2000 (12) TMI 875 - AT - Income Tax

Summary

Issues: Disallowance under section 43B and addition under section 2(24)(x) read with section 36(1)(va) for assessment year 1992-93.

Disallowance under section 43B:
The Department appealed against the Commissioner of Income-tax (Appeals) order regarding the disallowance under section 43B and addition under section 2(24)(x) read with section 36(1)(va). The Department contended that the Assessing Officer found irregularities in provident fund deposits at two tea estates in Assam, leading to the disallowance. The Departmental Representative argued in support of the Assessing Officer's decision. On the other hand, the Authorised Representative highlighted that the tea estates were in remote areas of Assam and operated under the Assam Tea Plantations Provident Fund Scheme. The representatives argued about the authority of managers/superintendents to handle provident fund matters due to the estates' remote location and the necessity to keep substantial amounts for advances and settlements. The Tribunal observed that the standing order of the Provident Fund Control Officer authorized the estate managers to act on behalf, and there was no misutilization of the provident fund collection, leading to the conclusion that the disallowance under section 43B was not applicable.

Addition under section 36(1)(va):
The Departmental appeal also challenged the addition under section 36(1)(va). The Assessing Officer had referred to section 2(24) and section 36(1)(va) of the Income-tax Act, along with the Explanation below section 36(1)(va), regarding the due date of depositing contributions. The Authorised Representative argued that the prevailing rules of provident fund schemes of other states should not apply due to the remote location of the tea estates. The Tribunal noted that the appellant had to use personal funds for advances or settlements when there were no funds in the provident fund accounts after transactions. Consequently, the Tribunal found that the addition under section 36(1)(va) was not sustainable in law. The order of the Commissioner of Income-tax (Appeals) was upheld, and the Department's appeal was dismissed.