24/7 CUSTOMER PRIVATE LTD,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, BANGALORE

At the outset, Ld. AR has letter dated 04/11/2019 by Ministry of Finance, Department of Revenue, CBDT, pursuant to which assessee wishes to withdraw assessee’s appeal filed for year under consideration. The said letter is regarding mutual agreement procedure reached between United States competent authority and Indian competent authority, with regard to transfer pricing adjustment in respect of international transactions, related to ITeS segment for year under consideration. 2.1. Ld. CIT DR do not object for the same.

Considering the submissions made by assessee in its letter dated 04/11/2019 by Ministry of Finance, Department of Revenue, CBDT filed before this Tribunal on, we allow withdrawal of present appeal. Accordingly, grounds raised

Ground No. 2 in revenue’s appeal is regarding disallowance deleted pertaining to belated remittances of EPF/ESI. 9.1. Ld. DR submitted that Ld. AO erred in not disallowing delayed remittance of employee’s contribution of PF and ESI. He submitted that any delay in remittance of employee’s contribution are to be treated as income in the hands of assessee in terms of provisions of section 2 (24) (x) read with section 36 (1) (va) of the Act. On the contrary, Ld. AR submitted that, assessee delayed remittance of PF for the month of January by 6 days and ESI for the month of January and February by 33 days and 5 days respectively. He submitted that as per 36 (i) (va) if employee contribution is remitted before the specified due date for filing of return under section 139 (1), the same is an allowable expenditure. He placed reliance upon decision of Hon’ble Karnataka High Court in case of CIT vs Sarabai Enterprises reported in 298 ITR 141 and Spectrum Consultants India Pvt Ltd., reported in (2013) 34 Taxmann.com 20.

We have perused submissions advanced by both sides in light of records placed before us. Ld. AR has submitted that both sections 36 (1) (va) and section 43B allows such payment to be considered as expenses, if they are made before the due date for filing return of income during relevant year. We therefore set aside this issue to Ld.AO for verification in accordance with the ratio laid Page 5 of 5 IT(TP)A 689/Bang/2016 & IT(TP)A 591/Bang/2016 A. Y : 2011 – 12 down by Hon’ble jurisdictional High Court in case of CIT vs Sarabai Enterprises and Spectrum Consultants India Pvt Ltd (supra). Accordingly, this ground raised by revenue stands allowed for statistical purposes. In the result, appeal filed by assessee stands dismissed as withdrawn in respect of transfer pricing issues. In respect of corporate grounds raised by assessee the ground stands allowed. Insofar as corporate grounds raised by revenue in their appeal, they are partly allowed for statistical purposes.