TMI Blog2010 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - 794/2010 - - - Dated:- 7-7-2010 - Appellant through: Ms. Suruchi Aggarwal, Adv. Respondent through: None. CORAM: HON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made within the grace period. He referred to Sections 43B, 36(1)(va) and 2(24)(x) of the Income Tax Act and Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and expressed the view that there had been late payment of employees‟ contribution towards PF and ESI an total addition of Rs.75,21,824/- and accordingly by order dated 26.12.2007 added the same to the taxable income. That apart charged interest under Section 234B and 234D of the Act and initiated a proceeding for penalty under Section 271(1)(c) of the Act. 3. Being dissatisfied with the aforesaid order, the assessee preferred an appeal before the CIT(A) who allowed the appeal of the assessee in part holding, inter alia, that the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind no infirmity in the order of CIT(A) vide which the relief has been given to assessee. We decline to interfere." 5. Ms. Suruchi Aggarwal, learned counsel for the revenue submitted that the tribunal has fallen into error by placing reliance on the decision rendered in CIT vs. P.M. Electronics Ltd., 313 ITR 161 (Del.) wherein it has held that if the payments are made before the due date of filing the return, no such disallowance can be made under Section 43B of the Act is not applicable to the case at hand inasmuch as the said decision had placed reliance on the decision of the Apex Court in the case of CIT vs. Vinay Cement Ltd., 2007 (213) CTR 268 = 2009 (313) ITR (SC) which only relates to the contribution made by the employer and wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee can get the benefit if the actual payment is made before the return is filed, as per the principles laid down by the Supreme Court in Vinay Cement (supra)." 6. Be it noted, the decision rendered by the Gauhati High Court was assailed before the Apex Court in Vinay Cement Ltd. (supra). In the said case, their Lordships have held thus: "In the present case we are concerned with the law as it stood prior to the amendment of Section 43B. In the circumstances the assessee was entitled to claim the benefit in Section 43B for that period particularly in view of the fact that he has contributed to provident fund before filing of the return. The special leave petition is dismissed." 7. It is apt to note that the Division Bench h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. This is the scheme of the Act for making an assessee entitled to get deduction from income insofar as employees' contribution is concerned. It is in this backdrop we have to determine as to at what point of time this payment is to be actually made." 8. Upon perusal of the aforesaid, we are of the considered opinion that the decisions rendered in P.M. Electronics Ltd.(supra) and AIMIL Limited (supra) have correctly laid down the law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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