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of <h1>ITAT Upholds CIT(A) Rulings on Provident Fund, ESI, Gratuity & Rule 46A Compliance</h1> <h3>Kamarhatty Company Limited Versus Department of Income Tax</h3> Kamarhatty Company Limited Versus Department of Income Tax - TMI Issues:- Appeal filed by Revenue against orders of CIT(A) for assessment years 2003-04 and 2004-05.- Disallowance of employees' contribution to provident fund and ESI not paid within due date.- Claim of deduction for provision of gratuity.- Violation of Rule 46A by CIT(A) in allowing additional evidence.- Interpretation of Section 36(1)(va) and Section 43B of the Income Tax Act.Analysis:1. Disallowed Contributions to Provident Fund and ESI:- AO disallowed contributions as payments were made beyond due dates.- CIT(A) deleted disallowance based on Supreme Court's decision in Vinay Cement case.- ITAT upheld CIT(A)'s decision citing Delhi High Court's ruling.2. Deduction for Provision of Gratuity:- ITAT directed to allow deduction based on mercantile system of accounting.- Assessee submitted details of 70 employees' gratuity liability before CIT(A).- CIT(A) deleted disallowance after verifying records and supporting evidence.3. Violation of Rule 46A:- Revenue claimed CIT(A) violated Rule 46A by allowing additional evidence.- CIT(A) requested evidence from assessee under section 250(4) and assessee provided supporting evidence, not additional evidence.- ITAT confirmed CIT(A)'s decision, stating Rule 46A applies to additional evidence, not supporting evidence.4. Interpretation of Income Tax Act Sections:- Revenue argued for disallowance under Section 36(1)(va) and Section 43B.- ITAT dismissed Revenue's appeal, following Supreme Court's decision and applying principles from previous cases.5. Overall Decision:- ITAT dismissed both appeals by Revenue based on consistent application of legal precedents.- Rulings were made on disallowed contributions, deduction for gratuity provision, and Rule 46A compliance.- Order pronounced on 15th February, 2013, upholding CIT(A)'s decisions for the assessment years in question.
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