TMI Blog2011 (3) TMI 1643X X X X Extracts X X X X X X X X Extracts X X X X ..... of not ice on 28.2.2011[AD on record] . Considering the nature of issues involved and the f indings of the learned CIT(A), we proceeded to dispose of the appeal af ter hearing the learned Departmental Representat ive. 3. Advert ing f i rst to ground no.1, facts, in brief , as per relevant orders are that e-return declaring ni l income f iled on 22-12-2006 by the assessee, manufacturing glazed t iles, was selected for scrut iny with the service of a not ice u/s 143(2) of the Income-tax Act , 1961 [hereinaf ter referred to as the Act ] on 8-10-2007.Dur ing the course of assessment proceedings, the Assessing Of f icer[AO in shor t ] not iced that the assessee ref lected gross prof it [GP] @ 18.98% on sales of ₹ 8,65,13,683/- as against GP @ 29.25% on sales of ₹ 5,34,58,805/ - in the preceding year. To a query by the AO, the assessee submi t ted comparat ive details of increase / decrease in sales and other expenses. I t was pointed out that major increase was on account of expenses on raw material, elect ricity, power fuel as also inward transportat ion. Since dif ference in increase in expenses was about 10.05%, GP declined in the year under considerat ion vis- -v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Century Tiles Ltd., the G.P. has fallen from 32% to 23%. Likewise in other two cases also, there has been fall in G.P. I find that the A.O. has not rejected the books of accounts of the appellant before making estimate of G.P. There are court decisions saying that only for fall in G.P., the books of accounts can not be rejected. The A.O. has not found any defects in the books of accounts of the appellant and simply for fall in G.P., the A.O. has made G.P. addition without considering the reply filed by the appellant which is found to be not proper. The appellant has explained the reasons for fall in G.P., as to be due to increase in fuel rate, raw materials and transport cost. In view of the above facts, the G.P. addition made By the A.O. can not be sustained and the same is deleted. 5. The Revenue is now in appeal before us against the aforesaid f indings of the learned CIT(A). The learned DR while car rying us through the impugned order supported the f indings of the AO. To a query by the Bench, the learned DR did not point out any defects not iced by the AO in the books of accounts. 6. We have heard learned DR and gone through the facts of the case. Indisputab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent view in the matter, we are not inclined to interfere with the findings of the ld. CIT(A). Therefore, ground no. 1 in the appeal of the Revenue is dismissed. 7. Ground no.2 relates to disal lowance of ₹ 1,26,279/- [actually stated to be ₹ 1,31,162/-] on account of belated deposit of employees contr ibut ion towards P.F. The AO disal lowed an amount of ₹ 1,26,279/- on account of belated deposit of employees contr ibut ion towards provident fund by invoking the provisions of sect ion 36(1) (v) of the Act . 8. On appeal, the learned CIT(A) deleted the disal lowance, the amount having been paid by 21-04-2006 i.e. before the due date of f iling of the return. 9 The Revenue is now in appeal before us against the aforesaid f indings of the learned CIT(A). The learned DR supported the f indings of the AO. 10. We have heard the learned DR and gone through the facts of the case .As regards employer s and employees contribution towards PF , we find that the ITAT Ahmedabad Benches have been consistently following the decision of the Hon ble Delhi High Court in the case of CIT v. P.M.Electronics Ltd., 220 CTR 635 (Delhi), wherein relying upon the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards PF contributions etc shall be income . S. 36 (1) (va) provides that if such sums are contributed to the employees account in the relevant fund on or before the due date specified in the PF legislation, the assessee shall be entitled to a deduction. The second Proviso to s. 43B (b) provided that any sum paid by the assessee as an employer by way of contribution to any provident fund shall be allowed as a deduction only if paid on or before the due date specified in 36(1)(va) of the Act. After the omission of the second Proviso w.e.f 1.4.2004, the deduction is allowable under the first Proviso if the payment is made on or before the due date for furnishing the return of income. The Hon ble High Court while considering whether the benefit of s. 43B can be extended to employees contribution as well, which are paid after the due date under the PF law but before the due date for filing the return, held that (i) Though the Revenue has argued that a distinction is to be made between employers contribution and employees contribution and that employees contribution being in the nature of trust money in the hands of the assessee cannot be allowed as a deduction if not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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