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2022 (2) TMI 116 - AT - Income TaxDelayed deposit of employees’ contributions qua ESI, PF and Labour Welfare Fund - payment after the due date as prescribed in the relevant Acts, however, before the due date of filing of return of income u/s.139(1) - HELD THAT:- Jurisdictional High Court in the case of PCIT vs., Pro Interactive Service (India) Pvt. Ltd., [2018 (9) TMI 2009 - DELHI HIGH COURT] while following the decision in the case of CIT Versus AIMIL Ltd.[2009 (12) TMI 38 - DELHI HIGH COURT] has held that legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. It was further held that it was not the legislative intent and objective to treat belated payment of Employees’ Provident Fund & Employees’ State Insurance Scheme as deemed income of the employer under section 2(24)(x) of the I.T. Act, 1961. From the aforesaid Judgments of the Hon’ble High Courts, it is clear that the Hon’ble Courts have not drawn any distinction between the employee’s and employer’s share qua PF & ESI contributions, hence, first determination of the Ld. CIT(A) qua non-applicability of the provisions of Section 43B of the Act to the employee’s share qua PF, ESI and Labour Welfare Fund is unsustainable. Applicability of the amendment to Sections 36(1)(va) and Section 43B - Various benches of the ITAT including Hyderabad Bench in the case of Value Momentum Software Services Pvt. Ltd.[2021 (5) TMI 989 - ITAT HYDERABAD] have taken into consideration the identical issue qua applicability of the amendment to Sections 36(1)(va) and Section 43B of the Act, by inserting Explanations by the Finance Act, 2021 and clearly held that the amendment shall be applicable from 1st April, 2021 onwards . It is also relevant to note that the CBDT has also issued Memorandum of Explanation qua applicability of the amended provisions of Sections 36(1)(va) & 43B of the Act w.e.f. 1st April, 2021 and Assessment Year 2021-21 onwards, hence there is no doubt qua applicability of the amended provisions referred above, prospectively. The second aspect as considered by the ld. CIT(A) qua applicability of the amended provisions of Sections 36(1)(va) and 43B of the Act to the cases in hand, is also un-sustainable. - Decided in favour of assessee.
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