TaxTMI 
TaxTMI 
2017 (7) TMI 1123
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....aw in holding that the payment of the employee's contribution towards EPF & ESI by the employer assessee, which is not in consonance with the explanation to section 36(1)(va) is entitled for deduction u/s 43B of the IT Act." 2. The AO has disallowed the PF contributions towards employees made by the assessee on the ground that the same were belatedly paid and were liable to be disallowed u/s 36(1)(va). 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and contended before the CIT(A) that though the employee contributions of PF were not paid within the permissible time under the respective act but was paid before the due date of filing of return. He further submitted that the ITAT in assessee's own....
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.... an exception in this regard. ■ Explanation to section 36(1)(va) provides that deduction shall be allowed in respect to the sum paid by the assessee to employee's account, in the relevant fund, on or before due date, i.e., such date by which assessee is required to credit employee's contribution in the relevant fund, under any Act, Rule, Order or Notification issued therein. In the instant case, due date, therefore, shall be the date mentioned in the 1952 Act or 1948 Act or Rules framed thereunder, etc. by which contributions were to be made. Admittedly as per due date under the relevant Acts, contributions were not paid by the assessee. Section 36(1)(va) talks of only employee's contribution and allow deduction i....
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....xes from his respective customers and claimed deduction only by making provisions in his books without actually remitting the amount to exchequer. To curb this practice, section 43B was inserted with effect from 1-4-1984, whereby mercantile system of accounting with regard to tax, duty and contributions to welfare funds stood discontinued. Now it became necessary for the assessee to account for the aforestated items, not onmercantile basis, but on cash basis. With effect from 1-4-1988 section 43B was again amended and a Proviso was inserted. It provided, inter alia, in the context of any sum payable by the assessee by way of tax, duty, cess or fee, if such an assessee pays such tax, duty, cess or fee even after closing of accounting year bu....
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....ld be entitled for deduction under section 43B. [Para 27] ■ From the aforesaid judgment of the Supreme Court, the Bench finds that irrespective of the fact that deduction in respect of sum payable by employer's contribution was involved, but the Court did not restrict observations, findings and declaration of law to that context but looking to the objective and purpose of insertion of section 43B applied it to both the contributions, whether by employer or employee. It also observed clearly that section 43B is with a non obstante clause and, therefore, over ride even if, anything otherwise is contained in section 36 or any provision of the Income-tax Act. ■ In view of the aforesaid, the assessee was entitle....