TaxTMI 
TaxTMI 
2012 (1) TMI 217
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....avor of the assessee on the same facts for admitting the claim of the assessee for exemption u/s. 10BA vide their orders ITA No. 198/JP/2008 for A.Y. 2004-05 and ITA No. 1660/JP/2009 for A.Y. 2006-07. Pursuant to these findings on the same facts of the Hon'ble ITAT, Jaipur Bench the impugned addition of Rs. 30,82,768/- on account of disallowance of exemption u/s 10BA is directed to be deleted.'' 2.3 We have heard both the parties. The ld CIT(A) has directed the AO to allow deduction on account of the order of the Tribunal in the case of the assessee for the assessment year 2004-05 and 2006-07. We find no infirmity in the order of the ld CIT(A) vide which he has followed the order of the Tribunal. Following our findings for the earlier assessment years, we hold that the ld CIT(A) was justified in directing the AO to allow deduction u/s 10BA. Thus the first ground of appeal of the Revenue is dismissed. 3.1 The second grievance of the Revenue is that the ld. CIT(A) has erred in deleting the addition of Rs. 58,106/- made by the AO on account of delay in deposit of employee's contribution to PF as the same is not allowable deduction within the meaning of Section 36(1) read with Se....
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....as under :- " Whether the tribunal was correct in holding that contributions made by the assessee to PF and ESI are allowable deduction even though it is made beyond the stipulated period under mandatory provision of section 36(1)(va) and section 43-B of the Act and the same was paid by the assessee on or before due date for furnishing return of income as per section 139(1) of the Act ?" Thus it is amply clear that the question of law raised before Hon'ble High Court itself attracted adjudication with reference to section 43-B of Income Tax Act 1961. It is humbly submitted that correct proposition of law was not brought to the knowledge of Hon'ble High Court. It is submitted that the specific issue of allowability of employee's contribution within the ambit of section 36(1)(va) exclusively was not adjudicated. Therefore, the decision of Hon'ble Karnataka High Court is not applicable in the case of Shri Amit Basu. (d) There is another decision of Hon'ble Delhi High Court in the case of CIT Vs Aimil Limited & Ors 321 ITR 508 in favour of the assessee on the similar issue. The substantial question of law was raised as under :- "Whether Tribunal was correct in L....
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.... same is paid before due date of filing of return of income. By Finance Act, 2003, second proviso was omitted and the first proviso was also amended. The first proviso after amendment reads as under:- " Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub\x7f section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return." 3.6 The Honb'le Apex Court in the of Alom Extursion Ltd. 319 ITR 306 has considered the provisions of Section 2(24) (x) as well as 36(1)(va) of the Act. The Honb'le Apex Court noticed that on the basis of the provisions of Section 43B before insertion of Second proviso, it was clear that employers were entitled to deduction only if the contribution stands credited on or before due date given in the PF Act. The second proviso created further difficulties and therefore, second proviso was omitted and first proviso was amended. Before Honb'le A....
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.... Hon'ble Delhi High Court has mentioned that the Tribunal has taken contrary view and upheld the addition made by the AO. Before Hon'ble Delhi High Court in the case of CIT Vs. AIMIL Ltd. (supra) , the counsel of the revenue submitted as under. We are reproducing the submissions because the submissions before us are the same which have been considered by Hon'ble Delhi High Court. ''11. Ms. Prem Lata Bansal, ld counsel for the revenue. Thus argued that the second proviso to Section 43B, as it stood at the relevant time, clearly mentioned that deduction in respect of any sum referred to in clause (b) shall not be allowed unless such sum has actually been paid in cash or by issuance of cheque or draft or by any mode on or before the due date, as defined in the Explanation below clause (va) of sub-section (1) of Section 36. Thus, the assessee would earn the entitlement only if the actual clause (va) of sub-section (1) of Section 36 of the Act. As per the said Explanation ''due date'' means the date by which the assessee is required, as an employer, to credit the employees' contribution to the employees account in the relevant fund under any Act, rules, order or notificat....
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....year 2007-08. It will be useful to reproduce the para 5.2 from the above decision. ''5.2 This issue has been decided against the Revenue by the Tribunal in the case of M/s. Swastik Metal Casting Vs. ACIT (ITA No.964/JP/2010) vide order dated 20-04-2011. It will be useful to reproduce para 3.2 and 3.3 of the above referred order ''3.2 The ld. CIT(A) held that the employees contribution to PF and ESI is not to be allowed as the same has not been paid within the stipulated time as provided in respective Act of PF and ESI. The ld. CIT(A) confirmed the action of the AO. 3.3 We have heard both the parties. Hon'ble Apex Court in the case of CIT vs Alom Extrusions Ltd., 319 ITR 306 has held that the proviso introduced by the Finance Act, 2003 is curative in nature and is retrospective. However, we are concerned with the assessment year 2007-08. The Hon'ble Apex Court has referred to the explanation given in Section 36(1)(v)(a) of the Act. The issue of employee's contribution covered u/s 43B has been considered by the Hon'ble Karnataka High Court in the case of CIT vs Sabri Enterprises, 298 ITR 141. The Hon'ble Apex Court has upheld the decision of....
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....tiques for A.Y. 2007-08 and the balance of Rs. 11,28,104/- was carried forward to in the next F.Y. Similarly in the case of Ms/ Palace Fine Imported Furniture, it is clear that in the F.Y 2007-08 Rs. 22,37,647/- had been written off as bed debts and balance of Rs. 18,95,706/- was carried forward next year. Thus as per section 36(1)(vii), the assessee had written off bad debts in his books of accounts. The section does not entail the assessee to stop doing business with the party which has not paid all its dues or has wrung a discount from the assessee by not making the requisite payments. From the correspondence of the assessee with these parties submitted before me, it is seen that part of the dues required to be paid by these parties to the assessee were not honored by them. In fact, the AR has also filed correspondence of the banks of the assessee asking the parties to send the money owed to the assessee. Finally when this money was not forthcoming the assessee wrote off these amounts in it books. Sec. u/s. 36(1)(vii) does not require that the assessee stop business transactions with the parties who had earlier not been able to meet all their dues. In view of these facts I do no....