2010 (12) TMI 771 - HC - Income Tax

Deduction - Under Section 36(1)(va) read with Section 43B - Late deposits of payment of EPF - the issue raised herein stands answered in favour of the assessee and against the Revenue by the Supreme Court in Commissioner of Income Tax v. Alom Extrusions Ltd. 2009 -TMI - 35073 - SUPREME COURT - Decided in favour of assessee.

Summary

Issues:
1. Deduction under Section 36(1)(va) read with Section 43B for late EPF deposits.
2. Reliance on judgment of Supreme Court in Allied Motors case.

Analysis:
1. The first issue pertains to the deduction under Section 36(1)(va) read with Section 43B for late deposits of EPF. The appellant, the Revenue, challenged the order of the Income Tax Appellate Tribunal (ITAT) allowing the claim of deduction under these provisions. The respondent-assessee had filed its return for the relevant assessment year showing a net loss, but the assessing officer disallowed a certain amount under Section 36(1)(va) read with Section 43B. The Commissioner of Income-tax (Appeals) confirmed part of the disallowance. However, the Tribunal, in its order dated 24.8.2006, deleted the additions made by the assessing officer and upheld by the CIT(A). The High Court noted that the issue had been settled in favor of the assessee by the Supreme Court in Commissioner of Income Tax v. Alom Extrusions Ltd. and by the High Court itself in a previous judgment. Consequently, the substantial questions of law were answered against the Revenue and in favor of the assessee. As a result, the Income-tax Appeals filed by the Revenue were dismissed, and the appeal filed by the assessee was allowed.

2. The second issue revolves around the reliance on the judgment of the Hon'ble Supreme Court in the case of Allied Motors (P) Ltd. v. CIT. The Revenue questioned the ITAT's reliance on this judgment, arguing that it was not applicable to the present case. However, the High Court did not delve into this issue specifically in the detailed analysis provided. The judgment primarily focused on the first issue concerning the deduction under Section 36(1)(va) read with Section 43B for late EPF deposits. The High Court's decision was based on the settled law as laid down by the Supreme Court and the High Court itself in previous judgments, leading to the dismissal of the Revenue's appeals and the allowance of the assessee's appeal.

In conclusion, the High Court, comprising Mr. Justice Adarsh Kumar Goel and Mr. Justice Ajay Kumar Mittal, dismissed the Revenue's appeals and allowed the assessee's appeal, emphasizing the settled legal position on the deduction for late EPF deposits under Section 36(1)(va) read with Section 43B.