2014 (3) TMI 942 - HC - Income Tax

Allowability of deduction Delayed payment of PF & ESIC - Whether the Tribunal was right in upholding the payment of PF & ESIC made beyond due dates the filing of ROI are allowable as deduction Held that - The decision in Commissioner of Income-Tax vs. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT followed - Employer s contribution to such funds is decided in favour of assessee - employee s contribution is provident fund and ESIC is concerned the decision in Commissioner of Income-tax vs. Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT followed By deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub-section (1) of section 36 is deleted, which is with respect to employees contribution Decided partly in favour of Revenue.

Summary

Issues:
Delayed payments of provident fund and ESIC amounts - Employee's contribution vs. Employer's contribution.

Analysis:
The judgment dealt with the issue of delayed payments of provident fund (PF) and Employee State Insurance Corporation (ESIC) amounts. The court divided the issue into two parts based on the contributions - employer's and employee's. Regarding the employer's contribution, the court ruled in favor of the assessee, citing the Supreme Court judgment in the case of Commissioner of Income-Tax vs. Alom Extrusions Ltd. The court also referred to its own judgment in the case of Commissioner of Income Tax vs. JMC Projects (India) Ltd., where a similar decision was made. Consequently, the question was answered in favor of the assessee concerning the employer's contribution.

However, concerning the employee's contribution to PF and ESIC, the court decided against the assessee, citing the judgment in the case of Commissioner of Income-tax vs. Gujarat State Road Transport Corporation. The court provided a breakdown of the contributions available for the assessment year 1998-99, including PF employee's and employer's contributions, as well as ESIC employee's and employer's contributions. The total amount involved was Rs. 15,57,740. As a result, the court ruled in favor of the Revenue to that extent, answering the question against the assessee and in favor of the Revenue.

Consequently, the Revenue's appeal was allowed in part, and the judgment of the Tribunal was reversed only to the limited extent mentioned above. The case was disposed of accordingly, with the court providing a clear decision on the issues related to delayed payments of PF and ESIC amounts, distinguishing between employer's and employee's contributions.