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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi
Per Shri P.M. Jagtap:- This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-XXXVI, Kolkata dated 19.02.2013 for the assessment year 2007-08.
The issue raised in Ground No. 1 of this appeal by the assessee relates to the disallowance of Rs.14,351/- made by the Assessing Officer ./2013 Assessment year: 2007-2008 Page 2 of 4 and confirmed by the ld. CIT(Appeals) under section 2(24)(x) read with section 36(1)(va) of the Income Tax Act on account of belated payment made on account of employees’ contribution to Provident Fund after the prescribed due date but before the date of filing of the return of income.
At the time of hearing before us, the ld. Representatives of both the sides have agreed that this issue involved in Ground No. 1 of assessee’s appeal is squarely covered in favour of the assessee, inter alia, by the decision of the Hon’ble Calcutta High Court in the case of CIT –vs.- Vijay Shree Limited (ITAT No. 245 of 2011 dated 06.09.2011), wherein it was held that even the employees’ contribution to Provident Fund is covered by section 43B read with second proviso thereto, as introduced by Finance Act, 2003 and the same is, therefore, allowable as deduction if paid before the due date for filing of the return of income for the relevant period. Respectfully following the said decision of the Hon’ble Calcutta High Court in the case of Vijay Shree Limited (supra), we direct the Assessing Officer to delete the disallowance made on account of employees’ contribution towards Provident Fund and allow Ground No. 1 of the assessee’s appeal.
As regards the common issue involved in Grounds No. 2 to 4 of the assessee’s appeal relating to the disallowance of Rs.88,442/- made under section 40(a)(ia), it is observed that the amount of Rs.88,442/- paid by the assessee to one Shri Prabhu Sharma on account of contract labour charges was disallowed by the Assessing Officer by invoking the provisions of section 40(a)(ia) as there was a failure on the part of the assessee to deduct tax at source from the said payment as required by the provisions of section 194C. On appeal, the ld. CIT(Appeals) confirmed the said disallowance made by the Assessing Officer.
At the time of hearing before us, the limited contention raised by the ld. Counsel for the assessee is that the amount of Rs.88,442/- in question having been already offered to tax by Shri Prabhu Sharma, the ./2013 Assessment year: 2007-2008 Page 3 of 4 assessee cannot be treated as assessee in default for non-deduction of tax at source from the said payment and there is no question of making disallowance under section 40(a)(ia) as held by the Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Limited –vs.- CIT reported in 293 ITR 226 (SC). He has submitted that the Assessing Officer may verify this claim of the assessee. The ld. D.R. has not raised any objection in this regard. We, accordingly, restore this issue to the file of the Assessing Officer for the limited purpose verifying the claim of the assessee that the concerned payee Shri Prabhu Sharma has already paid tax on the amount of Rs.88,442/- paid by the assessee on account of labour charges and accordingly allow appropriate relief to the assessee. Keeping in view the decision of the Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Limited (supra), Grounds No. 2, 3 & 4 of the assessee’s appeal are accordingly treated as partly allowed for statistical purposes.