DEPUTY COMMISSIONER OF INCOME TAX- 5(1), INDORE, INDORE vs. M/S THIRDEYE SECURITY SERVICES PVT.LTD. , INDORE

आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER

ITA No.609& 610/Ind/2017 Assessment Years: 2013-14 & 2014-15

DCIT-5(1), M/s. Thirdeye Security Services, Pvt. Indore बनाम/ Ltd. LG 21,BCM Height PU, 4, A5, Vs. Scheme No.54, Vijay Nagar, Indore (Revenue) (Respondent) P.A. AACCT3827H Revenue by Shri Yogeesh Mishra Sr. DR Respondent by Shri Anil Kamal Garg & Arpit Gaur, CAs Date of Hearing: 17.10.2018 Date of Pronouncement: 23 .10.2018 आदेश / O R D E R PER MANISH BORAD, A.M: These two appeal at the instance of Revenue pertaining to A.Ys. 2013-14 & 2014-15 are directed against the order of Ld. Commissioner of Income Tax(Appeals)-II, Indore, (in short ‘CIT(A)’), dated 27.06.2017 which is arising out of the order u/s 143(3) of the Income Tax Act

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1961(hereinafter called as the ‘Act’) framed on 11.03.2016 by ACIT-5(1), Indore. 2. In both the appeals, the only issue raised by the revenue relates to the deletion of addition by the Ld. CIT(A) which was made by the Assessing Officer on account of delay in payment of Employees contribution to PF & ESIC at Rs.1,18,38,293/- and Rs.1,77,30,759/- relating to A.Ys. 2013-14 & 2014-15 respectively, as the alleged employee’s contribution was not paid before the due date of payments as required under the provisions of section 36(1)(va) read with section 2(24) (x) of the I. T. Act 1961. 3. As issues raised in both these appeals are common and they relates to same assessee, these were heard together and are being disposed of by this common order for the sake of convenience and brevity. 4. Brief facts relating to issues raised in both these appeals, as culled out from the records are that the assessee is a Private Limited Company engaged in the business of providing security consultancy and manpower supply services. The case for both assessment years i.e. A.Ys. 2013-14 & 2014-15 were selected for scrutiny, necessary notices u/s 143(2) and 142(1) of the Act served upon the assessee. For both the years Ld. Assessing officer 2

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examined the details of amount deducted and deposited as employee’s contribution towards PF and ESIC under the provisions of section 36(1)(va) of the I.T. Act, 1961. It was commonly observed that a sum of Rs.1,18,38,293/- and Rs.1,77,30,759/- relevant to A.Ys. 2013-14 & 2014-15 were deposited after the due date as provided under the explanation of proviso u/s 36(1)((va) of the Act i.e. the due date prescribed under the PF and ESIC laws. Both the amounts were disallowed and added to income of the assessee, by the Ld. Assessing Officer even when during the assessment proceedings itself the assessee submitted necessary proof to show that the impugned amounts were paid before the due date of filing of return of income u/s 139(1) of the Act.

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was called for if the alleged amount is deposited before the due date of filing of return of income u/s 139(1) of the Act. 6. Now the assessee is in appeal before the Tribunal for both the assessment years. The Ld. Departmental Representative(DR) vehemently argued supporting the orders of the Assessing Officer and also referred to the circular issued by the Central Board of Direct Taxes bearing No.22/2015 dated 17.12.2015 mentioning that the employee’s contribution towards PF/ESIC can be allowed only if they are paid within the due date as provided in the explanation to section 36(1)(va) of the Act and not before the due date of filing of return of income. 7. Per contra Ld. counsel for the assessee referred and relied on the finding of Ld. CIT(A). 8. We have heard the rival contentions and perused the material available on record placed before us. The common issue raised in both these two appeals relates to the disallowance of employee’s contribution towards PF & ESIC at Rs.1,18,38,293/- and Rs.1,77,30,759/- for A.Ys. 2013- 14 & 2014-15 respectively. First undisputed fact is that the alleged amount which is the total of monthly amount paid for each financial year 4

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towards PF & ESIC is regularly paid by the assessee for each month and the actual date of payment is after the due date of payments as prescribed under the relevant statutory laws applicable for PF & ESIC. Second undisputed fact is that the alleged amounts have been paid to the government treasury under the PF & ESIC before the due date for filing of the return of income u/s 139(1) of the Act applicable to the category of assessee. 9. Now the only issue to be adjudicated is “whether in the impugned amount of employee’s contribution for PF & ESIC can be claimed as a business expenditure for the relevant assessment years” in the light of the fact that the amount has been paid after the due date prescribed for each month under the relevant laws for PF & ESIC but paid before the due date of filing of the return of income u/s 139(1) of the Act. 10. We observe that Hon'ble Rajasthan High Court in the case of Pr. CIT vs. Rajasthan State Beverages Corpn. Ltd. 84 taxmann.com 173 (20017) held that “if the amount claimed on payment of PF & ESIC contribution by employer having been deposited on or before the due date of filing of returns of income, same could not disallowed u/s 43B r.w.s 36(1)(va) of the Act.” 5

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36(1)(va) is to be read along with section 43B of the Act and section 43B of the Act being a section starting with the phrase “notwithstanding anything contained in any other provision of this Act,” has to be given an edge over explanation to section 36(1)(va) of the Act and the due date is to be construed as the due date for filing the return of income u/s 139(1) of the Act. Accordingly, both the impugned amounts at Rs. Rs.1,18,38,293/- and Rs.1,77,30,759/- relevant to A.Ys. 2013-14 & 2014-15 respectively, being the amount towards employee’s contribution to PF & ESIC each to be allowed as business expenditure. Therefore, no interference is called for in the finding of Ld. CIT(A). Both the appeals of the Revenue are stand dismissed. 14. In the result, both the appeals of the revenue are dismissed.

Order was pronounced in the open court on 23 .10.2018.

Sd/- Sd/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore; �दनांक Dated : 23/10/2018 ctàxÄ? P.S/.�न.स.

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Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar