017) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) As/RS