VRC CONSTRUCTIONS INDIA PRIVATE LIMITED,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 5. DELHI, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.3540/Del/2026 (Assessment Year : 2013-14) VRC Constructions India Pvt. Vs. Assistant Commissioner of Ltd. Income Tax Plot No.16, VRC Tower, Central Circle – 5 Paschim Vihar, Rohtak Raod Delhi Delhi – 110 063 PAN No. AAACV 2339 J (APPELLANT) (RESPONDENT) Assessee by Shri Suresh Gupta, C.A. Revenue by Shri Balkrishan Gopal, Sr. D.R. Date of hearing: 12.08.2026 Date of Pronouncement: 12.08.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-24, New Delhi [‘CIT(A)’ in short] dated 04.12.2025 arising from the assessment order dated 12.02.2016 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the Assessing Officer, DCIT, Circle 26(1), New Delhi for the A.Y. 2013-14.

ITA No. 3540/DEL/2026 [A.Y 2013-14] M/s. VRC Constructions India Pvt. Ltd. vs. ACIT 2. The following grounds raised by the assessee, which reads as under: 1. “The Ld CIT(A) has erred both in law and in facts of the case in upholding the addition of Rs.10,43,978/- u/s 14A rwr 8D ignoring the fact that there is no exempt income and therefore, no disallowance can be made in above provision. 2. The Ld CIT(A) has erred both in law and in facts of the case in upholding the addition of Rs.8,19,424/- u/s 2(24)(x) of the Act ignoring the fact that the said payment made under Employees Provident Fund Act has been made within due date and therefore, no addition can be made under above provision. 3. The Ld CIT(A) has erred both in law and in facts of the case in upholding the addition of Rs.21,51,637/-on account of ad-hoc disallowance at the rate of 15 percent ignoring the fact that the no trading addition can be made without rejecting the books of account and the appellant denies of making any agreement on making such disallowance. 4. The appellant craves leave to add, Delete, modify amend the above grounds of appeal with the permission of the Hon’ble R appellate authority.”

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ITA No. 3540/DEL/2026 [A.Y 2013-14] M/s. VRC Constructions India Pvt. Ltd. vs. ACIT Rs.15,71,56,812/- after making various additions/disallowances aggregating Rs.89,94,332/- to the returned income. 4. Aggrieved assessee was in appeal before the ld. CIT(A), the ld. CIT(A) dismissed the appeal of the assessee by observing as under: “5.4.2 On perusal of the assessment order and tax audit report, it is undisputed that employee contribution to PF was deposited after the due dates prescribed under the respective statute for most months. The Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. vs. CIT (Civil Appeal No. 2833/2016) has conclusively held that employees contribution deposited after the due date under respective welfare legislation is not allowable, even if paid before filing of return u/s 139(1). After this judgment, there remains no scope to allow such delayed contributions. 5.4.3 Regarding the appellant's claim for February 2013, even though the cheque was tendered on 20.03.2013, the cheque was cleared on 21.03.2013. Under the EPF Scheme, payment is considered made only when the amount is actually credited to the government account. The appellant has not produced any PF authority confirmation or other evidence to prove that the date of tendering the cheque is treated as the date of deposit under the specific PF law. The reliance on an old CBDT circular and treasury rules cannot override the statutory mandate and the Supreme Court judgment. 5.4.4 Therefore, the AO's disallowance of Rs. 57,98,717/- is in accordance with law and requires no modification. Hence, Ground No. 3 stands DISMISSED.” 5. Being aggrieved by the order of ld. CIT(A), the assessee is now in appeal before us. 6. Before us, learned Counsel for the assessee stated that there is no exempt income, however, the AO has made disallowance under section 14A r.w.s 8D of the Act. On the issue of disallowance under section 36(1)(va) of the Act for delay of deposit of EPF, the ld. Counsel states that the date of the tender of cheque is before the due date

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ITA No. 3540/DEL/2026 [A.Y 2013-14] M/s. VRC Constructions India Pvt. Ltd. vs. ACIT which may be examined before disallowing the amount. On the third issue; the ld. Counsel for the assessee stated that the disallowance is made on ad hoc basis on various expenses of Rs.21,51,637/- @ 15% without rejecting the books of accounts. 7. Per contra, ld. DR relied on the order of the AO/CIT(A). 8. We have heard the rival submissions and perused the material available on record. On the first issue of disallowance of Rs.10,43,978/- under section 14A r.w.s 8D of the Act, we find that there is no exempt income declared by the assessee in its computation of income. Following the Hon’ble Delhi High Court’s decision in the cases of Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (Delhi); PCIT v. IL & FS Energy Development Co. Ltd. (2017) 84 taxmann.com 186 (Delhi); PCIT v. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Delhi); 2022 which held that section 14A cannot be invoked where no exempt income was received or receivable during the relevant previous year and that the amendment to section 14A vide the Finance Act, 2022 applies from AY 2022-23 onward and cannot be presumed retrospective merely because it uses 'for removal of doubts' language. Therefore, no disallowance is required to be made under section 14A of the Act. Ground No.1 is allowed.

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ITA No. 3540/DEL/2026 [A.Y 2013-14] M/s. VRC Constructions India Pvt. Ltd. vs. ACIT 9. The second issue is with regard to the EPF (Employees’ Contribution). We are of the considered view that the matter may be set aside to AO to examine whether the cheque was tendered on 23.02.2013 before the due date, as prescribed under the respective Act of PF and ESI. In the event the cheque is tendered on 23.02.2013, within the due date as provided in the relevant respective Act, the same may be allowed. We also find that this issue of disallowance is limited to a contribution made in Feb, 2013 of Rs.19,424/- only, otherwise the assessee has accepted the disallowance of balance amount In view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. vs. CIT (2022) 448 ITR 518 (SC). This ground is allowed for statistical purposes. 10. The third issue is with regard to the ad hoc disallowance of Rs.21,51,637/-; we are of the view that neither the Revenue nor the assessee has been able to completely justified the expenses or disallowance of the expenses respectively. In such facts, without creating the precedent, we in the interest of natural justice, hold that 2% of the said expense be considered as not for the purposes of business. Ground of the assessee is partly allowed.

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ITA No. 3540/DEL/2026 [A.Y 2013-14] M/s. VRC Constructions India Pvt. Ltd. vs. ACIT 11. In the result, appeal filed by the assessee in ITA No.3540/Del/2026 is partly allowed. Order pronounced in the open court on 12.08.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 07.09.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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