TMI Blog2011 (1) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... in brief, as per relevant orders are that return declaring income of ₹ 44,25,610/- filed on 24-12-2006 by the assessee, engaged in the business of manufacture of dyed chemicals, after being processed u/s 143(1) of the Income-tax Act, 1961 [hereinafter referred to as the Act ] was selected for scrutiny with the service of a notice u/s 143(2) of the Act on 09-10-2007.During the course of assessment proceedings, the Assessing officer[ AO in short] noticed that the assessee debited an amount of ₹ 2,08,223/- on account of sundry balances written off. To a query by the AO, the assessee explained that the bad debt written off during the year pertains to two parties, the amount having been outstanding for more than 3 years. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO on the ground that the appellant has not even proved the badness in the debt so written off. This ground is therefore dismissed. 4. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A). The learned AR on behalf of the assessee while reiterating their submissions before the ld. CIT(A) contended that the issue is squarely covered in favour of the assessee by the decision of the Hon ble Apex Court in TRF Limited vs. CIT 323 ITR 397 (SC) . The learned DR, on the other hand, did not oppose these submissions on behalf of the assessee. 5. We have heard both the parties and gone through the facts of the case as also the decision relied upon. We find that the Hon'ble Supreme Court in the case of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees contribution cannot be treated as income of the assessee u/s 36(1)(va) r.w.s. 2(24](x) in view of the a section 43B of the I T Act. Reliance was also placed on the decision of Hon'ble ITAT in the case of Sai Consultant Engineers Pvt Ltd. I have been holding that employees contribution is not covered by section 43B but by section 36(1) (va) of the I T Act. This view is taken by the Special Bench of ITAT, Kolkata in the case of I T C Ltd 112 ITD 57 (Kol). As there is difference of opinion on this point, following the decision of Special Bench of ITAT, the disallowance of ₹ 11,393/-is upheld. 8. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A). The learned AR on behalf of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond proviso to section 43B of the Act by the Finance Act, 2003, operated, retrospectively, is with effect from, April 1, 1988 and not prospectively from April 1, 2004. Hon ble Court observed that earlier under the second proviso to section 43B as amended by the Finance Act, 1989, the assessees were entitled to deduction only if the contribution stood credited on or before the due date given in the Provident Funds Act. This created further difficulties and on a representation made to the Finance Ministry one more amendment was made by the Finance Act, 2003. Though this amendment was made applicable with effect from April 1, 2004, the amendment was curative in nature and applied retrospectively with effect from April 1, 1988.It was clarified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004, 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 paid on or before the due date specified in the PF etc law, the scheme of the Act is that employees contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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