2015 (5) TMI 1156 - HC - Income Tax

Addition u/s 36(1)(va) r.w.s. 43B - default related to payment of provident fund (PF) - employer and employees contribution - there are further contributions viz. voluntary provident fund, employees state insurance corporation, group savings, linked insurance - Held that - Following the view taken therein, as also the law laid down by the Hon ble Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusions Limited 2009 (11) TMI 27 - SUPREME COURT , we dismiss this appeal insofar as this question is concerned. However, at the request of Mr. Malhotra and equally Mr. Jitendra Singh to obtain details of any pending appeals by the Revenue involving questions identical to Question No.6.2, stand over to 8th June, 2015.

Summary

Issues involved:
1. Determination of deductions towards Employees State Insurance Corporation and other contributions under section 36(1)(va) of the Income Tax Act, 1961.

Detailed Analysis:
1. The appeal addressed the issue of deductions related to Employees State Insurance Corporation and other contributions under section 36(1)(va) of the Income Tax Act, 1961. The appellant argued for a distinction between employees' and employer's contributions towards provident fund, emphasizing that certain contributions had been disallowed by the Assessing Officer. The Division Bench judgment dated 11th July, 2014, in Income Tax Appeal No.399 of 2012, partially answered the question regarding the provident fund payment against the Revenue. The appellant sought clarification on the determination of deductions for various contributions apart from provident fund payments.

2. The appellant presented a Division Bench judgment involving the same assessee, which supported the view that deductions should be allowed for payments made after the grace period, as the contributions were for the benefit of the employees. The judgment highlighted that contributions to provident fund, state insurance corporation, and other funds were intended to provide medical assistance and welfare benefits to employees. Referring to the Employees State Insurance Act, 1948, the judgment emphasized the benevolent nature of the legislation aimed at assisting employees in need. The court upheld the principle that such contributions were permissible deductions due to their employee welfare nature.

3. In line with the Division Bench judgment and established legal precedent, the court dismissed the appeal concerning the determination of deductions for contributions towards Employees State Insurance Corporation and other welfare funds. Citing the Supreme Court's decision in Commissioner of Income Tax vs. Alom Extrusions Limited (2009) 31 ITR 306, the court reaffirmed the importance of considering contributions made for the benefit of employees as legitimate deductions under the Income Tax Act.

4. The court acknowledged a request to gather information on pending appeals by the Revenue related to similar questions as raised in the appeal. As a result, the court decided to defer further proceedings to 8th June, 2015, to allow for the collection of relevant details concerning pending appeals involving identical issues to Question No.6.2, as raised in the case.