Disposed

Pr. Commissioner of Income Tax v. M/S Rajasthan Renewable Engery Corp. Ltd.

Rajasthan HC6 Aug 2019ITA/49/2019

Case brief

AI extract

What is this about?

The Revenue preferred an appeal against ITAT orders allowing various expenditures including contributions to State Renewal Fund, PF, ESI, and others. The High Court held the appeal is disposed of noting that prior common judgments bind the revenue, though findings on Section 43B interpretations are subject to the Supreme Court's pending ruling.

What the court decided

AI extract

Pr. Commissioner of Income Tax Vs M/S Rajasthan Renewable… — Income Tax | Rajasthan HC (2019)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Income Tax Appeal No. 49/2019

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Pr. Commissioner of Income Tax, Jaipur - II, Jaipur

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----Appellant

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Versus

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M/s Rajasthan Renewable Energy Corp. Ltd., E-166, Yudhister Marg, C-Scheme, Jaipur

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----Respondent

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For Appellant(s) : Shri Prateek Kedawat For Respondent(s) :

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HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE NARENDRA SINGH DHADDHA

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Judgment

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06/08/2019

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This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 urging the following 5 substantial questions of law:

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i) Whether in the facts and circumstances of the case and in law the ITAT was justified in deleting the addition of Rs.20,00,000/- made on account of contribution made to State Renewal Fund ignoring the fact that contribution towards fund is not connected with the business but it is diversion of Income and not allowable u/s.37(1) of the IT Act.

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ii) Whether in the facts and circumstances of the case and in law the ITAT was justified in deleting the addition of Rs.860731/- made for depositing the employees’ contribution to PF & ESI beyond the prescribed time limit provided in the respective Acts.

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iii) Whether in the facts and circumstances of the case and in law the ITAT was justified in holding that

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(2 of 3)

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[ITA-49/2019]

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employees’ contribution to PF and ESI governed by the provision of section 43B and not by section 36(1)(va) r.w.s. 2(24)(x) of the IT Act.

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iv) Whether on the facts and in the circumstances of the case and in law the ITAT is justified in upholding the deletion of disallowance of contribution to Energy Conservation Fund of Rs.10000000/- as made by Assessing Officer ignoring the fact that contribution towards fund is diversion of income and not allowable u/s.37(1) of the Income Tax Act.

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v) Whether on the facts and in the circumstances of the case and in law Hon’ble ITAT was justified in deleting the disallowance of contribution to Rajasthan Bhawan of Rs.1,00,00,000 made by AO as the same was not a business expenditure.”

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So far as question nos.1, 4 and 5 are concerned, they pertain to disallowing the addition and upholding deletion of disallowance of contribution to Energy Conservation Fund. This expense was claimed by the assessee under Section 37(1) of the Act of 1961. It is not in dispute that in respect of previous years, a common judgement dated 2.8.2017 was passed in D.B. Income Tax Appeal No.145/2015, Principal Commissioner of Income Tax vs. M/s. Rajasthan State Industrial Development & Investment Corporation Ltd., wherein this Court has upheld the expenditure, thus the judgement of the ITAT appears to be reasonable and does not call for any interference.

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As regards to the question nos.2 and 3, they are common and identically worded and relates to contribution towards provident fund. It is not in dispute that this Court in Commissioner of Income Tax vs. M/s. State Bank of Bikaner and Jaipur-(2014)

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(3 of 3)

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[ITA-49/2019]

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363 ITR 70 (Raj.) decided on 6.1.2014 binds and covers the dispute against the revenue. However, the learned counsel for the revenue informs that the Special leave to Petition filed by the revenue against the aforesaid judgement is pending before the Supreme Court. Even though these questions with respect to interpretation of Section 43B of the Act were answered against the revenue, but they are subject to the final order of the Supreme Court on these questions.

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The appeal is disposed of, however, with the aforementioned observations.

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(NARENDRA SINGH DHADDHA),J

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(MOHAMMAD RAFIQ),J

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RAVI SHARMA /58

Pr. Commissioner of Income Tax v. M/S Rajasthan Renewable Engery Corp. Ltd.

Case brief

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Pr. Commissioner of Income Tax v. M/S Rajasthan Renewable Engery Corp. Ltd.

Case brief

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