2018 (8) TMI 851

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.... is regarding disallowance of deduction under section 36(1)(va) of the Act towards Provident Fund and Employees State Insurance, while ground no.2 is against upholding of disallowance of Rs. 26, 000/- paid towards legal expenses. 3. Brief facts of the case are that the assessee has filed its return of income on 30.9.2013 declaring total income at Rs. 57, 96, 180/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. During the assessment proceedings, it was noticed by the AO that an amount of Rs. 5, 01, 183- received by the assessee from its employees towards employees' contribution to PF and ESIC has not been deposited by the assessee on or before the due....

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.... from any his employees to be credited to the employee's account in the relevant fund or before the due date provided in relevant Act. Therefore, these two sections are distinct and independent to each other and apply in different situations. The claim of the assessee falls within the ambit of section 36(1)(va) and the "due date" defined in the Explanation attached to this section for depositing the sum deducted from the salary of the employees with the relevant fund is the date provided relevant Act and not the due date as provided in section 139(1) of the Income Tax Act. Revenue authorities have considered this position of law and disallowed the deduction. Further, in number of similar cases, Tribunal has consistently dismissed such claim....

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....ohibited by the law, cannot be disallowed. The AO did not accept this submission of the assessee and held that since legal expenses claimed by the assessee has an element of breach of law, therefore, the same was penalty and not allowable under section 37. Aggrieved assessee went in appeal before the ld.First Appellate who also concurred with the finding of the AO and confirmed addition. Assessee is now before the Tribunal. 7. Before us also the assessee reiterated submissions as were made before the Revenue authorities below. She further contended that in the claim of the assessee there is no element of penalty. It was an expenditure motivated by commercial purpose and would be eligible for deduction under section 37(1) of the Act. She ....