DCIT, CIR-10(1), KOLKATA, KOLKATA vs. M/S LBI EXPORT PVT. LTD., KOLKATA

It is reported that neither any one appeared for the assessee nor any application filed for seeking adjournment. Therefore, we proceed to hear the ld.DR and dispose of the appeal on merits and by perusing the material available on record.

The only issue is to be decided as to whether the CIT-A is justified in deleting the impugned addition made u/s. 2(24) r.w.s 36(1)(va) of the Act in the facts and circumstances of the case.

The brief facts of the case are that the assessee is engaged in the business of leather bags and filed its e-return on 30-09-2012 declaring total income of Rs.4,54,42,236/-. Notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, the ld.AR of the 2 M/s. LBI Export Pvt. Ltd assessee company appeared from time to time and furnished before the AO various details including audited accounts as asked by the AO. On perusal of audited accounts filed by the assessee the AO that Employees ‘Contribution to PF/ESI amounting to Rs.31,78,704/- (PF) and Rs.7,40,579/- (ESI) totaling to Rs. 39,19,283/- were deposited by the assessee after the due date of payment and as per Section 2(24) r.w.s 36(1)(va) of the Act claimed the same as allowable expenditure by relying on the order of the Hon’ble Supreme Court in the case of Alom Extrusion Ltd reported in 319 ITR 306, wherein it has been held that PF/ESI are allowed, when the same was deposited before furnishing of return of income. But, the AO was of the view that since the assessee had failed to deposit the same within the due dates specified u/s. 2(24) r.w.s 36(1)(va) of the Act added the same to the total income of the assessee.

Aggrieved by such order of the AO, the assessee preferred an appeal before the CIT-A. Before him the assessee has relied on various case laws available in his order in support of its claim.

The CIT-A after considering the submission and the case laws as relied on by the assessee directed to delete the impugned addition. The CIT-A in his order has also held that amounts on account of Employees’ Contribution to PF/ESI were deposited well before the date of filing of return of income u/s. 13(1) of the Act and held that the disallowance made by the AO cannot be sustained.

Before us the ld. DR relied on the order of the AO in making the impugned addition on this issue. He also relied on the judgment of Hon’ble Gujarat High Court in the case of CIT Vs. GSRTC and prayed to allow the appeal of revenue. 3 M/s. LBI Export Pvt. Ltd

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 the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 10-11-2017