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TMI Blog2016 (1) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... PF in certain month within the prescribed time limit as per the provisions of the Act. Accordingly, the AO made a disallowance of Rs. 6,14,017/- u/s 36(1)(va) of the I.T. Act. 2.2 The assessee preferred first appeal before the ld. CIT(A) who deleted the addition made by the AO on account of late deposition of employee's PF contribution by considering the decision of Coordinate Bench in the case of DCIT vs. Amit Basu (ITA No. 765/JP/2011 dated 25-01-2012). 2.3 During the course of hearing, the ld. DR relied on the order of the AO. 2.4 To this effect, the ld. AR of the assessee relied on the order of ld. CIT(A) and decision of Coordinate Bench in the case of DCIT vs. Amit Basu (supra) besides decisions of Hon'ble Jurisdictional High Court as under:- (i) CIT vs. State Bank of Bikaner & Jaipur (2014) 363 ITR 70 (Raj.) (ii) CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (2014) 363 ITR 307 (Raj.) (iii) CIT vs. Udapur Dugdh Utpadak Sahakari Sangh Ltd. (2014) 366 ITR 163 (Raj.) The ld. AR of the assessee prayed for dismissing this ground of the Revenue 2.5 We have heard the rival contentions and perused the materials available on record. It is observed that the payment of employee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 2(24) (x) as well as 36(1)(va) of the Act. The Honb'le Apex Court noticed that on the basis of the provisions of Section 43B before insertion of Second proviso, it was clear that employers were entitled to deduction only if the contribution stands credited on or before due date given in the PF Act. The second proviso created further difficulties and therefore, second proviso was omitted and first proviso was amended. Before Honb'le Apex Court, the Revenue contended that the Parliament has maintained a clear dichotomy between payment of tax, duty, cess or fee on one hand and payment of contributions to the welfare funds on the other. Such distinction was consciously kept upto April, 2004. It was further argued that the amendment made by Finance Act 203 cannot be considered as curative. This approach of the Department was not accepted. Section 43B was introduced with the object to disallow deduction claimed merely by making a book entry based on mercantile system of accounting. Section 43B made it mandatory for the Department to grant deduction in computing the income u/s 28 in the year in which tax, duty, cess etc. is actually paid. The Parliament took cogniza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or before the due date, as defined in the Explanation below clause (va) of sub-section (1) of Section 36. Thus, the assessee would earn the entitlement only if the actual clause (va) of sub-section (1) of Section 36 of the Act. As per the said Explanation ''due date'' means the date by which the assessee is required, as an employer, to credit the employees' contribution to the employees account in the relevant fund under any Act, rules, order or notification issued thereunder or under any standing order award contract of service or otherwise.'' 3.7 The Hon'ble Delhi High Court has considered the issue after considering Section 36(1)(va) and Section 2(24)(x) of the Act. The Hon'ble Delhi High Court held that contention of the revenue is not acceptable in view of rejection of SLP of the revenue by Hon'ble Apex Court in the case of CIT Vs. Vinay Cement Ltd. , 313 ITR 1. Section 36(1)(va) requires that the sum should be credited by the assessee to the employees account. It nowhere mentioned that the sum should be paid. There is a difference between the word ''credited'' and paid. The Second proviso to Section 43B before amendment by Finance Act 2003 required that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2003 is curative in nature and is retrospective. However, we are concerned with the assessment year 2007- 08. The Hon'ble Apex Court has referred to the explanation given in Section 36(1)(v)(a) of the Act. The issue of employee's contribution covered u/s 43B has been considered by the Hon'ble Karnataka High Court in the case of CIT vs Sabri Enterprises, 298 ITR 141. The Hon'ble Apex Court has upheld the decision of Hon'ble Karnataka High Court in the case of CIT vs Sabri Enterprises (supra) while deciding the appeal in the case of CIT vs Alom Extrusions Ltd. (supra). The Hon'ble Apex Court has dismissed the SLP in the case of CIT vs Vinay Cement 313 ITR 1 (St.). While dismissing the SLP, the Hon'ble Apex Court has referred to decision of Hon'ble Gauhati High Court in the case of CIT vs George Williamson (Assam) Ltd., 284 ITR 619. In the case before Hon'ble Gauhati High Court, the issue was in respect of contribution of PF and ESI relating to employees shares. It is noticed from the audit report that all the payments have been paid before the due date of filing of return and therefore, the ld. CIT(A) was not justified in not deleting the sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of hearing, the ld. DR relied on the order of the AO. 3.4 To this effect, the ld. AR of the assessee relied on the order of the ld. CIT(A) besides following case laws. (i) CIT vs. Excel Industries Ltd. , 358 ITR 295 (SC) (ii) Saurashtra Cement & Chemical Industries Ltd. vs. CIT 213 ITR 523 (Guj. (iii) Rajasthan State Industrial Development & Inv. Corporation Ltd. vs. ACIT (ITA No. 66 & 354/JP /08 dated 30-09-2008 for A.Y. 2004-05 and ITA No. 138& 235/JP/09 for A.Y. 2005-06 dated 8-01-2010) The ld. AR of the assessee prayed for dismissing this ground of the Revenue 3.5 We have heard the rival contentions and perused the materials available on record. It emerges from the record that Govt. organization expenses are booked only after approval of various authorities. Since the approvals are received during this year, the expenses are current year expenses. The Jaipur Bench is also regularly allowing such claims as held in various cases referred by the ld. AR in ld. CIT(A)'s order. This Coordinate Bench has also allowed prior period expenses in the case of ACIT vs. M/s. Rajasthan State Seeds Corporation Ltd. vide its order dated 20-11-2015 in ITA No. 25/JP/2014 for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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