SHRI RAM FIRE WORKS PVT. LTD.,RAJKOT vs. INCOME TAX OFFICER, WARD-2 (1) (4), RAJKOT

This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-2, Rajkot dated 03.08.2018 pertaining to A.Y. 2015-16 and following ground has been taken:

In this case, the ld. A.O. has disallowed the amount of Rs. 3,89,372/- under the provisions of section 36(1)(va) of the act. The A.O. has held that since the payments were paid to the government beyond the due date the same were disallowable. Thereafter in appeal ld. CIT(A) confirmed action of the A.O.

Before us, ld. A.R. fairly conceded that this case is against the assessee the Hon’ble High Court in the matter of GSRTC 366 ITR 170 wherein it is held: "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 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 view of the aforesaid GSRTC case, appeal of the Assessee is dismissed.