TMI Blog2017 (6) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that deduction will be allowable if the remittance is made with in the due date of filing the return of income. For the above stated reasons we do not find any infirmity in the order of the Ld. Revenue Authorities. Accordingly, we confirm the Order of the Revenue Authorities on this issue. Belated remittance of Employees contribution towards ESI - HELD THAT:- Since with respect to employee s contribution to ESI, provisions of Section 36(1)(va) of the Act apply by virtue of Section 2(24)(x) of the Act, the decision with respect to employee s contribution towards PF supra will hold good. Accordingly, this issue is also held against the assessee. Professional consultancy charges paid without deducting TDS - HELD THAT:- We remit back the matter to the file of the Ld.AO to decide the issue in the light of the decision of ANSAL LAND MARK TOWNSHIP (P) LTD. [ 2015 (9) TMI 79 - DELHI HIGH COURT] after duly verifying the return of income filed by M/s. Manohar Chowdhry Associates and M/s. SAP BPO Services Pvt. Ltd which shall be produced by the assessee before the Revenue Authorities with all requisite particulars. This issue is accordingly disposed off. Deduction u/s.10B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of depreciation amounting to ₹ 13,45,141/-. 3. With respect to ground No.v, supra, viz., depreciation, the Ld.AR did not press the ground; accordingly the ground is dismissed as not pressed. 4. The brief facts of the case are that the assessee is a private limited company engaged in the business of manufacturing doors frames and other products having both domestic and export sales, filed its return of income for the assessment year 2007-08 on 29.10.2007, admitting Nil income. Subsequently assessment was completed. Thereafter in the appellate proceeding the Tribunal set aside the entire assessment and remitted back the matter to the file of the Ld.A.O. Finally, the Ld.A.O passed Order U/s.143(3) r.w.s. 254 of the Act dated 28.03.2014, wherein he made several disallowances which was further confirmed by the Ld.CIT(A). Aggrieved by the Order of the Ld.CIT(A) the assessee is now in appeal before us. 5. Ground No.i: Belated remittance of Employees contribution towards Provident Fund:- During the course of scrutiny assessment, it was noticed by the Ld.AO that the assessee had remitted the employee s contribution to Recognized Provident Fund for ₹ 2,69,59 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore it was argued that by virtue of the provisions of Section 43 of the Act, the belated remittance should be allowed as deduction. The Ld.DR on the other hand relied on the orders of the Revenue authorities. 5.2 I have heard the rival submissions and carefully perused the materials available on record. We do not find any merit in the submission of the assessee on this issue. Section 36(1)(va) of the Act specifically provides that if the assessee remits the employee s contribution to Provident Fund within the due date mentioned in the relevant Act P.F Act, then the deduction will be allowable. The relevant portions of Section 36(1)(va) is reproduced herein below for reference:- 36(1)(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee s account in the relevant fund or funds on or before the due date. Explanation:- For the purposes of this clause, due date means the date by which the assessee is required as an employer to credit an employee s contribution to the employee s account in the relevant fund under any Act, rule, orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee only if the same is remitted within the due date mentioned in the relevant P.F. Act and with respect to employer s contribution to recognized Provident Fund, Section 43B of the Act makes it clear that deduction will be allowable if the remittance is made with in the due date of filing the return of income. For the above stated reasons I do not find any infirmity in the order of the Ld. Revenue Authorities. Accordingly, I confirm the Order of the Revenue Authorities on this issue. 6. Ground No.ii: Belated remittance of Employees contribution towards ESI:- Since with respect to employee s contribution to ESI, provisions of Section 36(1)(va) of the Act apply by virtue of Section 2(24)(x) of the Act, the decision with respect to employee s contribution towards PF supra will hold good. Accordingly, this issue is also held against the assessee. 7. Ground No.iii: Professional consultancy charges paid without deducting TDS:- It was revealed that the assessee had not deducted tax at source at the specified rate provided under the Act towards the professional and consultancy charges paid to M/s. Manohar Chowdhry Associates and M/s. SAP BPO Services Pvt. Ltd. Therefore, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is a difference between the word 'paid' and 'payable'. The legislature has used the word 'payable' very carefully in sec. 40(a)(ia). As no tax can be deducted after the amount is actually paid, the legislature has used the word 'payable' and not the word 'paid'. The amount of tax is required to be deducted before the payment and not after the payment, as it is not possible to deduct after the payment has been made. Deduction can be made till the amount is in the hands of the payer and not when it reaches the hands of the payee. The literal meaning of the word deduction in the context of the provisions of sec 40(a)(ia.) could be 'subtraction' which can be made only till the time the amount is in the hands of the payer. In view of the above discussions, I am of the considered opinion that the provisions of 40(a)(ia) will attract both the situations of paid and payable, Therefore, the disallowance made by the Assessing Officer is in order. The ground raised by the appellant is dismissed. 7.1 Before us, the Ld.AR submitted that the recipient of the professional charges viz., M/s. Manohar Chowdhry Associates and M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order is as under: 4. Deduction u/ s 10B 4.1. Export Turnover: The export realization details furnished by the assessee shows that the realized value includes Gain arising out of Foreign exchange fluctuation. In the business of export the assessee raises bills against the customer. The rates mentioned in the bill raised is recorded in the books of accounts of the assessee. At the same time he debits the account of the foreign buyer. At the year end also if the sale proceeds are not received by the assessee the foreign buyer is shown as sundry debtor. If the proceeds are not received the same financial year and received after one or two years the fluctuation arising at that time may not have any relevance to the turnover reported for the previous year in which the sale occurred. Further the assessee looses its rights over the sold items on despatch of the same. The sale proceeds should be value recorded on the books and the increase or decrease in exchange fluctuation on the bill amount is only a subsequent accrual after the completion of the transaction. The increase/decrease in exchange fluctuation arises out of market forces. Thus the increase i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Appellate Tribunal in the case of M/ s Renaissance Jewellery P Ltd vs the ITO, the decision of the Ahmedabad Bench of the Income Tax: Appellate Tribunal in the case of the DCIT vs Harsha Engineers P Ltd. decision of the Delhi Bench of the Income Tax Appellate Tribunal in the case of the ACIT vs M/ s Headstrong Services India P Ltd (copies of decisions enclosed) while following the decision of the Madras High Court earlier referred to have affirmed the arguments of the Appellant. The Calcutta High Court in the case, reported in 330 ITR 57 (copy of decision enclosed) while dealing with an identical issue in the context of deduction u/s 80HHC of the Act has affirmed the arguments of the Appellant. On the cumulative consideration of the facts and in the circumstances of the case, the Appellant prays for negating the re-working of the computation of deduction u/s 10B of the Act in allowing the related grounds of appeal in the interest of justice. Alternatively, the Appellant by placing reliance on the decision of the Special Bench decision of the Jurisdictional income Tax Appellate Tribunal in the case of the ITO vs M/s Sak Soft Ltd (copy of decision enclosed) pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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