2013 (8) TMI 962

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.... CIT(A) erred both in law and on facts of the case. (2) The ld. CIT(A) ought to have noticed that amendment made to section 40(a)(ia) by the Finance Act, 2010 is applicable to A.Y. 2010-11 and subsequent years and is not retrospective in nature. As such, the learned CIT(A) erred in directing not to disallow the expenditure since the payments were made before the due date for filing return of income. (3) The learned CIT(A) erred in holding that the assessee's contribution towards PF and ESI are paid within the due date for filing the return of income oblivious of the fact that 36(1)(va) for M/s. Sri Lakshmi Gayatri Hotels Pvt. Ltd. remittance of employee's contributions is the 'due date' in the relevant fund and is not ....

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.... CIT(A) allowed by the claim of the assessee by observing as under: "6.3 I find that this issue has been examined by the Calcutta High Court in CIT vs. Virgin Creations (GA No. 3200/2011 dated 23.11.2011) where it was held that the amendment to the provision was retrospective in nature. This decision was also followed by the ITAT, Ahmedabad Bench in the case of M/s. Alpha Projects Society P. Ltd. vs. DCIT (ITA No. 2869/Ahd/2011, dated 23.3.2012). Respectfully following these decisions, it is held that the amendment to sec. 40(a)(ia) permitting the deductor to remit the TDS to Government Account on or before the due under sec. 139(1) is retrospective, and therefore, applicable to the appellant for the A.Y. 2009-10. Consequently, the disal....

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.... of Central Government, the details of which are as follows: MONTH DUE DATE PF (Rs.) DATE OF PAYMENT ESI (Rs.) DATE OF PAYMENT May, 2008 20.06.2008 34,829 27.06.2008 9,889 27.06.2008 Jun, 2008 20.07.2008 32,950 25.07.2008 9,095 25.07.2008 Aug, 2008 20.09.2008 27,599 23.10.2008 7,963 23.10.2008 Sep, 2008 20.10.2008 24,753 Sep, 2008 7,254 23.10.2008 Total   1,20,131   34,201         Addition 1,54,332     9. The AR relied on the order of the CIT(A) and also on the judgement of Delhi High Court in the case of AIMIL Ltd. (supra) and also on the judgement of Himachal Pradesh Hi....

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....s and that they were not amenable to verification. The AO observed that a company of the assessee's stature would normally be expected to have regular suppliers of groceries like vegetable, meat, milk and such other products and it was not likely that the employees would go around buying these items from the roadside markets. The AO also observed that there were more than one entry of purchases of same items on a single day with each entry being less than Rs. 20,000. The AO held that since the assessee had incurred expenditure of Rs. 2,48,42,505 to meet the day to day needs of the business, a disallowance of 35% of this expenditure would meet the ends of justice. 13. On appeal the CIT(A) observed as under: "However, there are cert....