2022 (7) TMI 381 - AT - Income Tax

Addition u/s 43B - addition for other liabilities standing in the balance sheet as on the close of the year for want of proof of payment of said liabilities before the due date of filing return of income - HELD THAT - As on going through the above finding of this Tribunal and also the balance sheet as on 31.03.1994 find merits in the contention of the ld. Counsel for the assessee. Ld. CIT(A) erred in confirming the addition for additional sales-tax and central sales-tax u/s. 43B of the Act because both these amounts were not on account of liability for the year under appeal and they were brought forward balance of other liabilities from AY 1992-93. Thus, both the additions are deleted. Ground no. 1 of the assessee is allowed. Unpaid tax liabilities u/s. 43B - As current year sales tax realization of Rs. 9,76,402/-, only a sum of Rs. 34,207/- remains due to have been paid before the due date of filing the return of income which attracts the provisions of Section 43B of the Act. Out of the alleged addition except the sum of Rs. 34,207/- the balance is either brought forward balance from preceding years which have already been considered in the previous assessment year and remaining already stands paid which do not call for invoking the provisions of Section 43B on such amount. Therefore, out of impugned addition we delete the addition and confirm the remaining addition for unpaid tax liabilities u/s. 43B of the Act. Thus, ground no. 2 is partly allowed. Addition on account of agricultural tax - HELD THAT - As per paper book we find that the said amount has been paid on 30.04.1995 and this fact remains uncontroverted. We, therefore, delete the addition of Rs. 556/- made u/s. 43B of the Act and allow ground no. 3 raised by the assessee. Disallowance of employees' contribution towards PF ESI u/s. 36(1)(va) r.w.s. 43B of the Act pertaining to March, 1995 - HELD THAT - Though there is a delay in deposit by 10 days as it has been paid on 24.04.1995, but both the lower authorities denied the deduction alleging that the same has not been paid as per the due date prescribed in the PF ESI Act. However, this fact is not in dispute that the alleged amount has been paid before the due date of filing return of income u/s. 139(1) of the Act and as per the consistent view taken by Hon'ble Courts and also jurisdictional in the case of CIT vs. Vijay Shree Ltd. 2011 (9) TMI 30 - CALCUTTA HIGH COURT we find that no disallowance for the said amount was called for. We, therefore, delete the addition u/s. 43B of the Act - Appeal of assessee allowed.

Summary

Issues:
1. Interpretation of provisions of sec. 43B for adding statutory liabilities to income.
2. Challenge of addition of State sales-tax liability u/s. 43B.
3. Addition of agricultural tax under sec. 43B.
4. Disallowance of employees' contribution towards PF & ESI under sec. 36(1)(va) r.w.s. 43B.
5. Applicability of amendments in secs. 36(1)(va) and 43B of the Act.
6. General grounds raised by the appellant.

Detailed Analysis:
1. The appeal involved a challenge regarding the invocation of provisions of sec. 43B to add statutory liabilities to the appellant's income. The appellant argued that the liabilities were carried forward from earlier years and did not accrue or were paid during the relevant financial year. The Tribunal noted that certain liabilities were brought forward balances from the previous financial year and had already been assessed in past years. The Tribunal allowed the appeal on this ground, deleting the additions made for additional sales-tax and central sales-tax as they were not liabilities for the year under appeal.

2. The issue of the addition of State sales-tax liability u/s. 43B was also raised. The Tribunal examined the details of the liabilities, payments made, and the balance remaining unpaid. It was found that a significant portion of the alleged addition was either brought forward balances or had already been paid, which did not warrant invoking sec. 43B. The Tribunal partly allowed this ground, deleting a portion of the addition and confirming the remaining amount for unpaid tax liabilities.

3. The addition of agricultural tax under sec. 43B was challenged, with the appellant providing evidence of payment. The Tribunal, finding the payment date undisputed, deleted this addition, ruling in favor of the appellant on this ground.

4. The dispute regarding the disallowance of employees' contribution towards PF & ESI under sec. 36(1)(va) r.w.s. 43B was addressed. Despite a delay in deposit, the Tribunal noted that the amount had been paid before the due date of filing the return of income. Citing precedents and consistent views, the Tribunal deleted this addition, allowing the appellant's appeal on this issue.

5. The appellant also raised concerns about the interpretation and applicability of amendments in secs. 36(1)(va) and 43B of the Act. The Tribunal clarified the retrospective effect of the amendments and their prospective application from a specific assessment year, ruling in line with jurisdictional decisions.

6. General grounds raised by the appellant were briefly addressed, with certain grounds needing no adjudication. The Tribunal ultimately partly allowed the appeal, providing relief to the appellant on specific issues while dismissing others.

This detailed analysis highlights the Tribunal's thorough examination of each issue raised in the appeal, considering legal provisions, evidence, and precedents to arrive at a reasoned decision in favor of the appellant on certain grounds while upholding aspects of the lower authorities' decisions on others.