TaxTMI 
TaxTMI 
2011 (1) TMI 117
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....pearing on behalf of the Assessee, has submitted that the Hon'ble Supreme Court in the case of CIT v. Alom Extrusions Ltd. reported in 319 ITR 306 has considered this issue and affirmed the decision in the case of CIT v. Sabari Enterprise reported in 213 CTR 269 (Kar) and valued the ratio laid down in Allied Motors Pvt. Ltd. reported in 224 ITR 677. Therefore, he requested to uphold the action of the Ld. CIT(A). 5. After hearing the rival submissions and on careful perusal of the materials available on record, we are unable to accept the contention of the Ld. Counsel for the Assessee that the order of the Hon'ble Supreme Court in the case of Alom Extrusions is not on the issue of employees' contribution. On the other hand, it is on the employer's contribution and relating to the second proviso to section 43B and the amendment of the first proviso to section 43B of the Act by the Finance Act, 2003 whereas in assessee's case the undisputed fact is that the additions made by the AO are under the provisions of section 36(1)(va). Since this issue has been decided by this Tribunal in ITA No. 1255/Kol/2010 exhaustively, we find no reason to deviate from the view taken by us in ITA No. ....
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....t provisions of section 36(1)(va) and relevant clauses of section 43B of the Act which are as under : "36(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein , in computing the income referred to in section 28 - (i) (ia) (ib) (iia) (iii) (iiia) (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, order or notification issued there under or under any standing order, award, contract of service or otherwise." 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of - a. ...........
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....nd for the welfare of the employees by the employer-assessee to the employee's account in the relevant fund or funds must be the one specified in the Explanation to section 36(1)(va) and not the "due date" for filing the return of income under section 139(1). In the case before us there is no dispute that the assessee company has neither credited the impugned contribution received by it from its employees to the employees' account in the relevant fund nor it has done so on or before the due date specified in the Explanation to section 36(1)(va) and hence we are of the considered view that the claim of the assessee for deduction cannot succeed. Further section 43B, we are of the considered view, does not apply in respect of the employees contribution for the following reasons : (i) Section 43B opens with a non obstante clause which means that it controls the operation of other provisions of the Income-tax Act in that section 43B will have overriding effect notwithstanding other provisions under which a deduction may otherwise be allowable. (ii) The opening words of section 43B make it clear that the said section would have overriding effect and ....
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.... in section 43B to which it has been added. Proviso to section 43B cannot therefore be made applicable to those deductions which are otherwise not allowable under the Income-tax Act." 9. From the above we are of the view that a claim/deduction which is otherwise not allowable u/s 36(1)(va) or for that matter any other provision of the Income Tax Act can neither be considered nor is allowed u/s 43B. The opening words of section 43B ,namely "notwithstanding anything contained in any other provision of this Act a deduction otherwise allowable under this Act ......." make it amply clear that section 43B comes into play only when deduction is otherwise allowable under the Income Tax Act . The purpose of section 43B is i) to bar the deduction of the sums referred to therein unless they are actually paid and ii) not to allow deduction which is otherwise not allowable under the Income Tax Act. Therefore, section 43B cannot be pressed into service in a case like the one before us where deduction is not otherwise allowable u/s 36(1)(va). Moreover, section 43B is a general provision which merely bars deduction of specified sums unless they are actually paid and whereas provisions of sectio....