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2015 (10) TMI 308

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..... e due date, we find no reason to interfere with the order of CIT(A) - Decided against assessee. - I.T. A. No. 852/AHD/2011 - - - Dated:- 19-9-2014 - SHRI ANIL CHATURVEDI SHRI KUL BHARAT, JJ. For the Appellant : Shri N. B. Shah, A.R. For the Respondent : Shri B.L. Yadav, Sr. D.R ORDER Per: Anil Chaturvedi: 1. This appeal of the Assessee is against the order of CIT(A)-VI, Ahmadabad dated 04.10.2010 for A.Y. 2006-07. 2. The facts as culled out from the material on record are as under. 3. Assessee is a company stated to be engaged in the business of manufacturing of Humidification Plant for Industrial Unit. Assessee filed its return of income for A.Y. 2006-07 on 28.12.2006 declaring total income of Rs. Nil. Th .....

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..... iii) Smartchem Technologies Ltd. Vs. ITO 99 TTJ 918 (Ahd) iv) Sai Consulting Eng. P. Ltd. Vs. DCIT ITA No. 2262/Ahd/2007 (Ahd) 4. The registry has informed that there has been delay in filing the appeal by 76 days. Before us, Assessee has requested for condonation of delay and has stated the reasons in its letter dated 5th March, 2011 filed along with the appeal. After considering the explanation furnished by the Assessee in the aforesaid letter, the delay is condoned and the appeal is admitted for hearing. 5. During the course of assessment proceedings, A.O noticed that Assessee has deposited the employees contribution of provident fund after the due date prescribed under the relevant Act. He was therefore of the view that .....

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..... to employee's contribution. It is not in dispute that for employee's welfare, both employee and employer contribute. Employer's contribution is allowable as deduction only if the same is paid before the due date of filing the return. However, employee's contribution is treated as income u/s 2(24) (x) and the same is allowed as expense if it is paid within due date provided in PF.Act. If the payment is not made within due date then the expenses is not allowable u/s 36(1)(va). Since, the employee's contribution is allowable only when the payment is made within due date mentioned in PF.Act., the same becomes disallowable if payment is made after due date and accordingly, the sec. 43B cannot be applied. Therefore, mixing emp .....

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..... ection 43B. On the issue of Rule of interpretation of statute, there are several decisions holding the view that there should be harmonious construction while interpreting statute. Some of this are- 1-Assam co. Ltd vs state of Assam and others, 248 ITR 567 (SC) 2-LIC of India vs CIT, 219 ITR 410 (SC) 3-CIT vs S E Upper Sileru , 152 ITR 752 (AP) If the above rational and logic is followed, there is no confusion over applicability of the correct provision to employee's contribution. In view of the clear provisions and legislative intent, the employee's contribution is allowable only if the same is paid within due dates under P.F. Act or other relevant Act. Since, there has been delay in payment for the empl .....

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..... beyond the due dates prescribed under the relevant Acts. The Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation in ITA No 637/AHD/2013 has held as under:- any sum with respect to the employees contribution as mentioned in s. 36(1)(va), assessee shall be entitled to the deduction of such sum towards the employees contribution if the same is deposited in the accounts of the concerned employees and in the concerned fund such as Provident Fund, ESI Contribution fund, etc provided the said sum is credited by the assessee to the employees accounts in the relevant fund or funds on or before the due date under the Provident fund Act, ESI Act, Rule, Order or Notification issued thereunder or under any St .....

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