TMI Blog2012 (1) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ablished that writing off of part of the debt was not true. The onus was on the Revenue to have collected the material to suggest that writing off of bad debt was for the purpose of evading the tax. We therefore, feel that the ld CIT(A) was justified in deleting the addition. - ITA No.765/ JP/2011 - - - Dated:- 25-1-2012 - SHRI R.K.GUPTA AND SHRI N.L.KALRA Appellant by : Shri Vinod Johri Shri Sunil Mathur Respondent by : Shri P.C. Parwal ORDER PER N.L. KALRA, AM:- The revenue has filed an appeal against the order of the ld. CIT(A)-I, Jaipur dated 07-06-2011 for the assessment year 2008-09. 2.1 The first grievance of the Revenue is that the ld. CIT(A) has erred in directing to allow deduction u/s 10BA of ₹ 30,82,768/-. 2.2 The ld CIT(A) has directed the AO to allow deduction u/s 10BA of the Act after observing as under:- 4.2 I have carefully perused the order of the AO and submission of AR. On perusal of the statements taken by the AO at the time of order passed by her, it is seen that similar statements had been recorded in the past by the AO and the matter had been agitated before the Hon ble ITAT on same/similar grounds. It is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ( i.e. Provident Fund, ESI etc. ) within the due date prescribed under the provision of such fund. The payment of employee s contribution into the relevant fund has no relation with the due date of filing of Income Tax return referred in section 43-B of Income Tax Act 1961. (b) Allowability of such deduction in respect of employee s contribution within the purview of section 36(1)(va) of Income Tax Act 1961 was never provided by section 43-B and it was never a part of section 43-B of Income Tax Act 1961. However, deduction of employer s contribution towards PF/ESI/other welfare funds was provided by section 43-B(b). (c) Allowability of deduction by way of employer s contribution is not separately governed by any direct or nonobstante provision of Income Tax Act 1961 except section 43- B(b) of Income Tax Act 1961. (d) Provision of section 43-B(b) and 36(1)(va) of Income Tax Act 1961 are mutually exclusive and independent. Provisions of section 36(1)(va) are more stringent and uncompromising with reference to the due date as provided in the relevant Funds such as Provident fund, ESI etc. (e) There is a decision of Hon ble Karnataka High Court in the case of CIT Vs Sab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2007-08. 3.4 We have heard both the parties. Before amendment u/s 43B of the Act by the Finance Act, 2003, there were two provisos to Section 43B of the Act Provided that nothing contained in this section shall apply in relation to any sum referred to in clause (a) or clause (c) or clause (d) or clause (e) or clause (f), which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub\x7f section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return : 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 sub-section (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. 3.5 The employers made a representation to the Govt. tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if such tax, duty, cess or fee is paid before the due date of filing of return. It did not apply to contributions to labour welfare funds. The reasons appears to be that the employer(s) should not sit on the collected contributions and deprive the workmen of the rightful benefits under social welfare legislations by delaying the payment of contributions to the welfare funds. The second proviso resulted in implementation problems and therefore, the second proviso was omitted and the uniformity was given in the first proviso by equating tax, duty cess and fee with contributions to welfare funds. Thus the Hon'ble Apex Court has considered the aspect of explanation to Section 36(1)(va) in respect of due date. The Hon'ble Apex Court approved the decision of The Hon'ble Karnataka High Court in the case of CIT Vs. Sabri Enterprises, 298 ITR 141 and it also affirmed the decision of Hon'ble Calcutta High Court. The decision of The Hon'ble Bombay High Court in the case of CIT Vs. Pamwi Tissues Ltd. , 313 ITR 13 was reversed. The Hon'ble Delhi High Court in the case of CIT Vs. AIMIL Ltd. , 321 ITR 508 had an occasion to consider as to whether the Tribunal was correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the ld. CIT(A) was not justified in directing the AO to allow deduction of ₹ 58,106/- in respect of the deposit of employees contribution. The revenue has relied upon the decision of ITAT Mumbai Bench in the case of DCIT Vs. Gandhar Oil Refinery (I) Ltd., 104 TTJ 630 which is dated 23-03-2006. The ITAT Cochin Bench in the case of Harrison Malayalam Ltd. Vs. ACIT 32 SOT 497 held that payment of employees contribution to PF and labour welfare fund made before due date of filing of return is to be allowed. The ITAT Delhi Bench in the case of ACIT Vs. Jindal Saw Pipes Ltd. 118 TTJ 228 has also held that employers contribution to PF after due date but before due date of filing of return cannot be disallowed. 3.8 The ITAT Jaipur Tribunal vide its order dated 04-11-2011 in the case of the assessee for the immediately preceding year has decided the issue in favour of the assessee after observing as under:- 3.2 This issue has been decided by the Tribunal in the case of ITO vs Instrumentation Ltd., Kota (ITA No. 331/JP/ 2011 dated 05-08-2011). It will be useful to reproduce para 4.2 and 4.3 of that decision. 4.2 The above referred issue stands decided against the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in case such contributions are paid before due date of filing. It is not in dispute before us that the contributions have not been paid before due date of filing of the return. We therefore, hold that the ld. CIT(A) was justified in deleting the Employers P.F. Contribution and Employees P.F. Contribution. 3.9 Looking to the above discussion, we hold that the ld CIT(A) was justified in deleting the addition of ₹ 58,106/-. 4.1 The third grievance of the Revenue is that the ld. CIT(A) has erred in deleting the addition of ₹ 55,51,721/- made by the AO on account of disallowance of bad debt u/s 36(1)(vii) of the Act. 4.2 The AO noticed that the assessee has claimed bad debt of ₹ 55,51,721/- in respect of the amounts due from two parties. The assessee has partially written off the bad debt in the name of the debtor parties. The account has not been closed. According to the AO, it was necessary for the assessee to have closed the account of the customers for claiming bad debt. 4.3 The ld CIT(A) has deleted the addition after observing as under:- 7.3 I have carefully perused the order of the AO and the submission of the AR. From the order of the AO ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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