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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI MAHAVIR PRASAD & SHRI WASSEM AHMED
O R D E R
PER MAHAVIR PRASAD - JM:
This appeal has been preferred by the assessee against the order of Ld. CIT(A)-9/10555/ITO Wd-3(1)(2)/16-17 dated 11.09.2017 arising out of assessment order dated 29.02.2016 and assessee has taken following grounds:
“1. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallowance of Rs. 35,93,362/- made by the Assessing Officer on account of late payment of employees contribution to PF.
Packaging Pvt. Ltd. vs. ITO] A.Y. 2013-14 - 2 -
The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.”
2. In this case assessee is in the business of textile machinery parts. During the course of assessment proceedings it was seen that the assessee has deposited PF and ESI in Government account after the due date prescribed for that. Vide notice dated 28.07.2015 the assessee was asked to explain as to why the same may not be disallowed and added back to the total income u/s. 36(1)(va) r.w.s 2(24)(x) of the I.T. Act. The assessee vide letter dated stated that the same is allowable as per high court decision in the case of CIT vs. Sabari Enterprise, 298 ITR 141. However, the said judgment is in respect of employer’s contribution and not for employee contribution and Ld. AO made an addition of Rs. 35,93,362/- as assessee failed to deposit employees’ contribution to PF and ESI within due date as specified in explanation to Sec. 36(1)(va). Against the order of AO assessee preferred first statutory appeal before the Ld. CIT(A) who confirmed the action of the Ld. AO.
3. We have gone through the relevant record and the impugned order at the time of hearing Ld. Counsel on behalf of the assessee fairly conceded that in view of the jurisdictional High Court order in the matter of CIT vs. Gujarat State Road Transport Corporation [2014] 366 ITR 170 (Guj.):- “Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed on actual payment (Employees contribution) - Whether where an employer has not credited sum received by it as employees' contribution to employees' account in relevant fund on or before due date as prescribed in Explanation to section 36(1)(va), assessee shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of Packaging Pvt. Ltd. vs. ITO] A.Y. 2013-14 - 3 -
return under section 139(1) - Held, yes - Assessee State transport corporation collected a sum being provident fund contribution from its employees - However, it had deposited lesser sum in provident fund account - Assessing Officer disallowed same under section 43B - However, Commissioner (Appeals) deleted disallowance on ground that employees contribution was deposited before filing return - Whether since assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper - Held, yes [Para 8] [In favour of revenue]”
In that view this matter is against the assessee. We agree with the findings of the lower authorities and we affirm opinion of the lower authorities that this matter is squarely covered by the jurisdictional High Court judgment in the case of CIT vs. GSRTC (supra). Thus, we dismiss the appeal of the assessee.
In the result, appeal filed by the assessee dismissed.
This Order pronounced in Open Court on 18/11/2019
Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 18/11/2019 TANMAY TRUE COPY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।