Payment before statutory due date secures deduction despite clerical tax-audit errors; documentary evidence controls entitlement.

Deductions tied to payment by a statutory due date are allowable where contemporaneous documentary evidence proves payment before that due date; a declared unpaid gratuity deposit was accepted as deductible on production of a LIC Gratuity Fund receipt dated before the return filing due date, and employees' ESI contributions shown as paid late in the audit report were accepted as timely once challans correcting a typographical year-entry error established payment on or before their respective due dates. Both contested disallowances were deleted and claims allowed.

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Issues: (i) Whether deduction for gratuity contribution of Rs. 1,00,000 paid before the due date for filing return under section 139(1) is allowable against disallowance under section 43B; (ii) Whether employees' contribution to ESI of Rs. 69,424 shown in Form 3CD as paid after due date is in fact paid on or before the respective due dates and the addition under section 36(1)(va) is liable to be deleted.

Issue (i): Whether the gratuity contribution of Rs. 1,00,000 deposited on 01.10.2018 is allowable as deduction despite being reported as unpaid in the tax audit report.

Analysis: The payment receipt dated 01.10.2018 demonstrates deposit to the LIC Gratuity Fund prior to the due date for filing return under section 139(1) for AY 2018-19 (31.10.2018). The amount admitted as unpaid in Form 3CD was partly paid subsequently and documentary evidence of the deposit was placed on record.

Conclusion: Deduction of Rs. 1,00,000 is allowable in favour of the assessee.

Issue (ii): Whether the employees' contribution to ESI totaling Rs. 69,424 was paid on or before the respective statutory due dates despite a typographical error in Form 3CD.

Analysis: Form 3CD contains a clerical error in the year entry for the payment dates. Challans for the three payments dated 19.05.2017, 20.06.2017 and 14.07.2017 credibly establish payment on or before the respective due dates of 21.05.2017, 21.06.2017 and 15.07.2017. Documentary evidence corrects the typographical mistake and supports allowance of the payments.

Conclusion: The addition of Rs. 69,424 is deleted and the claim is allowed in favour of the assessee.

Final Conclusion: On the proven facts and documentary evidence, both contested disallowances are set aside and the appeal is allowed in part to give effect to the allowed payments.

Ratio Decidendi: Where a deduction depends on payment by a specified statutory due date, verifiable contemporaneous documentary evidence of payment before that due date establishes entitlement to the deduction even if a tax audit statement contains a clerical error reporting a later or unpaid status.

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