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M/s. Ray Engineering Ltd. Versus Dy. C.I.T. 15 (3) (1) , Mumbai

2017 (3) TMI 105 - ITAT MUMBAI

Deduction of contribution to EPF under section 43B - amount paid before the due date for filing the return of income - Held that:- Respectfully following the decision of the Hon'ble Bombay High Court in the case of CIT vs. Hindustan Organics Chemicals Ltd. (2014 (7) TMI 477 - BOMBAY HIGH COURT) we reverse the orders of the learned CIT(A) on this issue and direct the authorities below to allow the assessee’s claim for deduction on account of contributions to employees provident fund (EPF) under s .....

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for A.Y. 2012-13. 2. The facts of the case, briefly stated, are as under: - 2.1 The assessee, a company engaged in construction work, filed its return of income for A.Y. 2012-13 on 22.09.2012 declaring total income of ₹ 15,80,66,050/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 31.01.2015 wherein the .....

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ide the impugned order dated 25.01.2016. 3.1 Aggrieved by the order of the CIT(A)-24, Mumbai dated 25.01.2016 the assessee has preferred this appeal raising the following grounds: - 01. On the facts and circumstances of the case and in law the Commissioner of Income tax (Appeals 24 erred in confirming the disallowance made by the Assessing Officer with regard to contribution of Employees Provident Fund of ₹ 28,70,807/- paid before the due date of filing the income tax return. 02. The Commi .....

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ng the order of the learned CIT(A) in upholding the disallowance of ₹ 28,70,807/- made by the Assessing Officer (AO) on account of delayed payment of contribution to EPF in accordance with provisions of section 2(24)(x) r.w.s. 36(1) of the Act relying on the judgement of the Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation (366 ITR 170) (Guj). It is submitted that the said amount of EPF were paid by the assessee before the due date of filing of .....

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ntions and carefully considered the material on record, including the judicial pronouncements cited and placed reliance upon. It is not disputed that the fact situation is that though the contribution of EPF was not paid within the period specified under the PF Act; the same has been paid before the due date of filing of the return of income in the case on hand for A.Y. 2012-13. In this factual matrix, we are of the view that this issue is squarely covered by the decision of the jurisdictional H .....

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ntribution to EPF, superannuation fund and other welfare funds on the other. In coming to this finding the Hon'ble Bombay High Court applied the decision of the Hon'ble Apex Court in the case of CIT vs. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC). 3.4.2 On similar facts as in the case on hand, we find that this issue of the assessee s claim for deduction of contribution to EPF under section 43B of the Act is squarely covered by the decision of the Hon'ble Bombay High Court in the ca .....

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t for the aforestated items not on a mercantile basis but on a cash basis. This situation continued between 1st April 1984 and 1st April 1988 when Parliament again amended section 43B and inserted the first proviso thereto which inter alia laid down that in the context of any sum payable by the Assessee by way of tax, duty, cess or fee, if paid by the Assessee even after the closing of the accounting year but before the date of filing of the return of income, the Assessee would be entitled to th .....

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fore the due date as defined in the Explanation below clause (va) of subsection (1) of section 36. Thereafter, the said second proviso was further amended vide Finance Act 1989 with effect from 1st April 1989 which read as under:- 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 clau .....

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culties for the Assessees - employers. Therefore, Industry once again made representations to the Ministry of Finance who, after taking cognizance of the difficulties, inserted an amendment vide Finance Act, 2003 which came into force with effect from 1st April 2004. In other words, with effect from 1st April 2004, two changes were made in section 43B viz. deletion of the second proviso to section 43B and further amendment in the first proviso which reads as under:- Provided that nothing contain .....

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tax, duty, cess and fee on the one hand with contributions to various Employee s Welfare Funds on the other. 8. The section referred to above viz. section 43B and the amendments thereto came up for consideration before the Hon'ble Supreme Court in the case of Commissioner of Income Tax v/s Alom Extrusions Ltd., reported in (2009) 319 ITR 306 (SC) when the Supreme Court inter alia held that the amendments to the said section brought about by the Finance Act, 2003 with effect from 1st April 2 .....

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