JCIT, (OSD), CIR-1(2), KOLKATA, KOLKATA vs. M/S NELLIMARLA JUTE MILLS CO. LTD., KOLKATA

The only issue is to be decided as to whether the CIT-A is justified in holding that the assessee is entitled to claim deduction of delayed deposits of PF and ESI in the facts and circumstances of the case.

Brief facts of the case are that the assessee is a company and engaged in the business of manufacturing of jute goods. During the course of assessment proceedings the AO found that the assessee deposited employees’ contribution to PF amounting to Rs.42,07,565/- and contribution to ESI amounting to Rs.31,11,655/- to the concerned authority beyond the specified date U/Sec. 36(1)(va) r.w.s 2(24)(x) of the Act. Accordingly, the total amount of Rs.73,19,220/- ( Rs.42,07,565 + Rs.31,11,655) was added to the total income of the assessee by an order dt. 31-12-2010 of the AO passed u/s. 143(3) of the Act.

In appeal, the CIT-A by placing his reliance in the case of CIT Vs. Vijay Shree Ltd of the Hon’ble High Court of Calcutta deleted the said addition by observing that the deduction could be allowed even if it is paid beyond the specified date, but before the filing of return of income. Relevant portion of his order is reproduced herein below:-

The ld.DR relied on the order of the AO. On the other hand, the ld.AR submits that the issue raised in the appeal is covered in favour of the assessee by the decision of the Hon’ble High Court of Calcutta in the case of supra and supported the impugned order of the CIT-A.

Heard both the parties and perused the record. We find that the issue in hand is squarely covered by the decisions of the Hon’ble Supreme Court in the cases of Vinay Cement Ltd and Alom Extrusions Ltd reported in (2009) 313 ITR (St.1)(SC) and in (2009) 319 ITR 306(SC). We further find that the Tribunal on identical issue in for the A.Y 2012-13 dt. 10-11-2017 in the case of DCIT, Cir-10(1), Kolkata Vs.M/s. LBI Export Pvt. Limited has disposed of the same in favour of assessee. Relevant portion of which is reproduced herein below:- “8. Heard the ld. DR and perused the record. We find that the issue in hand is squarely covered by the decisions of the Hon’ble Supreme Court in the cases of Vinay Cement Ltd and Alom Extrusions Ltd reported in (2009) 313 ITR (St.1)(SC) and in (2009) 319 ITR 306(SC). We find that the impugned amount towards employees’ contribution to PF/ESI were deposited well beyond the due date of filing of return. Respectfully following the aforesaid judgments of the Hon’ble Supreme Court in the cases of supra, we are of the view that the AO was not right in making the impugned addition. The CIT-A was justified in directing to delete the same. We uphold the impugned order of the CIT-A and it is justified. Thus, the ground(s) raised by the revenue is liable to be dismissed.

In view of above, we are of the view that the CIT-A was correct in deleting the same. Therefore, the ground no.1 raised by the revenue is dismissed.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 16-02-2018