TMI Blog2017 (7) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... URT] - Decided in favour of assessee. - ITA No. 291/Hyd/2017 - - - Dated:- 7-7-2017 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Revenue by : Smt. Suman Malik O R D E R PER S. RIFAUR RAHMAN, A.M.: This is an appeal of the Revenue directed against the order of the learned Commissioner of Income-tax (A) - 2 Hyderabad, dated 30/12/2016 for AY 2012-13 wherein the revenue has raised the following substantial ground of appeal: In the facts and circumstances of the case, whether the CIT(A) is correct in law in holding that the payment of the employee s contribution towards EPF ESI by the employer assessee, which is not in consonance with the explanation to section 36(1)(va) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carefully gone through the section 36(1)(va) with section 2(24)(x) and also gone through decision of the Hon ble High Court of Allahabad in the case of Sagun Foundry (P) Ltd. Vs. CIT, [2017] 78 Taxmann.com 47 (All.) wherein the Hon ble Court has observed as under: Section 36(1)(va) permits deductions in respect to relevant fund of employees. ■ Section 43B permits deductions otherwise allowable under the Incometax Act in case any sum payable by the assessee is paid actually before the date of filing of return under section 139 and carves out an exception in this regard. ■ Explanation to section 36(1)(va) provides that deduction shall be allowed in respect to the sum paid by the assessee to employee's account, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making provision in his books of account in that regard and this situation continued upto 1-4-1984. An assessee, if maintaining books on accrual system of accounting, even after collecting contribution from his employee, and even without remitting the amount to Regional Provident Fund Commissioner, he would have claimed deduction as 'business expense' by merely making a provision to that effect in his books of account. A similar discrepancy was noticed in the context of sales tax where assessee collected the same and other indirect taxes from his respective customers and claimed deduction only by making provisions in his books without actually remitting the amount to exchequer. To curb this practice, section 43B was inserted with ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of industries, again Parliament, vide Finance Act, 2003, with effect from 1-4-2004, made amendment by deleting Second Proviso and amending First Proviso. ■ The Supreme Court in the case of Alom Extrusions Ltd. (supra) considered the intent, purpose and object in the historical back drop of insertion of section 43B and its progress by way of various amendments and held that when the contribution had been paid by the assessee towards provident fund, etc. prior to filing of return under section 139(1), the assessee would be entitled for deduction under section 43B. [Para 27] ■ From the aforesaid judgment of the Supreme Court, the Bench finds that irrespective of the fact that deduction in respect of sum payable by emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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