DCIT, BANGALORE vs. M/S AVASARALA TECHNOLOGIES LTD., BANGALORE

PDF · subscribers
ITA 523/BANG/2015Status: DisposedITAT Bangalore30 July 2015AY 2011-123 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 Tribunal held that the issue is covered by the jurisdictional High Court's decision, which allows deduction for employees' PF and ESI contributions even if deposited after the due date under the respective Acts, provided they are paid before the due date of filing the return of income.

What were the facts?

The assessee company remitted employees' contribution to PF and ESI after the due dates specified under the respective Acts. The Assessing Officer disallowed this as a deduction, treating it as income in the hands of the assessee.

What were the issues?

Whether employees' contribution to PF and ESI, deposited after the statutory due date but before the return filing due date, is eligible for deduction.

Which sections of the Income-tax Act were involved?

Section 2(24)(x),Section 36(1)(va),Section 139(1),Section 43B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SMT. P. MADHAVI DEVI & SHRI JASON P BOAZ

For Appellant: Dr. P.K.Srihari, Addl.CIT(DR)
Hearing: 28/07/2015Pronounced: 30/07/2015

Per JASON P. BOAZ, AM:

1.

In this appeal, the Revenue is aggrieved by the order of the order of the CIT(A)–I, Bangalore, dated 20/01/2015 in allowing the claim of the assessee u/s 36(1)(va) of the Income-tax Act, 1961 [‘Act'] by following the decision of the jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd., without appreciating the fact that the assessee has not remitted the employees’ contribution towards Provident Fund and ESI within the due date

M/s.Avarasarala Technologies Ltd. Page 2 of 3 specified under the Act and as such, these sums are income in the hands of the assessee in terms of section 2(24)(x) read with section 36(1)(va) of the Act.

2.

Brief facts of the case are that the assessee-company filed its return of income for the relevant assessment year. During the assessment proceedings u/s 143(3), the Assessing Officer (AO) observed that the assessee has remitted the employees’ contribution to PF and ESI after the due date for such remittances. AO, therefore, disallowed the same and brought it to tax.

3.

Aggrieved, assessee preferred an appeal before the CIT(A) who followed the decision of the jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd., in of 2013 dated 14/02/2014 reported in 43 Taxman.com 33 (Kar.) wherein it was held that even in respect of employees’ contribution to PF and ESI, deposited beyond the due date under respective Acts but paid before the due date of filing of return u/s 139(1), the same is eligible for deduction u/s 43B of the Act. Against the relief given by the CIT(A), Revenue is in appeal before us.

4.

The learned Departmental Representative supported the order of the AO. None was present on behalf of the respondent- assessee. We find that the issue is now covered in favour of the assessee by the decision of the jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd. (cited supra) as well as in the M/s.Avarasarala Technologies Ltd. Page 3 of 3 case of Sabari Enterprises (298 ITR 141)(Kar). We, therefore, do not see any reason to interfere with the order of the CIT(A).

5.

In the result, the revenue’s appeal is dismissed.

More judgments on Section 2(24)(x)

All 2,270 judgments and leading authorities on Section 2(24)(x) →

Recent GST High Court judgments

Search GST case law →