TaxTMI 
TaxTMI 
2011 (8) TMI 1309
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....ting the addition of `27,856/- on account of delayed payment to employee's contribution to P.F. following the decision of the Apex Court's decision in the case of Vijay Cement Ltd., 213 CTR 268 (SC) on the ground that the contribution towards P.F. has been made within the due date of filing return of income in terms of section 43B of the4 act. The ld. CIT(A) erred in not appreciating the fact that the provisions section 43B applied to employer's contribution and have no roll in deciding the issue of allowability of employees' contribution which is governed by section 36(1)(va) r.w.s. 2(24)(x) of the Act. 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T. Act, 1961 dated 04/04/2007 wer....
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....as argued that provisions of section 43B of the I.T.Act are general provisions as against that the provisions of section 36(1)(va) are special provisions, therefore, prevail over the general provisions. Since the amount in question is employees' contribution, therefore, the special provisions should apply and the amount should have been paid within the due date as prescribed. Since the payments were made belatedly, therefore, it was rightly disallowed by the Assessing Officer, he has concluded. 4. We have heard the submissions of ld.DR, however, we are governed by a decision of Hon'ble Supreme Court pronounced in the case of CIT vs. Alom Extrusions Ltd. (319 ITR 306) [SC]. Moreover, in a latest decision this controversy has been deal....
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....n'ble Court observed that earlier under the second proviso to section 43B as amended by the Finance Act, 1989, the assessees were entitled to deduction only if the contribution stood credited on or before the due date given in the Provident Funds Act. This created further difficulties and on a representation made to the Finance Ministry, one more amendment was made by the Finance Act, 2003. Though this amendment was made applicable with effect from April 1, 2004, the amendment was curative in nature and applied retrospectively with effect from April 1, 1988.It was clarified that when a proviso in a section is inserted to remedy unintended consequences and to make the section workable, the proviso which supplies an obvious omission therein i....
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....le High Court while considering whether the benefit of s. 43B can be extended to employees' contribution as well, which are paid after the due date under the PF law but before the due date for filing the return, held that (i) Though the Revenue has argued that a distinction is to be made between "employers' contribution" and "employees' contribution" and that employees' contribution being in the nature of trust money in the hands of the assessee cannot be allowed as a deduction if not paid on or before the due date specified in the PF etc law, the scheme of the Act is that employees' contribution is treated as income u/s 2 (24) (x) on receipt by the assessee and allowed as a deduction u/s 36 (1) (va) on making deposit with the conc....
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....dings of the ld. CIT(A) and consequently, direct the AO to allow payment made on account of employees' contribution towards PF & ESI on or before the due date of filing of the return u/s 139(1) of the Act. With these directions, ground nos. 1 & 2 in the appeal are allowed." 5. Respectfully following the aforesaid decision, we find no force in this ground of the Revenue, therefore, Revenue's first ground is dismissed. 6. Ground No.2 reads as under: "2. On the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) erred in deleting the addition on account of disallowance of depreciation of `4,70,305/-, interest on vehicle loan of `87,056/- and, insurance premium on vehicle of `11,769/- without appreciating ....