ACIT, CIRCLE-33, KOLKATA, KOLKATA vs. HASIBUL HOSSAIN, KOLKATA

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ITA 853/KOL/2017Status: DisposedITAT Kolkata18 July 2018AY 2013-143 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) deleted the addition, relying on a High Court decision that allowed deduction for employee contributions paid before the due date of filing the return of income. The Tribunal found no infirmity in the CIT(A)'s order.

What were the facts?

The Assessing Officer disallowed an amount of Rs.74,03,362/- representing employees' contributions to a welfare fund for non-payment within the due date. The assessee had deposited these contributions before the due date of filing the return of income.

What were the issues?

Whether the disallowance of employees' welfare fund contributions for delayed deposit, but before the return filing due date, is justified.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, KOLKATA BENCH “D”, KOLKATA

Before: SH. WASEEM AHMED & SH. S.S.VISWANETHRA RAVI

Hearing: 02.05.2018Pronounced: 18.07.2018

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER

1.

This appeal by the Revenue against the order dated 28.02.2017 passed by CIT(A)-9, Kolkata for AY 2013-14.

2.

The only issue is to be decided as to whether CIT(A) justified deleting the addition made by the AO on account of non-payment of employees contributions to the welfare fund.

3.

Heard rival submissions and perused the material on record. It is noticed that the AO disallowed an amount of Rs.74,03,362/- which is a receipt from employees towards their contributions to welfare fund and for not depositing the same within due date as per provisions u/s 36(i)(va) of the Income Tax Act, 1961 (in short “Act”) and added to the total income of the assessee.

4.

The CIT(A) deleted the same by placing reliance in the decision of Hon’ble High Court of Calcutta in the case of CIT vs M/s Vijay Shree Ltd. In ITAT No.245 of 2011 vide order dated 06.09.2011 wherein it held the finding of ITAT, Kolkata Bench is justified in allowing the deduction to the assessee therein even if the credit is made to employees accounts beyond due date but before the due date filing the return of income. The relevant portion of the decision of Hon’ble High Court of Calcutta in the case of M/s Vijay Shree Ltd. (supra) is reproduced hereunder below:-

“It appears that the Tribunal below in view of the decision of the Supreme Court in the case of Commissioner of Income tax vs Alom Extrusion Ltd. Reported in 2009 Vol. 390 ITR 306, held that the deletion was justified. Being dissatisfied, the Revenue has come up with the present appeal. After hearing Mr. Sinha, learned Advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec 43(B) of the Income tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April 1988. Such being the position, the deletion of the amount paid by the Employee’s contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss the appeal.”

5.

It is noted from the perusal of the impugned order, that CIT(A) found satisfied that the assessee deposited employees contribution before due date of filing of return of income. Therefore, we find no infirmity in the order of CIT(A) and is justified. Ground Nos. 1 to 3 raised in this regard by the Revenue are dismissed.

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 18.07.2018.

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