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2010 (7) TMI 81 - HC - Income TaxPF /ESI – deposit during the grace period - AO found that in Form No. 3CD the tax auditor had given and certified the details of contribution deducted from the employees’ salary towards the Provident Fund (PF) and the contribution under the Employees State Insurance (ESI). The assessee had not fulfilled its obligation of depositing the Provident Fund contribution deducted from the employees’ salary as well as its own contribution within the due date as stipulated under the statute. – Held that: - that as soon as employees contribution towards provident fund or ESI is received by the assessee by way of deduction or otherwise from the salary / wages of the employees, it will be treated as ‘income’ at the hands of the assessee. It clearly follows therefrom that if the assessee does not deposit this contribution with provident fund/ESI authorities, it will be taxed as income at the hands of the assessee. However, on making deposit with the concerned authorities, the assessee becomes entitled to deduction under the provisions of Section 36(1)(va) of the Act. Section 43B (b), however, stipulates that such deduction would be permissible only on actual payment. - the payments are made before the due date of filing the return, no such disallowance can be made under Section 43B
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