M/S. MEC ELECTRIC CONTRACTS PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

This appeal is filed by assessee against the order of Ld. CIT (A) –IX, New Delhi dated 10/06/2014 raising the solitary ground that confirmation of disallowances of Rs 228026/- on account of disallowance of right of under recovered. ESI/PF from sundry debtors being bad debts on hypothetical grounds and therefore the order of the lower authorities are against the provisions of the income tax act.

Brief facts of the case are that assessee company is engaged in the business of electric contractor and filed its return of income on 05/10/2010 declaring income of Rs. 6 496980/–. Assessment under section 143 (3) of the act was made on 19/02/2013 at an income of Rs. 6 893100/–. Amongst other addition a sum of Rs. 228026/– on account of amount outstanding from principal on account of PF / ESI written off was disallowed by AO and Confirmed by CIT (A) and therefore assessee is in appeal before us.

The Ld. authorized representative submitted that that assessee is engaged in the business as a contract and therefore it provides manpower to carry on installation job work at different sites. If the contractor is not registered under the respective labour law, such as provident fund and ESI then the principle of the appellant are required to pay the above dues to respective government authorities. The principles of the appellant have deducted the amounts on account of above dues from the bills raised by the appellant and have not been paid. Therefore, assessee submitted the