2010 (3) TMI 993

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....eduction of Rs.15,55,727/- claimed by the assessee on account of payment of employees' contribution to Provident Fund. A perusal of the assessment order shows that the assessee claimed deduction of Rs.15,55,727/- on account of employees' contribution to Provident Fund. This consisted of payment of Rs.1,55,215/- made before the due date, Rs.5,62,450/- made after the due date but within the grace period of five days and Rs.8,40,062/- made after the grace period but before the due date for filing the return of income. The Assessing Officer took the view that the payments made after the due date but before the grace period and the payments made after the grace period but before the due date for filing the return cannot be allowed as a deduction....

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....rders of the Mumbai Benches of the Tribunal in support of his contention that the employees' contribution should be allowed under section 43B if it is deposited within the due date for filing the return for the assessment year in question. In the case of Simplex Engineering & Foundry Works P. Ltd. vs. JCIT, in ITA No: 5760/Mum/2006 dated 29th November 2007 (assessment year 2003-04) and connected appeals, it has been opined by the Tribunal in Para 16 that since the contribution of the employees' is withheld by the employer by deducting the same from the wages and salaries, the dues of the employees' merged with the funds of the employer and the employees' contribution thus becomes similar to the employer's own contribution. It has been obser....

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....d. vs. ACIT, in ITA No: 4211/Mum/2006 (assessment year 2003-04), the Tribunal by order dated 11th February 2008 held, following the view taken by the Supreme Court in the case of CIT vs. Vinay Cement Ltd. (2007) 213 CTR 268 (SC), that the employees' contribution paid before the due date for filing the return of income is allowable as a deduction. There is thus a series of orders of the Mumbai Benches of the Tribunal on the issue and respectfully following them we delete the disallowance of 14,02,512/-, out of which Rs.5,62,450/- was paid after the due date but before the grace period and Rs.8,40,062/- was paid after the grace period but before the due date for filing the return of income. The first ground is accordingly allowed. 5. The sec....

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....ved debit notes which contained the calculation of the commission in the earlier year and not a single debit note was received during the year under appeal. He, therefore, held that the liability to pay commission and brokerage cannot be said to have crystallized in the year under appeal. He, therefore, disallowed the amount of Rs.24,34,266/-. 6. On appeal, the CIT(A) held that the assessee is following the mercantile system of accounting and, therefore, ought to have made provision for the commission and the brokerage in the accounts of the earlier years as and when the sales took place and not having done so, it was not open to the assessee to claim that these expenses were allowable in the year in which the corresponding sales proceeds ....