2015 (6) TMI 1244 - AT - Income Tax

Disallowance u/s 10B - assessee as not eligible for deduction on entire receipts - CIT (A) following the decision in assessee s own case, allowed the ground of the assessee and directed the AO to recompute the deduction u/s 10B - HELD THAT - We have heard the rival submissions and perused the material on record. After going through the order of the CIT (A), we find that this issue is already decided in favour of the assessee by the Tribunal in assessee s own case for assessment year 2007-08 and the same was followed by the CIT (A) in assessment year 2009-10 and in this relevant assessment year. In this view of the matter, we do not find any infirmity in the order of the CIT (A) and we uphold the same. It is ordered accordingly. Ground No.1 is rejected. Deduction of payment of employees contribution towards provident fund and ESI - HELD THAT - We find that this issue is covered in favour of the assessee by the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. AIMIL Limited, 2009 (12) TMI 38 - DELHI HIGH COURT and also the Hon'ble Supreme Court in the case of CIT vs. Vinay Cements Limited 2007 (3) TMI 346 - SC ORDER - Deduction of payment of employees contribution towards provident fund and ESI cannot be disallowed under section 43B, if paid before the due date of filing the return. In view of this fact, we reject this ground.

Summary

Issues:
1. Challenge to deletion of disallowance under section 10B.
2. Disallowance of payment delay under section 36(1)(va) read with 2(24)(x).

Issue 1: Challenge to deletion of disallowance under section 10B:

The appeal was filed against the order of the Commissioner of Income-tax (Appeals) concerning the assessment year 2010-11. The Assessing Officer reduced the deduction claimed under section 10B by Rs. 63,75,900, contending that the assessee was not eligible for the deduction on entire receipts, specifically related to international recruitment services. The CIT (A) allowed the appeal on both issues, following previous Tribunal decisions favoring the assessee. The Tribunal upheld the CIT (A)'s decision, citing consistency with previous favorable rulings for the assessee. The Tribunal found no infirmity in the CIT (A)'s order and rejected the revenue's challenge.

Issue 2: Disallowance of payment delay under section 36(1)(va) read with 2(24)(x):

The Assessing Officer disallowed Rs. 1,52,619 under section 36(1)(va) due to delayed payment of employees' contributions to EPF/ESI. The assessee argued that the amount was paid before the due date for filing the income tax return, citing relevant judicial pronouncements. The CIT (A) deleted the disallowance based on the judgment of the jurisdictional High Court, holding that payments made before the income tax return due date were eligible for deduction. The Tribunal concurred with the CIT (A) and the judicial precedents, emphasizing that the deduction for employees' contribution towards provident fund and ESI cannot be disallowed under section 43B if paid before the return filing due date. Consequently, the Tribunal dismissed the revenue's appeal.

In conclusion, the Tribunal upheld the decisions of the CIT (A) on both issues, emphasizing consistency with previous favorable rulings and judicial interpretations. The appeal of the revenue was ultimately dismissed, affirming the deletion of disallowances under sections 10B and 36(1)(va) based on legal precedents and statutory provisions.