TaxTMI 
TaxTMI 
2010 (11) TMI 555
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....tions derived no income chargeable to tax. 3. That leave may be granted to add, alter, modify or submit further or more grounds of appeal at any time during hearing of appeal." 2. The assessee has filed a cross objection on the following ground: "1. For that the ld. C.I.T(A) is arbitrary, illegal and bad and not in accordance with law. 2. For that the ld. C.I.T(A) erred in confirming the addition of Rs.1,15,983/- u/s 40(a)(ia) on the facts and circumstances of the case. 3. For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing." 3. In respect of Ground No. 1 of the appeal, the relevant facts are that the assessee paid employees contribution to provident fund of Rs.89,319 after due date. AO by following the decision of the Special Bench, I.T.A.T., Kolkata in the case of JCIT vs ITC Ltd. 112 ITD 57 (Cal) (SB) equivalent to 299 ITR (AT) 341 (SB) has disallowed the said amount by observing as under: "Therefore, from the above it is found that the employee's contribution to the Provident Fund and E.S.I. Fund are not governed by the provisions of section 43B of the I T Act for the purpo....
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....Ltd. (supra). He further submitted that the only issue decided on those appeals were whether amount paid on account of P.F. after due date are allowable in view of section 43B read with section 36(1)(va) of the Act. He further submitted that it is nowhere decided as to whether belated payment of employees' contribution to provident fund paid is allowable if it is paid after due date but before due date of filing of return. 6. On the other hand, learned A.R. supported the order of the learned C.I.T(A) and also placed reliance on the aforesaid decisions as relied before the learned C.I.T(A). Besides above, the learned A.R. also referred the decision of the Hon'ble Delhi High Court in the case of CIT vs P.M. Electronics Ltd. AIT 2008 - 397 - H.C. 7. We have heard the learned representatives of the parties and have considered the orders of the authorities below. We have also considered the cases cited by the learned representatives of the parties in support of their submissions. We observe that there is no dispute to the fact that assessee had paid employees' contribution to provident fund after the due date. We observe that the above issue as to whether the employees' ....
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....liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return." 8. From the above it emerges that the term "due date" as appearing in section 36(1)(va) read with Explanation specifies the due date as the date by which the assessee is required as an employer to credit an employee's contribution under the employees a/c to the relevant fund. As regards the term "due date" as appearing in section 36(1)(va), the Explanation to section 36(1)(va) specifies the "due date" as 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." The term "due date" as specified in the Explanation to section 36(1)(va) does not refer to the due date fixed for filing the return of income u/s 139(1). Hence the "due date" as fixed for filing the return of income u/s 139(1) cannot be read into the Explanation to section 36(1)(va). The "due date" for crediting any sum received by the assessee from his employees as ....
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....visions would be rendered otiose if a view was to be taken that deductions of the aforesaid sums would be allowed as and when they are actually paid irrespective of the fact that they are not otherwise allowable under the Income-tax Act. The plain and unambiguous language used in section 43B makes it absolutely clear that the allowability of deduction of any sum referred to in clauses (a) to (f) upon actual payment is restricted to those deductions only, which are otherwise allowable under the Income-tax Act. Thus the factum of actual payment by itself is not sufficient to successfully claim a deduction u/s 43B, which is otherwise not allowable under the Income-tax Act. In other words, all those deductions, which are otherwise not allowable under the Income-tax Act, cannot be allowed even on actual payment u/s 43B. (iv) The proviso to section 43B carves out an exception and allows deduction in respect of any sum referred to in clauses (a) to (f) which is actually paid by the assessee on or before the due date for furnishing the return of income u/s 139(1) in respect of the previous year in which the liability to pay such sum was incurred. However, the proviso applies only t....
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....well-settled principle that a judgment must be read as a whole and the observations in the judgment have to be construed in the light of the question raised before the Court. It is the judicial principle found upon reading the judgment as a whole in the light of the question raised before the Court which forms precedent and not particular words or phrases. 11. In view of the above we hold that the assessee is not entitled to deduction u/s 36(1)(va) of the employees' contribution to provident fund which was paid after the due date as specified in Explanation to Section 36(1)(va) of the Act as section 43B cannot be pressed into service because section 43B comes into play only when a deduction is otherwise allowable under the Income Tax Act. Hence, we confirm the action of the AO by reversing order of the learned C.I.T(A) and accordingly allow ground no. 1 taken by the department. 12. In respect of ground no. 2 of the appeal the relevant facts are that the assessee paid STT of Rs.8,09,174 and claimed rebate u/s 88E of the Act. Assessee derived a net profit of Rs.50,55,462 from share trading. Tax on the said share profit comes to Rs.15,16,639. The AO stated that STT of ....