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2021 (10) TMI 1256 - AT - Income TaxAddition u/s 36(1)(va) - delayed deposit of employees contribution of EPF and ESI but paid before the due date of filing of return - HELD THAT - It is an undisputed fact that though there has been delay in deposit of PF/ESI dues but it is also an undisputed fact that money collected from employees, have been deposited with the appropriate authorities before filing of return of income. Following the decision rendered in the case of Dee Development Engineers Ltd. 2021 (4) TMI 393 - ITAT DELHI and for similar reasons hold that no disallowance u/s 36(1)(va) of the Act is called for in the present case. I therefore direct the deletion of addition. Thus the ground of assessee is allowed.
Issues:
1. Disallowance under section 36(1)(va) of the Act for delayed deposit of employees' contribution of EPF and ESI. Analysis: The appeal was filed against the order of the Commissioner of Income Tax (Appeals) relating to the Assessment Year 2018-19. The primary issue revolved around the disallowance made under section 36(1)(va) of the Act for delayed deposit of employees' contribution of EPF and ESI. The assessee argued that despite the delay, all amounts had been deposited with the appropriate authorities before filing the return of income. The assessee relied on a Tribunal decision in the case of DCIT vs. Dee Development Engineers Ltd. to support their contention that no disallowance was warranted. The Revenue, on the other hand, supported the CIT(A)'s order and cited the decision of the Delhi High Court in the case of Bharat Hotels Ltd. The ITAT Delhi, after hearing the submissions and examining the records, noted that while there was a delay in depositing the PF/ESI dues, the amounts were indeed deposited before the filing of the income tax return. The ITAT referred to the decision of the Delhi Bench in the case of Dee Development Engineers Ltd., which had considered the decision of the Delhi High Court in the case of Bharat Hotels Ltd. The Tribunal in the aforementioned case had ruled in favor of the assessee, emphasizing the importance of actual payment for allowing expenditure. The ITAT highlighted the principle that in case of conflicting judgments, the one favoring the assessee should be applied. As there was no evidence provided by the Revenue to challenge the decision in the case of Dee Development Engineers Ltd., the ITAT ruled in favor of the assessee and directed the deletion of the addition under section 36(1)(va) of the Act. In conclusion, the ITAT allowed the appeal of the assessee, emphasizing that no disallowance under section 36(1)(va) of the Act was warranted in the present case. The decision was based on the precedent set by the Tribunal in the case of Dee Development Engineers Ltd., where the issue was resolved in favor of the assessee, highlighting the significance of actual payment for expenditure allowance.
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