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TMI Blog2016 (10) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... on made under section 36(1)(va) of the Income Tax Act, 1961 ["Act" in short] with regard to the delay in the payment of employee's contribution to ESIC and PF, and (ii) The ld. CIT(A) erred in directing the Assessing Officer to delete the addition made under section 14A of the Act. 2. Brief facts of the case are that the assessee is engaged in business of engineering and fabrication and filed its return of income on 26.09.2011 declaring total income of Rs..19,44,79,495/-. The return filed by the assessee was processed under section 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and notice under section 143(2) of the Act was issued on 12.09.2012. After considering the submissions of the assessee and veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act is squarely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. M/s. Industrial Security & Intelligence India Pvt. Ltd. in TCA Nos. 585 and 586 of 2015. With regard to the issue of disallowance made under section 14A of the Act, the ld. Counsel for the assessee has strongly relied on the decision in the case of Cheminvest Ltd. v. CIT (Del) (HC) (2015) 61 Taxmann.com 118 and pleaded that both the grounds raised by the Revenue should be dismissed. 6. We have heard both sides, perused the materials available on record and gone through the orders of authorities below. The first issue relates to disallowance of Rs..2,09,62,709/- under section 36(1)(va) of the Act being employee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the issue is covered in favour of the assessee. We have perused the above decision, wherein, the Hon'ble High Court has observed and held as under: "2. The brief facts of the case are as follows: The respondent/assessee filed its return of income for the assessment years in question. The said returns were processed and were not selected for scrutiny. Subsequently, the Assessing Officer noticed that there was escapement of income and hence reopened the assessments under Section 147 of the Income Tax Act by issuing notice under Section 148 of the Income Tax Act. While completing the reassessment, the Assessing Officer disallowed the expenses claimed by way of Employee's contribution to PF and ESI holding that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to section 43B and amendment of first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively and thus with effect from 1.4.1988 i.e. the date of insertion of first proviso. The co-ordinate Bench of this Tribunal considering a similar issue in the case of M/s.Venkateswara Electrical Industries P. Ltd. Vs. DCIT (supra) following the decision of Hon'ble Delhi High Court in the case of CIT Vs. Amil Ltd. (321 ITR 508) held that even the employees contribution to provident fund is to be allowed as deduction if it is paid within due date for filing of return. While holding so, the Tribunal observed as under:- "6. We have heard the submissions made by the representatives of both the sides and have perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years. The grounds of appeal raised by the assessee are allowed." 3. Aggrieved by the said order of the Tribunal, the Revenue is before this Court. 4. Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 5. We find that the Tribunal has rightly relied on the decision of the Supreme Court in the case of CIT V. Alom Extrusions Ltd. reported in 319 ITR 306, whereby, the Supreme Court held that omission of second proviso to Section 43B and amendment to first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively, i.e., with effect from 1.4.1988 i.e., the date of insertion of first proviso. The Delhi High Court in the case of CIT V. Amil Ltd. reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed the disallowance under section 14A of the Act r.w. Rule 8D at Rs..18,343/-. After considering the submissions of the assessee and by following the decision of the Tribunal in the case of ACIT v. M. Baskaran 50 taxmann.com 138, the ld. CIT(A) has directed the Assessing Officer to delete the addition made under section 14A of the Act r.w. Rule 8D. In view of the decision of the Hon'ble Mumbai High Court in the case of Godrej & Boyces Mfg. Co. Ltd. (supra), wherein, it was held that the application of section 14A of the Act is constitutionally valid and Rule 8D is applicable from the assessment year 2008-09 and onwards. In view of the provisions of clause (iii) to Rule 8D(2), any investments made would definitely involve certain admin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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