2015 (9) TMI 1040 - AT - Income Tax

Employees contribution to PF and ESI - failure to deposit before due date - applicability of section 43B read with section 2(24)(x) - Held that - This issue is covered against the assessee by the decision in the case of CIT Vs. Gujarat State Road Transport Corporation, reported in (2014 (1) TMI 502 - GUJARAT HIGH COURT). Disallowance of provision for Cess on royalty - as per assessee he has reversed the provision in the subsequent year and offered the same amount, therefore, if the addition is sustained in this year, then suitable direction may be given in the other year wherein this provision is reversed - Held that - The assessee has not filed any supporting document in support of his contention that the provision is reversed in the subsequent year and the income is offered. He has not even mentioned the assessment year in which the provision is reversed. In the above circumstances, we decline to issue any direction so far as the other year is concerned. However, the assessee will be at liberty to put up the proper claim in the year in which the provision is reversed and the income is offered. With this remark, we sustain the addition - Decided against assessee. Disallowance of credit for TDS - AO did not allow the credit of TDS on the ground that the tax has been deducted on the rent received by the assessee - Held that - The identical issue is considered by the ITAT Mumbai Bench in the case of the assessee for Assessment Year 2007- 08 2012 (5) TMI 138 - ITAT MUMBAI wherein the ITAT directed the Assessing Officer to allow the credit for the Tax Deducted at Source As per section 199 any deduction made in accordance with the foregoing provisions of Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made and credit shall be given to him for the amount so deducted for the assessment year for which such income is assessable - Decided in favour of assessee.

Summary

Issues:
1. Deduction of Employees' Contribution to Provident Fund
2. Disallowance of provision for Cess on royalty
3. Credit for TDS of rent received

Deduction of Employees' Contribution to Provident Fund:
The appeal was against the order of the Ld. Commissioner of Income-tax(Appeals) regarding the deduction of Employees' Contribution to Provident Fund. The appellant company was denied the deduction as the contribution was deposited beyond the prescribed time limit under the Provident Fund Act. The appellant admitted that the issue was covered against them by a decision of the Hon'ble Jurisdictional High Court. The Tribunal rejected the appeal in line with the High Court's decision.

Disallowance of provision for Cess on royalty:
The appeal challenged the disallowance of a provision for Cess on royalty made by the Assessing Officer. The provision was created during the relevant accounting year but was later reversed and offered to tax in the subsequent year as the Cess was not required to be paid. The Tribunal found that the disallowance was justified as there was ultimately no liability of Cess on the royalty. The appellant's request to avoid double taxation on the same income in the subsequent year was declined due to lack of supporting documentation. The addition made by the Assessing Officer was sustained.

Credit for TDS of rent received:
The issue revolved around the denial of credit for TDS on rent received by the appellant. The Assessing Officer disallowed the credit as the rent was not offered as income. However, the Tribunal referred to a similar case where credit for TDS was allowed by considering the year in which the income was assessable to tax. Following the precedent, the Tribunal directed the Assessing Officer to allow the credit for TDS of the specified amount. The appeal was partly allowed in this regard.