Section 43B deduction and arm's length licence fee accepted, while factual tax and write-back claims were remanded.

Employees' state insurance contribution paid before the due date for filing the return was held allowable under section 43B. Claims relating to advances written off, leave encashment write-back, and TDS or treaty-based foreign tax credit were restored for verification because they depended on factual reconciliation and accounting details. The transfer pricing adjustment on technical and licence fees paid to an associated enterprise was deleted, as the royalty or licence fee was accepted as arm's length on the facts of the assessee's own earlier years. An additional ground seeking benefit of the India-Switzerland treaty was admitted as a pure question of law and restored for adjudication. The appeals were thus partly allowed for statistical purposes.

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Issues: (i) whether employees' state insurance contribution paid before the due date of filing the return was allowable under section 43B; (ii) whether advances written off in respect of deposits could be allowed as business loss or required verification; (iii) whether the claim relating to leave encashment write-back could be allowed on verification; (iv) whether credit of tax deducted at source and treaty-based credit under the Indo-Korean Double Taxation Avoidance Agreement required verification; (v) whether the transfer pricing adjustment on technical / licence fees paid to the associated enterprise was justified; and (vi) whether the additional ground seeking benefit of Article 10 of the India Switzerland Double Taxation Avoidance Agreement could be admitted and examined.

Issue (i): whether employees' state insurance contribution paid before the due date of filing the return was allowable under section 43B.

Analysis: The payments were admittedly made before the due date for filing the return of income. Once the statutory condition under section 43B was satisfied, the timing prescribed under the welfare enactment did not prevent allowance in the computation of income.

Conclusion: The deduction was allowable and the ground was decided in favour of the assessee.

Issue (ii): whether advances written off in respect of deposits could be allowed as business loss or required verification.

Analysis: The record showed different categories of deposits, including earnest money and tender deposits, electricity deposits, rental deposits, and gas, water and fuel deposits. Some deposits appeared to have been made in the course of business, but the exact year of deposit and the year in which the loss crystallised were not from the material considered by the lower authorities. The matter therefore required factual verification.

Conclusion: The issue was restored to the Assessing Officer for verification and was thus treated as allowed for statistical purposes.

Issue (iii): whether the claim relating to leave encashment write-back could be allowed on verification.

Analysis: The assessee's case was that the provision had earlier been added back and that the amount written back in the relevant year had not been separately claimed in the return computation. The objection that the claim could be entertained only through a revised return was not accepted as an absolute bar, because the matter turned on verification of the accounting treatment and the actual write-back on actuarial valuation.

Conclusion: The issue was restored to the Assessing Officer for verification and was thus treated as allowed for statistical purposes.

Issue (iv): whether credit of tax deducted at source and treaty-based credit under the Indo-Korean Double Taxation Avoidance Agreement required verification.

Analysis: The claim depended on reconciliation of the tax deducted with the income offered and on satisfaction of the conditions in Article 24 of the Indo-Korean Double Taxation Avoidance Agreement. The matter was therefore factual in nature and required examination by the Assessing Officer.

Conclusion: The issue was restored to the Assessing Officer and was thus treated as allowed for statistical purposes.

Issue (v): whether the transfer pricing adjustment on technical / licence fees paid to the associated enterprise was justified.

Analysis: The fee structure and the arm's length price issue were identical to earlier years in the assessee's own case. The same reasoning applied, and the royalty or licence fee at 3% of turnover was accepted as being at arm's length. Accordingly, the adjustment made by the TPO could not be sustained.

Conclusion: The transfer pricing adjustment was deleted and the issue was decided in favour of the assessee.

Issue (vi): whether the additional ground seeking benefit of Article 10 of the India Switzerland Double Taxation Avoidance Agreement could be admitted and examined.

Analysis: The additional ground raised a pure question of law affecting correct tax liability and the foundational facts were already on record. The Tribunal's power under section 254 extended to admitting such a ground, and the matter could appropriately be examined by the Assessing Officer.

Conclusion: The additional ground was admitted and restored for adjudication and was thus treated as allowed for statistical purposes.

Final Conclusion: The assessee succeeded on the deduction issue and on the transfer pricing issue, while the remaining monetary claims were restored for verification, resulting in a partial allowance of the appeals for statistical purposes.

Ratio Decidendi: A payment made before the due date of filing the return satisfies section 43B, and the Tribunal may admit a pure question of law arising from facts on record while restoring fact-dependent claims for verification.

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