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TMI Blog2020 (8) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 36(1)(va) of the Act. 2.2 Rival Contentions have been heard and records perused. The facts of the case in brief are that the assessee is a State Government Undertaking and engaged in the distribution and sale of electricity. The assessee filed the Return of Income for A.Y. 2007-08 on 29.10.2007 claiming unabsorbed depreciation/current year loss of Rs. 7,58,44,627/-. The case was selected for scrutiny and notice u/s 143(2) of the Act was issued on 25.09.2008. After hearing the assessee, the AO completed the assessment u/s 143(3) of the Act on 10.10.2006 and made the addition on account of amounts deposited in respect of employees contribution towards CPF, GPF and ESI which was alleged to be allowed. 2.3 By impugned order the ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESI is received by the assessee by way of deduction or otherwise from the salary/ wages of the employees, it will be treated as 'income' at the hands of the assessee. It clearly follows there from that if the assessee does not deposit this contribution with PF/ESI authorit ies, it will be tax as income at the hands of the assessee. However, on making deposit with the concerned authorit ies, the assessee becomes entitled to deduction under the provisions of s. 36(11)(va). Sec. 43B(b), however, stipulates that such deduction would be permissible only on actual payments. This is the scheme of the Act for making an assessee entitled to get deduction from income insofar as employees' contribution is concerned. Deletion of the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings recorded for AY 2006-07 where similar disallowance was made. For the sake of clarity, the relevant findings of the Hon'ble ITAT are reproduced as under:- "After hearing the parties we find that there is no dispute in the present case that the employees contribution to PF and ESI was paid before the due date of filing of return u/s 139(1) though after the statuary dates specified in the respective acts. This is supported by the decision of Karnataka High Court in case of CIT Vs. Sabari Enterprises 298 ITR 141, CIT Vs. P M Electronics 171 Taxman 1 (Delhi), Sunil Goel Vs. ACIT 118 TTJ 415 (Delhi) and also by the decision of this bench including the subsequent decisions dated 31-12-2008 and 13-02-2009 (supra) may also not that agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent to omission of second proviso to section 43B and insertion of the new proviso regarding allowance of any sum paid by him as an employer subject to payment before the due date of furnishing of the return should apply to section 36(1)(va) simultaneously. The reply of the assessee was not found acceptable by the AO. The AO was of the opinion that as per the provisions of section 2(24)(x) of the Act the same is an income of the assessee and can be allowed as deduction only, if such contributions was actually paid on or before due date mentioned in the relevant Act or Rules. In this case, the assessee made the above payments amounting to Rs. 19,73,42,499/- after the prescribed due date. Hence, it forms the taxable income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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