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TMI Blog2018 (5) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... or The Revenue : Shri K. Srinivas Reddy ORDER PER S. RIFAUR RAHMAN, A.M.: This appeal filed by the assessee is directed against the order dated 31st May, 2017 of CIT 1, Hyderabad, passed u/s 263 of the Act, for AY 2013-14. 2. Briefly the facts of the case are, assessee company, engaged in the business of manpower supply services, e-filed its return of income on 30/09/2013 admitting total income at ₹ 10,78,110/-, which was processed u/s 143(1) of the Income-tax Act, 1961 (in short the Act ) on 01/08/2014. Subsequently, the case was selected for scrutiny under CASS and notices u/s 142(1) and 143(2) were issued. In response to the notices, the assessee furnished the information as called for. 2.1 On exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated payment. 3.1 In compliance to the show cause notice, the assessee vide its reply dated 18/03/2017, inter-alia, stated that though the said amount paid belatedly by a few days, but all the relevant amounts were paid before due date of filing of return of income u/s 139(1) of the Act. Assessee relied on the decision of the Tribunal in the case of Tetra Soft (India) Pvt. Ltd. Vs. ACIT [2015] 40 ITR (Trib) 470. 3.2 The Pr. CIT after considering the submissions of the assessee, elaborately discussed the issue with various case law as well as Board Circular No. 22/2015, dated 17/12/2015 and directed to make the addition of ₹ 33,23,058/- u/s 2(24(x) of the Act out of the total belated payments of ₹ 48,59,869/-, as he allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: Section 36(1)(va) permits deductions in respect to relevant fund of employees. ■ Section 43B permits deductions otherwise allowable under the Income-tax Act in case any sum payable by the assessee is paid actually before the date of filing of return under section 139 and carves out an exception in this regard. ■ Explanation to section 36(1)(va) provides that deduction shall be allowed in respect to the sum paid by the assessee to employee's account, in the relevant fund, on or before due date, i.e., such date by which assessee is required to credit employee's contribution in the relevant fund, under any Act, Rule, Order or Notification issued therein. In the instant case, due date, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emitting the amount to Regional Provident Fund Commissioner, he would have claimed deduction as 'business expense' by merely making a provision to that effect in his books of account. A similar discrepancy was noticed in the context of sales tax where assessee collected the same and other indirect taxes from his respective customers and claimed deduction only by making provisions in his books without actually remitting the amount to exchequer. To curb thispractice, section 43B was inserted with effect from 1-4-1984, whereby mercantile system of accounting with regard to tax, duty and contributions to welfare funds stood discontinued. Now it became necessary for the assessee to account for the aforestated items, not mercantile basis, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) considered the intent, purpose and object in the historical back drop of insertion of section 43B and its progress by way of various amendments and held that when the contribution had been paid by the assessee towards provident fund, etc. prior to filing of return under section 139(1), the assessee would be entitled for deduction under section 43B. [Para 27] ■ From the aforesaid judgment of the Supreme Court, the Bench finds that irrespective of the fact that deduction in respect of sum payable by employer's contribution was involved, but the Court did not restrict observations, findings and declaration of law to that context but looking to the objective and purpose of insertion of section 43B applied it to both the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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