TMI Blog1992 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act, 1987, with effect from 1st April, 1988, would be applicable to the assessment year 1984-85 ? 2. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in setting aside the order of the learned Commissioner of Income-tax (Appeals) confirming the additions of Rs. 10,78,497 and Rs. 4,514 (sales tax Rs. 8,90,852, provision for turnover and purchase tax Rs. 1,28,000, E. S. I. provision Rs. 4,535, provident fund contribution Rs. 32,992, Baranagar Municipality tax Rs. 32,118 and Rs. 4,514 for losses of sales tax) under section 43B of the Act and remitting the matter back to the Assessing Officer for re-examination in the light of the decision in ITO v. K S. Lokhandwala [1989] 31 ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The Tribunal concluded the dispute observing as follows: "The Assessing Officer disallowed the sums of Rs. 10,78,497 and Rs. 4,514 under section 43B of the Act on the ground that payments were not made during the year under appeal. The assessee, on the other hand, through the grounds of appeal has indicated that the payments were not due and, consequently, the payments were not made within the previous year of the assessee. The issue in this connection has been elaborately discussed by the Ahmedabad Bench in [1989] 31 ITD 305 and the guide line has been given there to see whether the amounts have been paid within the statutory period and/or within the period the return was filed by the assessee for the subsequent year. As the matter h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the relevant State, legislation, but admittedly the amount in question has been deposited before the due date for furnishing the return of income under section 139(1). The Tribunal, therefore, directed the Assessing Officer to re-examine the question of allowability of the deductions on such interpretation of the provision. Our attention was drawn to the decision of this court in CIT v. Sri Jagannath Steel Corporation, [1991] 191 ITR 676, wherein this court has held that the amendments to section 43B made by the Finance Acts, 1987 and 1989 are clarificatory and, therefore, the provisos inserted by these amendments, should also apply to earlier years even though the provisos and the Explanations have been apparently given prospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for sales tax, turnover tax, purchase tax, and the municipal taxes are concerned, the benefit of the proviso shall be available to the assessee if they are paid within the time referred to in section 139(1), no matter whether the assessment year is 1984-85. But the same principle cannot, however, apply to the provision for E. S. I. liability and the provident fund contribution. Here these two items fall under clause (b) of section 43B which reads as follows : "(b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees." For this particular clause or class of liability, it is the second proviso, which shall ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees. " From a combined reading of these provisions, it is clear that the contributions to provident fund or superannuation fund or a fund under the Employees' State Insurance Act are allowable only if the payments are made within the due date under the Acts or the Rules or the orders governing such contributions. In any case, the Tribunal was correct in holding that the provisions are allowable, if the liabilities are discharged in terms of the provisos below section 43B read with the Explanations. In the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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