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Income Tax Appellate Tribunal, “SMC” BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG
This appeal has been filed by the assessee against the order of CIT(A)-1, Bhubaneswar, dated 04.06.2018 in First Appeal No.0107/17-18, for the assessment year 2015-2016. 2. The sole issue in this appeal agitated by the assessee is that the claim of contribution towards EPF and ESI of Rs.3,21,916/- should be allowed to the assessee as the same was paid and deposited within the same financial year and before the due date of filing of return.
I have heard the arguments of both the sides and clearly perused the relevant material placed on the record of the Tribunal.
Ld. AR submitted that the AO and ld. CIT(A) have followed the decision of Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat
2 State Road Transport Corporation, reported as 366 ITR 170 (Guj),
whereas the judgment of Hon’ble Rajasthan High Court in the case of Pr. assessee u/s.43B or u/s.36(1)(va) of the Income Tax Act, 1961 (for short, ‘the Act’).
Replying to the above, ld. DR strongly supported the orders of authorities below and submitted that the decision of the Hon’ble Gujarat
High Court in the case of Gujarat State Road Transport Corporation
(supra) has rightly been followed by the AO as well as by the ld. CIT(A).
On careful consideration of the above rival submissions and respectfully perusal of the decision of the Hon’ble Gujarat High Court and the decision of Hon’ble Rajasthan High Court, I am of the view that both
the Hon’ble High Courts have taken contrary view on the issue of allowability of ESI and EPF payments made beyond the prescribed date
but before the due date of filing of the return. However, the judgment of Hon’ble Rajasthan High Court in the case of Rajasthan State Beverages
Corporation Ltd. (supra) has been upheld by the Hon’ble Supreme Court
dismissing the SLP of the department. Therefore, the issue has now been settled by the Hon’ble Supreme Court in the above case that the amount claimed on payment of PF and ESI having been deposited on or before
due date of filing of returns, could not be disallowed u/s.43B or u/s.
3 36(1)(va) of the Act. The observations of the Hon’ble Supreme Court in the case of Pr. CIT Vs. Rajasthan State Beverages Corporation Ltd., [2017] 84 taxmann.com 185 (SC), are as under :- “ Section 43B, read with section 36(1)(va), of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment (PF and ESI contribution) - High Court by impugned order held that amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va) - Whether SLP against said impugned order was to be dismissed - Held, yes [Para 2] [In favour of assessee]”
In the present case, neither the AO nor the ld. CIT(A) has disputed the fact that the assessee has deposited the impugned amounts of ESI & EPF before due date of filing of return u/s.139(1) of the Act. Therefore, the ratio of the decision of the Hon’ble Supreme Court in the case of Rajasthan State Beverages Corporation Ltd (supra), supports the stand and legal plea of the assessee and respectfully following the same, I direct the AO to allow the claim of the assessee regarding EPF contribution of Rs.2,36,145/- & ESI contribution of Rs.85,771/-, totaling to Rs.3,21,916/-. Accordingly, the sole issue/ground of appeal of the assessee is allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 06/02/2019. (CHANDRA MOHAN GARG) "या"यक सद"य / JUDICIAL MEMBER कटक Cuttack; "दनांक Dated 06/02/2019 ".कु."म/PKM, Senior Private Secretary
4 आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : अपीलाथ" / The Appellant-
M/s Institute of Gastro & Kidney Care (P) Ltd., Plot No.155, Sahid Nagar, Bhubaneswar- 751007, Odisha ""यथ" / The Respondent-
DCIT, Corporate Circle-1(1), Bhubaneswar आयकर आयु"त(अपील) / The CIT(A), 3. आयकर आयु"त / CIT
"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, कटक / DR, ITAT, Cuttack 5. गाड" फाईल / Guard file. 6. स"या"पत ""त //// आदेशानुसार/ BY ORDER,
(Senior Private Secretary) आयकर अपील"य अ"धकरण, कटक / ITAT, Cuttack