TMI Blog2015 (8) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... om 1st April 2004 would have clearly applied to the Assessee's case. In this view of the matter also, we find that the ITAT was fully justified in deleting the addition of ₹ 1,82,77,138/- on account of delayed payment of provident fund of employees' contribution. Considering the above settled position of law, we are of the opinion that the order of the CIT (A) is required to be reversed on this issue as such, the assessee is entitled to deduction. - Decided in favour of assessee. Allowability of the club expenses by way of membership entry fee to the club - Held that:- As decided in case of Clariant Chemicals (I) Ltd vs. Addl. CIT [2014 (11) TMI 439 - ITAT MUMBAI] in assessee’s own case for the earlier assessment year, it has been held that an expenditure incurred on account of payment of membership entrance fee paid to the club is an allowable expenditure – Decided against revenue.- Decided in favour of assessee. - I.T.A. No. 1218/M/2011, C.O. No.35/M/2015 - - - Dated:- 12-8-2015 - SHRI D. KARUNAKARA RAO AND AMIT SHUKLA, JJ. For The Assessee : Shri Rakesh Kumar Agrawal, Sr. AR For The Revenue : Shri Girish Dave ORDER PER D. KARUNAKARA RAO, AM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised the following grounds which read as under: 1. The Ld CIT (A) erred in confirming the addition of ₹ 3,19,333/- being employee s contribution deposited after the statutory due date but before the end of the relevant financial year. 2. The Ld CIT (A) ought to have followed the dicision of the Hon ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd (319 ITR 306) (SC) wherein it has been held that no distinction should be made between employers and employee s contribution to provident fund. 3. The Ld CIT (A) erred in directing to allow deduction for entrance fees of ₹ 6,00,000/- on deferred basis over a period of 5 years. 4. The respondent submits that the said expenditure of ₹ 6,00,000/- being revenue in nature ought to have been allowed as deduction entirely in the year in which such expenditure is incurred. In this regard, the respondent relies on the decision of the Hon ble Supreme Court in the case of United Glass Mfg. Co. Ltd (Civil Appeal No.6447 of 2012). The Hon ble Supreme Court, in the said decision has held that club membership fees for employees is business expenditure and allowable as deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act 1988, the second proviso came to be inserted which read as under :- Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36. Thereafter, the said second proviso was further amended vide Finance Act 1989 with effect from 1st April 1989 which read as under:- Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of subsection (1) of section 36, and where such payment has been made otherwise than in cash, the sum has been realised within fifteen days from the due date. 6. On a plain reading of the above provisos, it became ex-facie clear that the Assessees employers were entitled to deductions only if the contributions to any fund for the welfare of the employees stood credited on or before the due date given in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tand how this deduction could have been disallowed to the Assessee. Admittedly, the Assessment Year in question is 2006-07. The second proviso to section 43B quoted above was deleted with effect from 1st April 2004 and simultaneously the first proviso was also amended bringing about a uniformity in deductions claimed towards tax, duty, cess and fee on the one hand and contribution to the employees' provident fund, superannuation fund and other welfare funds on the other. These deductions being claimed in the return of income filed for the Assessment Year 2006-07, the amendments to Section 43B which came into force with effect from 1st April 2004 would have clearly applied to the Assessee's case. In this view of the matter also, we find that the ITAT was fully justified in deleting the addition of ₹ 1,82,77,138/- on account of delayed payment of provident fund of employees' contribution. 8. Considering the above settled position of law, we are of the opinion that the order of the CIT (A) is required to be reversed on this issue as such, the assessee is entitled to deduction. Accordingly, cross objection no.1 raised by the assessee is allowed. 9. The second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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