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TMI Blog2017 (2) TMI 1430X X X X Extracts X X X X X X X X Extracts X X X X ..... s 10A is not correct and hence, the addition made is deleted. In CIT vs. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] one of the issues before the Hon ble High Court was whether on the facts and in the circumstances of the case the Tribunal was justified in directing the A.O to exempt u/s 10A of the Act, on the assessed income which was enhanced due to disallowance of the employers as well as the employees contribution towards Provident Fund/ESIC. - Decided in favour of assessee. - ITA No. 1900/MUM/2015 Assessment Year: 2011-2012 - - - Dated:- 28-2-2017 - Shri Jason P. Boaz (AM) And Shri Ram Lal Negi (JM) Appellant by : Shri. Premchand J (DR) Respondent by : Shri. Farrokh V. Ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before the Tribunal on the following effective ground:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in holding that the assessee is entitled to claim deduction u/s 10A on the additions/disallowances made u/s 40(a) (ia) of the Income Tax Act. 3. Before us, the Ld. DR relying on the assessment order submitted that the Ld. CIT(A) wrongly allowed the deduction claimed by the assessee, therefore the impugned order is liable to be dismissed. 4. On the other hand the Ld. Counsel for the assessee submitted that the assessee s case is covered by the decision of Hon ble Jurisdictional High Court passed in CIT vs. Gem Plus Jewellery India Ltd. (2011) 330 ITR 175(B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble High Court was whether on the facts and in the circumstances of the case the Tribunal was justified in directing the A.O to exempt u/s 10A of the Act, on the assessed income which was enhanced due to disallowance of the employers as well as the employees contribution towards Provident Fund/ESIC. The Hon ble High Court decided the issue in favour of the assessee holding as under:- 11. For the purposes of the appeal it is necessary to refer to the admitted position which is that the assessee had deposited both the employer's and the employees contribution towards provident fund and ESIC, though beyond the due date including the grace period. The Assessing Officer added these payments to the total income of the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady noted, an add back by the Assessing Officer to the income. All profits of the unit of the assessee have been derived from manufacturing activity. The salaries paid by the assessee, it has not been disputed, relate to the manufacturing activity. The disallowance of the provident fund/ESIC payments has been made because of the statutory provisions-section 43B in the case of the employer's contribution and section 36(v) read with section 2(24) (x) in the case of the employees' contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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