BLISS TREE INFRACON PVT. LTD.,DELHI vs. ACIT, CIRCLE- 5(1), NEW DELHI

The assessee is aggrieved against the non admission of additional evidence by the learned CIT(A) in support of payment of commission to parties, for which the addition was made.

Briefly stated the facts of the case are that the assessee claimed payment of commission amounting to Rs. 10,65,638/-. The AO disallowed the same. The assessee requested the learned CIT(A) to admit additional evidence in support of the payment of such commission which the learned CIT(A) refused to do. Without going into the merits of addition, I consider it expedient to set aside the impugned order on this score and remit the matter to the file of the learned CIT(A) with a direction to admit the additional evidence which the assessee proposes to file before him in support of genuineness of commission of payment and thereafter decide the issue as per law.

The other ground in this appeal is against the confirmation of disallowance of Rs. 53,451/- for delayed deposit of ESI / EPF employees’ share. During the course of assessment proceedings, it was noticed that the assessee deposited the amount of employees’ contribution towards EPF and ESI belatedly. The details of due date and actual payment have been set out on page 5 of the assessment order. He, therefore, made disallowance of Rs.53,451/-, which came to be affirmed in the first appeal.

I have heard the rival submissions and perused the relevant material on record. It is found that the issue raised here is no more res integra. The Hon’ble Supreme Court in the case of CIT v. Alom Extrusions Limited (2009) 319 ITR 306 (SC) has held that the amendment to first proviso and omission of the second proviso to section 43B by the Finance Act, 2003 is retrospective. The Hon’ble Delhi High Court in the case of CIT v. Aimil Limited (2010) 321 ITR 508 (Delhi) has allowed deduction in respect of employees’ share when the amount was paid before the due date. When I consider these two judgments, it becomes patent that both the employer’s and employees’ contribution are allowable as deduction if the amount of provident fund etc., though belatedly, but is paid before the due date of filing of return u/s 139(1) of the Act.

Adverting to the facts of the instant case, it is seen as an admitted position that the assessee deposited the employees’ contribution towards EPF and ESIC before the due date u/s 139(1) of the Act. Respectfully following the aforenoted judgment of the Hon’ble jurisdictional High Court, I order for the deletion of the addition sustained in the first appeal on account of late deposit of employees’ contribution to the Provident fund.

In the result, the appeal is partly allowed.