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TMI Blog2018 (8) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... ome tax return, thus eligible for benefit u/s. 43B of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). But the AO did not agree and he disallowed the same. On appeal, the Ld. CIT(A) deleted the addition by observing " it is evident from the facts of the instant case and the judicial pronouncements that employees contribution to PF amounting to Rs. 69,58,932/- was made before the due date of filing of return and, therefore, it is allowable expenditure." Aggrieved, revenue is before us. 4. We have heard both the parties and perused the records carefully. We note that the issue is squarely covered in favour of the assessee by the decision of Hon'ble Calcutta High Court in the case of CIT Vs. Coal India Ltd. in ITA 12 of 2015 dated 12.08.2015, wherein the Hon'ble High Court has observed as under: "It is submitted by Mr. Khaitan, learned senior advocate, appearing on behalf of the respondent that whether employees contribution to Provident Fund would call for deduction under Section 43B(b) of the Income Tax Act, 1961 came up for consideration in C.I.T. Circle- I, Kolkata vs. Vijay Shree Ltd.: 224 Taxman 12 [Cal.) wherein Court held that the amount paid for employees c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by the decision of coordinate bench of this Tribunal in similar case of DCIT Vs. M/s. Narayani Ispat Pvt. Ltd. in ITA No. 2127/Kol/2014 for AY 2010-11 dated 30.08.2017, wherein the Tribunal has observed as under: "7. We have heard the rival contentions of both the parties and perused the material available on record. In the instant case, AO has disallowed the interest expenses incurred by the assessee on account of late deposit of service tax and TDS after having reliance on the judgment of Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd. Vs. CIT (1998) (Supra). The relevant extract of the judgment reads as under : FACTS During the year under consideration, the assessee failed to pay advance tax equivalent to 75 per cent of estimated tax. The Assessing Officer levied interest under section 215 as well as under section 139. The assessee claimed that since taxes which were payable were delayed, the assessee's financial resources increased which were available for business purposes. Hence, the interest which was paid to the Government was interest on capital that would be borrowed by the assessee otherwise. Hence, the amounts should be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay in making the payment of service tax & TDS is compensatory in nature. As such the interest on delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon'ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : "The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question has also been considered by this Court in Civil Appeal No. 830 of 1979 titled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground no.5 of revenue's appeal for AY 2012-13 and thus the appeal of Revenue for AY 2012-13 also stands dismissed. 7. Now the remaining issue is only ground no. 5 of revenue's appeal for AY 2013-14, which is against the action of Ld. CIT(A) in allowing the expenses on account of truck operating. Briefly stated facts as observed by the AO are that during the year under consideration the assessee debited Rs. 1,26,05,952/- towards truck operating expense under the head "Other Expenses". According to AO, on perusal of details he found that the assessee incurred expense of Rs. 1,09,67,750/- out of Rs. 1,26,05,952/- by cash on account of salary to truck helpers. On being asked, assessee's explanations before the AO are as under: "The assessee company is having more than 125 numbers of Tippers of its own and they have engaged under for job work purpose under different principals at their different work places. Most of the work places are mines which are in remote/tribal areas. For operation of Tippers in addition to drivers one helper is required for supporting drivers for necessary activities. The manpower required for helper service generally available in local areas with making p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enough for the AO. Hence, the AO thought it to be appropriate to disallow 10% of Rs. 1,26,05,952/- which comes to Rs. 12,60,595/- and added back to total income of the assessee. Aggrieved assessee preferred an appeal before the Ld. CIT(A), who deleted the ad-hoc disallowance by observing as under: "I have considered the submission filed by the AR and the ratio decided by different judicial authorities. I find that the assessee's books of accounts are audited. The AO has not pointed out that books of account were not reliable. The AO has also not found that the expenses are not genuine and not relating to the business of the assessee. It is highly illogical to make ad hoc disallowance of 10% of Truck Operating Expenses when books of accounts are audited and the AO has allowed other expenses. Therefore, the appeal of the assessee in this ground is allowed." Aggrieved, revenue is before us. 9. We have heard rival submissions and gone through the facts and circumstances of the case. We note the books of the assessee are audited and the AO has not been able to point out any defect in the books maintained by the assessee. The AO has not rejected the books. In such a scenario, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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