MARUDHAR POLYCOT (INDIA) PVT. LTD.,AHMEDABAD vs. THE DY. CIT. CIRCLE-2(1)(2), AHMEDABAD

This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-2, Ahmedabad (in short “the CIT (A)”) dated 08.11.2017 for the Assessment Year 2014-15.

Ground no. 1 to 2 are against the confirmation of disallowance of Rs. 3,98, 789 for late payment of PF and ESIC. 3. The learned counsel for the assessee submitted the CIT (A) has confirmed the disallowance following the judgement of Hon`ble High Court of Gujarat in the case of CIT v. Gujarat State Road Transport Corporation

Au contraire, the ld. DR, submits that the issue is squarely covered against the assessee by Hon’ble jurisdictional High Court’s judgment in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in the case of delayed deposit of employees contribution to PF, the same will not be deductible in computing income under section 28 of the Act.

We have heard the rival submissions and perused the relevant material on record. We find that the issue is squarely covered against the assessee by the decision of Hon’ble Gujarat High Court in the case of CIT v. Gujarat State Road Transport Corporation [2014] 366 ITR 170 (Guj) : 223 Taxman 398 : [2014] 41 taxmann.com 100 (2014) (1) TML 502 -Guj-HC, wherein it was held that section 43B does not apply to employees contribution. Only section 2 (24) (x) read with section 36(1)(va) is applicable and therefore, employees contribution is disallowed if not paid within due dates prescribed under relevant Provident Fund /ESI Act. We are, therefore, of the considered opinion that there is no mistake in the orders of lower authorities in making disallowance in the light of the ratio laid down by the Hon’ble Gujarat High Court in the above case (supra). The law so laid down by the Hon’ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending before the Hon’ble Supreme Court does not dilute the binding nature of this judicial precedent. We, therefore, see no Marudhar Polycot (India) Pvt. Ltd. v. DCIT-2(1)(2) Ahmedabad /I.T.A.No.2868/AHD/2017/A.Y. 14-15 3 legally sustainable merit in the submissions of the assessee and, respectfully following the judgment of Hon’ble jurisdictional High Court in the case of CIT v. Gujarat State Road Transport Corporation [2014] 366 ITR 170 (Guj) : 223 Taxman 398 : [2014] 41 taxmann.com 100 (2014) (1) TML 502 -Guj-HC (supra). In the light of above discussion, the grounds of appeal