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2019 (9) TMI 143 - AT - Income TaxComputing the deduction u/s 10A - addition made on account of the disallowance of the provident fund/ ESIC payments - HELD THAT:- As decided in assessee's own case in the present case it cannot be disputed that the net consequence of the disallowance of the employer's and the employees' contribution is that the business profits have to that extent been enhanced. There was as we have already noted, an add back by the Assessing Officer to the Income. All profits of the unit of the assessee have been derived from manufacturing activity. The salaries paid by the assessee, It has not been disputed, relate to the manufacturing activity. The disallowance of the provident fund/ ESIC payments has been made because of the statutory provisions-section 43B in the case of the employer's contribution and section 36(v) read with section 2(24) (x) in the case of the employees' contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under section 10A the addition made on account of the disallowance of the provident fund/ ESIC payments ought to be ignored cannot be accepted. No statutory provision to that effect having been made, the plain consequence of the disallowance made by the Assessing Officer must follow. Decided against the Revenue
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