Assessee wins appeal, disallowances under section 43B deleted for assessment years 2003-04 and 2004-05. The Tribunal ruled in favor of the assessee, allowing the appeals and directing the deletion of disallowances under section 43B for both assessment years ...
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Assessee wins appeal, disallowances under section 43B deleted for assessment years 2003-04 and 2004-05.
The Tribunal ruled in favor of the assessee, allowing the appeals and directing the deletion of disallowances under section 43B for both assessment years 2003-04 and 2004-05.
Issues involved: Appeal against disallowance of employees' contribution to provident fund & ESI in computing taxable total income.
Analysis: The appeals were filed against the Commissioner of Income Tax (Appeals)'s order for the assessment years 2003-04 & 2004-05. The only issue raised by the assessee was the disallowance of employees' contribution to provident fund & ESI in calculating taxable income. The Assessing Officer disallowed the contributions as they were remitted beyond the due date for payment but within the due date for filing the return, citing section 43B of the Act. The Commissioner of Income Tax (Appeals) upheld the disallowance, leading to the appeal. The counsel for the assessee argued that the contributions were paid before the due date for filing the return, relying on various court decisions and a co-ordinate Bench decision. The Departmental Representative supported the lower authorities' orders.
The Tribunal considered the arguments and cited the decision of the Hon'ble Supreme Court in CIT Vs. Alom Extrusions Ltd., stating that the amendment by Finance Act, 2003, was curative and effective retrospectively from 1.4.1988. Referring to a similar issue in a previous case, the Tribunal held that even employees' contribution to provident fund should be allowed as a deduction if paid within the due date for filing the return. The Tribunal directed the Assessing Officer to delete the disallowances made under section 43B for both assessment years, allowing the appeals of the assessee.
In conclusion, the Tribunal ruled in favor of the assessee, allowing the appeals and directing the deletion of disallowances under section 43B for both assessment years. The decision was pronounced in open court on October 31, 2014, in Chennai.
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