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TMI Blog2023 (3) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT DELHI ] we allow this issue in favour of the assessee. - ITA No.261/Del./2022 - - - Dated:- 2-2-2023 - Shri Shamim Yahya, Accountant Member And Shri Kul Bharat, Judicial Member For the Assessee : Shri Ruchesh Sinha, Advocate And Ms. Vaishali, Advocate For the Revenue : Shri Jitender Chand, Sr. DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee arises out of the order of ld. CIT (A)- 26, New Delhi dated 06.12.2021 and pertains to assessment year 2019-20. 2. The grounds of appeal taken by the assessee read as under :- 1) That CIT(A) is erred under the law while confirming the order as framed by CPC u/s 143(1) of the Act after making adjustment of impugned prima facie adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntribution towards PF ESI, the same has been deposited by the assessee before the due date for filing of ITR u/s 139 (1) of the Act. Ld. CIT (A) considered the issue and referring to a newly amended provision, he held that the deduction for the employees contribution towards ESI PF etc. will only be available if the amount is deposited before the date as specified in Clause 36 (va) of the Act and not before the due date for filing of return u/s 139 (1) of the Act. Therefore, he upheld the disallowance of Rs.12,17,302/-. 5. As regards issue of disallowance u/s 37 of the Act being interest on late deposit of TDS, ld. CIT (A) upheld the disallowance inter alia by referring the decision of ITAT, Mumbai Bench in the case of DNV GL AS (fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider the fact of the introduction of Section 2(24)(x) or in fact the other provisions of the Act. 52. When Parliament introduced Section 43B, what was on the statute book, was only employer s contribution (Section 34(1)(iv)). At that point in time, there was no question of employee s contribution being considered as part of the employer s earning. On the application of the original principles of law it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the disparate nature of the amounts, similarly. As discussed previously, the memorandum introduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-goings forming part of the assessees liability. These include liabilities such as tax liability, cess duties etc. or interest liability having regard to the terms of the contract. Thus, timely payment of these alone entitle an assessee to the benefit of deduction from the total income. The essential objective of Section 43B is to ensure that if assessees are following the mercantile method of accounting, nevertheless, the deduction of such liabilities, based only on book entries, would not be given. To pass muster, actual payments were a necessary pre-condition for allowing the expenditure. 53. The distinction between an employer s contribution which is its primary liability under law in terms of Section 36(1)(iv), and its liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees contributions- which are deducted from their income. They are not part of the assessee employer s income, nor are they heads of deduction per se in the form of statutory pay out. They are others income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT (Appeals) it is noticed that the disallowance made by the CPC, Bangalore in respect of interest paid by the assessee on delayed remittance of TDS placing reliance on the decision of the Jaipur Bench in the case of M/s. Govindam Clearing Agencies Pvt. Ltd. Vs. DCIT in ITA. No.701/JP/12019 dated 1.09.2020. On the other hand, we observe that the assessee placed reliance on the decision of the Kolkata Bench in the case of DCIT Vs. M/s. Narayani Ispat Pvt. Ltd., Kolkata (supra). On perusal of both the decisions of the Tribunal, we observe that there are divergent views on the issue. In our opinion, whether interest paid by the assessee on delayed remittances of TOS is allowable expenditure or not is certainly a debatable issue and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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