ONEIRO CHEMICALS LTD.,VADODARA vs. THE INCOME TAX OFFICER, WARD-2(1)(1), VADODARA

The relevant facts as culled out from the materials on record are as under:- Asst.Year –2012-13 In this case, the assessee company is engaged in the business of Manufacturing and trading of Chemicals and it has filed return of income on 30/09/2012 declaring total loss of Rs.53,67,873/-. During the course of assessment proceedings, the Assessing Officer disallowed a sum of Rs.48,154/- u/s.40(a)(ia), Rs.4,90,899/- on account of non-payment of Provident Fund in time, payment to unapproved Gratuity Fund at Rs.2,36,518/- and made 1/5th disallowance out of various expenses resulting into additions of Rs.2,15,491/-. All these additions/disallowances have been discussed by the Assessing Officer in Para-4 to 7. 3. On verification of Audit report and its Annexure, it is noticed by the learned AO that the assessee has made belated payment of Provident Fund of Rs.4,90,899/-. As per provisions of section 36(1)(va) of the Act. Deduction in respect of any sum received by the taxpayer as contribution from its employee towards any welfare fund of employee is allowable as deduction only if such sum is credited to the employee’s account in the relevant fund on or before due date. The AR of the assessee was asked to give justification of late payment of PF. The AR submitted his reply on 23/02/2015. The AO has not submitted any reasons for late payment. Since the assessee has failed to pay, the same are disallowed and added to the total income of the assessee and addition of Rs.4,90,899/- was made by the learned AO.

Against the said order assessee preferred first statutory appeal before the learned CIT(A) who dismissed the appeal of the assessee. Asst.Year –2012-13

Now appellant’s appeal is before us.

We have gone through the relevant record. We have heard both the parties. This issue is covered against the appellant by the judgment of Hon’ble Gujarat High Court in the case of Gujarat State Road Transport Corporation, 41 Taxman.com 100, relevant extract from the judgment is quoted as under:- “Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 – Business disallowance – Certain deductions to be allowed on actual payment (Employees contribution) – Whether where an employer has not credited sum received by it as employees’ contribution to employees’ account in relevant fund on or before due date as prescribed in Explanation to section 36(1)(va), assessee shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of return under section 139(1) – Held, yes – Assessee state transport corporation collected a sum being provident fund contribution from its employees – However, it had deposited lesser sum in provident fund account – Assessing Officer disallowed same under section 43B – However, commissioner (Appeals) deleted disallowance on ground that employees contribution was deposited before filing return – Whether since assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper – Held, yes [Para 8] [In favour of revenue]”

Respectfully following the judgment of the Jurisdictional High Asst.Year –2012-13

In the result, appeal filed by the assessee is dismissed. This Order pronounced in Open Court on 22/09/2017 vejthr flag vejthr flag vejthr flag महावीर "साद vejthr flag (लेखा सद"य) ("या"यक सद"य) Ahmedabad; Dated 22/09/2017

""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त(अपील) / The CIT(A)-2, Vadodara. "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त ////