2023 (8) TMI 1727

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....sed by the Assessing Officer (AO) under Section 154 of the Income Tax Act, 1961 (the Act) concerning AY 2019 20. 2. The captioned appeal relates to Assessment Years 2019-20 involving issue of disallowance of expenditure towards employees contribution to ESIC/PF under Section 36(1)(va) of the Act. 3. Briefly stated, the assessee is engaged in the business of man power supply and has filed the return of income declaring total income at Rs.35,44,240/-. The Assessing Officer passed an order under Section 143(1) assessing the total income at Rs.2,38,77,496/- by making adjustment on account of delay in deposit of PF/ESIC in relation to employee's contribution. 4. A disallowance of Rs.2,03,33,252/- was carried out on account of late depos....

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.... Employees Contribution Deposited Apr-18 May-18 2,18,836 15/06/18 29/05/18 2,18,836 May-18 Jun-18 2,15,484 15/07/18 29/06/18 2,15,484 Jun-18 Jul-18 2,34,231 15/08/18 29/07/18 2,34,231 Jul-18 Aug-18 2,38,812 15/09/18 28/08/18 2,38,812 Aug-18 Sep-18 2,52,724 15/10/18 30/09/18 2,52,724 Sep-18 Oct-18 2,46,580 15/11/18 30/10/18 2,46,580 Oct-18 Nov-18 2,49,940 15/12/18 29/11/18 2,49,940 Nov-18 Dec-18 2,51,648 15/01/19 28/12/18 2,51,648 Dec-18 Jan-19 2,72,139 15/02/19 30/01/19 2,72,139 Jan-19 Feb-19 2,82,405 15/03/19 28/02/19 2,82,405 Feb-19 Mar-19 2,81,404 ....

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....33,252 8. The ld. counsel thus submitted that in the light of the decision of the Co-ordinate Bench in the case of Sentinel Consultants P. Ltd. in ITAs No. 7 & 8/Del/2023 Assessment Year 2018-19 and 2019-20 order dated 12.06.2023, the matter should be remitted to the file of the Assessing Officer for satisfying itself about deposit of employees contribution well within time and for rectification of the intimation drawn under Section 143(1) of the Act. 9. Identical issue cropped up in the case of the Sentinel Consultants P. Ltd. (supra). The relevant observation of the Co ordinate Bench in the matter is reproduced hereunder: 9. We have carefully considered the rival submissions and perused the material available on record. The....

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....permits deduction of expenditure which is not in the nature of expenditure prescribed in Sections 30 to 36 of the Act and also not being in the nature of capital expenditure or personal expenses of the assessee. Thus, in view of such mandate of law, the deduction of expenditure under the general clause of Section 37(1) would not extend to expenditure specially covered within the ambit of Section 36(1)(va) of the Act. The Hon'ble Supreme Court in the case of Checkmate Pvt. Ltd. (supra) itself explains this position in Para 32 of the Judgment. Such view also draws support from the observations made in recent judgment of the Hon'ble Supreme Court in the case of Pr.CIT vs. Khyati Realtors (P) Ltd. (2022) 141 taxmann.com 461 (SC). The alternate ....