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TMI Blog2009 (4) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner of Income Tax (Appeals)-XII, New Delhi has erred, both on facts and in law confirming disallowance the claim of commission on sales for ₹ 5,23,483/-paid to companies stockiest on sales made to Kendriay Bhandar and CSD canteens. 2. That the learned Commissioner of Income Tax (Appeals)-XII New Delhi has erred, both on facts and in law confirming the addition of Employee contribution deposited beyond the due date and grace period allowed in the respective Act. 4. In regard to first ground, which was against the action of learned CIT(A) in confirming the disallowance of the claim of commission on sales paid to companies stockiest on sales made to Kendriya Bhandar and CSD canteens, it was submitted by the learned AR th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d commission to two parties on sales to government undertaking, in the absence of any evidence brought on record by the revenue to show that such payments were against public policy, disallowance of such commission was not justified. It was his submission that since the expenditure on commission incurred by the assessee was not for any purpose against public policy or prohibited by law, the disallowance of such commission was not justified. 5. In reply, the learned DR vehemently supported the orders of authorities below. 6. We have considered rival submissions. It is noticed that the assessee has incurred expenditure on commission for the purpose as mentioned by the assessee and no evidence has been shown to the contrary. Just because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were deposited beyond the due date as provided under sec. 36(1)(via) of the Act, by observing that employees contributions could not be allowed under sec. 43-B and employees contribution was to be treated as income of the assessee within the meaning of sec. 2(24)(x) of the Act. By the impugned order, CIT(Appeals) confirmed the disallowance made by the Assessing Officer. We have carefully gone through the decision of Hon'ble Supreme Court and Hon'ble High Court as referred above and found that issue before the Karnataka High Court was with respect to claim of deduction u/s 36(1)(va), r/w sec. 2(24) which pertains to employees contribution which was not paid by the assessee before the statutory dates provided under the PF Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the employee's account in the relevant fund under any Act, rule, order or notification issued there-under or under any standing order, award, contract of service or otherwise. " This clause is inserted by Finance Act with effect from 1.4.1988. Explanation to this clause is read very carefully "due date " has been explained stating that "means the date by which the assessee is required as an employer to credit contribution to the employeed' account in the relevant fund under any Act, rule or order or notification issued thereunder or under any standing order, award, contract of service or otherwise". Prior to the above clause was inserted to sec. 36 giving statutory deductions of payment of tax under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds referred to in clause (b) are paid within the due date under the respective statutory enactments by the assessee as contended by the learned counsel for the revenue is not tenable in law and therefore the same cannot be accepted by us. The learned counsel Sri Parthasarathy and DR. Kishna, appearing for respondents, also drew our attention to the deletion of second proviso to sec. 43B of the IT Act by Finance Act, 2003 which provision has come into force, with effect from 1.4.2004. The reliance placed upon the decision of the Apex Court in the Allied Motors Pvt. Ltd. vs. CIT and also on the decision in General Finance Co. vs. CIT, in respect of applicability of sec. 43-B(b) and also omission of clauses (a) or (c) or (d) or (f) referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hon'ble Supreme Court in the case of Vinay Cement Ltd. 213 CTR 268. wherein SLP filed by the department was dismissed by observing that even prior to amendment of sec. 43B by the Finance Act 2003, no disallowance can be made if such payment is made before last date of filing the return of income. However no contrary decision of any High Court was brought to our notice by the ld. DR. We therefore respectfully follow the decision of Hon'ble Karnataka High Court, and reverse the order of lower authorities declining the deduction of payments actually made before last date of filing the return u/s 139(1) of IT Act. Accordingly, we allow the appeal in favour of the assessee." 8. In the circumstances, respectfully following the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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