9911796707
TMI Blog2004 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ud the Revenue. In the present case, the details of such payment have been duly recorded which are compiled at pp. 127 to 153 of the paper book. In respect of each payment, there is a voucher wherein the details of import and export, number of containers, rate at which the payment is calculated, etc. have been mentioned. However, as mentioned above, 5 per cent has been added and Rs. 500 have been further added in respect of each shift. The assessee, apparently, is not in a position to establish that actually the payment has been made to the extent indicated in these vouchers. Considering the totality of facts and circumstances and the various cases cited before us and also the Tribunal's decision in the case of NDSTC, in our view, it would be fair and reasonable to disallow, on estimate basis, 25 per cent of the expenditure incurred by way of payment of 'speed money'. It is assumed that to that extent the payment was not made and this amount was appropriated by the assessee-company for its own purposes. The AO is directed to allow consequential relief to the assessee. In our view, the liabilities which are reflected as payable in the books of the assessee clearly fall i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate these funds and the same has to be brought to the charge of tax in the hands of the assessee. The receipts/collections have been made by the assessee-company during the course of its normal business activity and accordingly, as already mentioned above, they are in the nature of revenue receipts right from the very beginning. Against these receipts, the claim is that certain expenses are to be payable in future. If such expenses are never paid and the assessee has no record to substantiate that such expenses are actually payable in future, ultimately the surplus is going to remain with the assessee and for all practical purposes, it has to be treated as assessee's income chargeable to tax under s. 28(iv) of the IT Act. It is true that in the various judicial pronouncements relied upon by the learned CIT-Departmental Representative, the surpluses or liabilities were credited by the assessee to the P L a/c. In the case of the assessee, no such credit has been made to the P L a/c and the amounts are still reflected on the liabilities side of the balance sheet. However, the issue has to be decided on the basis of the real state of affairs and the character and nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed and the Departmental appeal is dismissed. - HON'BLE T.K. SHARMA, JUDICIAL MEMBER AND K.K. BOLIYA, ACCOUNTANT MEMBER For the Appellant : K.L. Maheshwari, Adv. For the Respondent : Y.P. Trivedi, Arati Vissanji and Ajit Shah, Advs. ORDER K.K. Boliya, Accountant Member 1. These three appeals are disposed of by this common order as under: Appeal No. 436: 2. This assessee's appeal arises from the order dt. 28th March, 2003 of CIT(A)-VIII, Mumbai. The first issue pertains to confirmation by the learned CIT(A) of an addition of Rs. 50,60,127 made by the AO by disallowing expenditure incurred on payment of 'speed money' to the workers of port trust. The relevant facts may first be stated. The assessee-company is the Indian agents for APL Shipping Lines, which is a fully owned company of Neptune Orient Lines Ltd. (NOL). The assessee-company was incorporated on 13th Nov., 1992 and commenced business on 7th Dec, 1992 in the name of India Trident Maritime (India) (P) Ltd. with shareholding to the extent of 51 per cent held by ITS Investments (P) Ltd. and to the extent of 49 per cent by Mr. V.S. Puri on behalf of Samrat group. Subsequently, the name of the assessee-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in the return of income filed by the assessee for the block period, as mentioned above, the aforesaid disclosed income was not declared and it was claimed that it was a genuine expenditure incurred for the purposes of business and was allowable. It was clarified that the income was offered on account of some misunderstanding or misconception. The AO verified the payments on the basis of the vouchers and the correct quantum was determined at Rs. 50,60,127. The AO disallowed and added the aforesaid amount, reasons for which have been summarized by the AO at p. 11 of his order as under: (a) Firstly, whether these payments have indeed been made to those labourers in reality is not evident. If so, then whether full amounts, as debited have been paid to them is questionable. There is nothing to ascertain the same, as assessee expressed its inability to produce any evidence with regard to the payments made to JNPT labour. So, in absence of any evidence to substantiate the claim of the assessee, such expenses have to be treated as bogus and disallowed. (b) Neither the recipients of these amounts nor their confirmations have been produced with respect to these payments. So, the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing on behalf of the assessee, opened up his arguments by forcefully submitting that in the statement recorded during the course of search, it was categorically confirmed that these payments were actually made by the assessee-company as business necessity. In the detailed interrogation of the concerned persons during the course of search, it was never admitted by any of them that the payments were either unexplained or not genuine. The entire payment is supported by internal vouchers duly prepared by the staff of the assessee-company. In the very nature of things, the receipts could not be obtained from the workers or the labourers and, therefore, the employee himself signed the vouchers as recipients as cash was handed over to such employee for disbursement to the dock workers. The learned counsel contended that if such 'speed money' had not been paid to the dock workers, it would have resulted in further substantial expenditure at the cost of the assessee-company in the form of charges payable to JNPT for allowing detention of ships at the port. It is, therefore, submitted that the 'speed money' has to be paid for quick loading and unloading of ships. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made to any Government employees in violation of the law. The view appears to be more of a surmise or conjecture rather than based on any acceptable evidence. We are also not able to subscribe to the submission made before us by the learned Departmental Representative that by making the workers forgo their lunch or by making them work beyond normal hours, the assessee was guilty of violation of public policy. If the workers, for an extra payment, are willing to skip lunch or to work beyond normal working hours, we are unable to see or appreciate what threat to public policy is involved. After considering the issue in great detail, the Tribunal deleted the addition and the learned counsel for the assessee contended that the issue is fully covered by the aforesaid finding of the Tribunal in similar facts and circumstances. The view adopted by the Tribunal in the above case for the asst. yr. 1987-88 was followed by other Benches of the Tribunal vide their orders as under: (i) Order dt. 19th Dec., 2001 in ITA No. 9205/Bom/1991 (asst. yr. 1988-89) and ITA No. 8826/Bom/1992 (1989-90) (ii) Order dt. 2nd March, 2000 in ITA No. 4807/Bom/1994 for the asst. yr. 1991-92. 7. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture is nowhere debited in the P L a/c of the assessee and, therefore, there is no question of any disallowance. It is also contended that the Tribunal, in the case of NDSTC has already held that the expenditure cannot be said to be illegal or opposed to public policy. In this connection, it is further submitted that the dock labourers and workers are not Government employees and, therefore, any payment made to them by way of incentive for increasing their efficiency, such payment cannot be said to be opposed to public policy. The learned counsel invited our attention to the Supreme Court decision in the case of Visakhapatnam Dock Labour Board vs. Stevedores Association AIR 1970 SC 1626. A copy of the judgment has been filed. In this case, it was held by the Hon'ble Supreme Court that the dock labour workers could not be considered to be the employees of the Dock Labour Board. Shri. Y.P. Trivedi concluded his arguments by forcefully submitting that the learned CIT(A) was wholly unjustified in confirming the uncalled for addition made by the AO. 9. Shri K.L. Maheshwari, the learned CIT-Departmental Representative supported the orders of the Revenue authorities. He invited our a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speed money' at various ports. Shri Maheshwari also contended that such payments are against the rules and regulations of JNPT and are not permitted by them. Therefore, the payments are opposed to public policy and are in the nature of illegal payments. It is, therefore, forcefully argued that the Explanation under s. 37 is applicable and the payments are not allowable. 10. Shri Maheshwari has also invited our attention to the discussion contained at pp. 226 and 227 of the book titled Techniques of Investigation for assessment by the IT Department'. Para 11.2 at p. 227 may be reproduced below: For the stevedoring work, labour is required to work on board the ship. Machineries like cranes, forklift, loaders, etc., are also required, depending on the nature of cargo. Besides, expenditure like port/customs overtime charges, launch hire charges, barge hire charges are also incurred by the stevedoring agent. For performing the stevedoring work, a license is required from the port authorities. The stevedoring agents are required to hire gangs of labour from the Dock Labour Board to lift the cargo from the ship to the jetty, or vice-versa. Labour charges are paid at prescribed rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure. The amendment has been effected in order to clarify that no allowance shall be made in respect of expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law. This results in disallowance of the claim made by certain taxpayers to deduction of payments on account of protection money, extortion, hafta, bribes, etc., as business expenditure. Held accordingly, that the secret commission paid by the assessee to procure business was not deductible under s. 37. 13. We have given a very careful consideration to the rival submissions made before us by both the parties and have gone through the facts as also the precedents cited before us. In our view, nothing much turns on the statements recorded during the course of the search. We have gone through the statements and we find that the persons categorically confirmed that payment of 'speed money' was required to be made for efficient conduct of the work of loading and unloading ships and such payment was actually made. During the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 122 of the paper book is a sheet of paper wherein the scale of payment is indicated. This, by and large, matches with the scale of payment indicated in the Economic Times referred to above. However, in the vouchers, 5 per cent has been added and some lump sum payment of Rs. 500 against each shift are shown as given to the shift-in-charge. The vouchers, as mentioned above, are prepared by one of the employees of the assessee-company and the same employee has signed the vouchers as recipient. It may also be mentioned that some of the payments have been made as sundry payments. Admittedly, all the payments are in cash and acknowledgement from the actual recipients are not available even in a single case. The Andhra Pradesh High Court, in the case of Transport Corporation of India Ltd observed that if the vouchers are signed only by the employees of the assessee and not by the actual recipient, any number of such vouchers could be produced by the assessee to defraud the Revenue. In the present case, the details of such payment have been duly recorded which are compiled at pp. 127 to 153 of the paper book. In respect of each payment, there is a voucher wherein the details of import and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reflected in the additions made by the AO, details of which have already been given above. It was explained by the assessee that the entire freight collections are deposited in the bank account of the principals maintained in India. However, the collections on account of THC and detention charges as also collections for brokerage and FAC are deposited separately in the bank account in the name of the assessee-company, as per the Reserve Bank of India (RBI) guidelines. It was claimed that these accounts are operated by the assessee only on behalf of the principals and the amount deposited therein are used only for meeting various expenditure on account of brokerage, FAC, THC and detention charges which are payable on behalf of the principals. This was a system followed by the assessee in the pre-merger period, i.e., before February, 1998. In the post-merger period, i.e., after February, 1998, the account of the principals including the bank balance held by the assessee on behalf of the principals formed part of the books of account of the assessee. However, at the end of the relevant year, the balance lying in these bank accounts are brought into the books of the assessee by credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled before the AO, which have been reproduced at pp. 19 to 21 of the AO's order. 16. The AO has elaborately considered the facts and the explanations of the assessee at pp. 22 to 29 of his order. Regarding the liability on account of brokerage, which stood at Rs. 1,11,38,558 on the date of search, the AO has mentioned that this liability has remained almost static till the date of completion of the assessment order and neither any amount was paid by the assessee to any brokers nor any part of it was remitted to the principals. As mentioned above, the details of the brokers to whom these amounts are claimed as payable are not available. Regarding such liability for brokerage, the AO drew following inferences: (a) Assessee is benefited since without paying any taxes it is able to have control over a big chunk of funds, which it is not required to pay to anyone i.e., neither the creditors (since they do not exist) nor the principals (since amount cannot be repatriated) and assessee can utilize the amount for its own benefit in the manner it likes. (b) The principals need not much bother about sending advance payments for meeting expenses in India, to the extent of such bogus expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed, against which the assessee is in appeal before us. The Department is also in appeal before us in IT(SS)A 492, against the relief of Rs. 2,14,78,504 allowed by the learned CIT(A). 18. In the backdrop of the abovementioned factual position, Shri Y.P. Trivedi, learned counsel for the assessee, submitted before us that the assessee's capacity with regard to various financial transactions vis-a-vis the principals, is only of agents and therefore the assessee-company is holding the surplus funds in a fiduciary capacity and such funds have been used by the assessee-company only on behalf of the principals. The assessee has not used any part of such liabilities for its own purposes and these are genuine liabilities payable to the principals. It is contended that the accounts of the assessee-company are annually audited and the auditors have never made any adverse comments about the outstanding liabilities. It is argued that since the assessee is only acting as an agent, its capacity is entirely fiduciary and for this proposition, reliance has been placed on the following judgments: (i) CIT vs. Tanubai D. Desai (1972) 84 ITR 713 (Bom); (ii) CIT vs. Sandersons Morgans (1970) 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As THC, LCL and other ancillary charges as also major portion of container detention charges are meant for local expenses to be incurred in connection with container handling, all such charges collected should be deposited in the agent's account in an identifiable manner, separately in respect of each principal. Only the remittable portion of detention charges can be credited to the collection account after determining the remittability of the same. Part of the detention charges have been allowed to be remitted by the RBI as per their letter dated 5th March, 1994. Therefore, such detention charges have been remitted to the extent allowed by the RBI. The learned counsel also submitted that any amount which is in the nature of liability originally cannot become trading receipt. For this proposition, he has relied on the Hon'ble Supreme Court decision in the case of Travancore Rubber Tea Co. Ltd. vs. CIT (2000) 160 CTR (SC) 1 : (2000) 243 ITR 158 (SC). It is also contended that a genuine liability cannot be brought to the charge of tax under s. 41(1) as held by the Hon'ble Supreme Court in the case of CIT vs. Sugauli Sugar Works (P) Ltd. (1999) 152 CTR (SC) 46 : (1999) 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwari submitted that after 31st March, 2000, nothing has been paid out of the aforesaid surplus collected by the assessee. It is argued that for all practical purposes, it can be said that the assessee has appropriated this amount for its own purposes and has used that amount. This amount cannot be used for any other purposes on behalf of the principals and it cannot be remitted to the principals. In the absence of details of the brokers, nothing can be paid to the brokers also. Thus, the assessee has derived this benefit which has to be brought to the charge of tax under s. 28(iv) of the IT Act. Shri Maheshwari contended that similar is the position regarding FAC and THC. He invited our attention to the letter from RBI, copy of which is compiled at pp. 202 to 205 of the paper book. Regarding detention charges, the learned CIT-Departmental Representative was fair enough to concede that to the extent such charges have actually been remitted to the principals, it cannot be said that the liability was bogus. Shri Maheshwari submitted that the learned CIT(A) has reduced the addition on account of detention-charges and has allowed relief to the assessee to the extent of Rs. 2,14,78,504 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any reference to the ship-owners. There was a clear finding that this amount was also not shown in the accounts of the assessee as due to the shipowners. There is no dispute about the fact that the amount of interest was never remitted to the shipowners. There was a clear finding that the amount of interest was still lying with the assessee. All these factors taken together clearly showed that the amount deposited in the bank belonged to the assessee and, therefore, the interest thereon also accrued to the assessee. 21. The learned counsel for the assessee, in his rejoinder, submitted that the various cases referred to by the learned CIT-Departmental Representative on the issue of cessation of liabilities are not applicable to the facts of the assessee's case for the simple reason that in those cases, the liabilities were liquidated and credited to the P L a/c by the assessee. In the present case, the assessee has been all along showing these amounts as liabilities payable to the principals and the assessee has not appropriated any part of such liabilities for its own purposes. Such liabilities are independently and separately reflected in the books of account. It is also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is not supposed to collect surplus amount and only such amount should be collected which is necessary and sufficient for meeting the liability for payment of expenses. For a proper understanding of the nature and character of the liabilities for payment of expenses, it would be fruitful to make a reference to the letter of the RBI. In this letter, it has been made clear by the RBI that under the extant regulations, resident Indians cannot make any payments on behalf of any non-residents and all expenditure incurred by local agent on behalf of the principals has to be met out of the funds provided by the principals in advance. Accordingly, the shipping companies have to keep their agents in adequate funds necessary to meet all the expenditure to be incurred in connection with their ships calling at Indian ports. The directions of the RBI with regard to JRC, FAC and inland haulage charges may be reproduced below from p. 2 of the RBI's letter: These charges represent domestic land-based costs, including documentation and other handling charges payable to the local shipping agents as per Karmahom Conference guidelines, recovered from shippers/consignees. These need to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of detention charges is permitted at the scale determined by a committee which had been appointed under the Chairmanship of the Director General of Shipping. Shipping companies have revised the graded scale of collection charges thereafter and hence a small portion of charges collected m excess of the approved scale remains blocked The need for revision in the approved scale, if any, and the scale at which such charges could be allowed in future are being examined by the appropriate agency of the Government of India. Regrettably, therefore, RBI would not be in a position to consider deblocking of blocked excess collections till the issue has been decided at the Government level. ITM, have generally followed the correct procedure in submission of data in this regard and in case of doubt, have been seeking necessary clarifications by deputing their staff. It may, however, be mentioned that due to pressure of work as also oversight, on occasions, amount to be blocked are not correctly worked out resulting in releasing higher amounts for local use. From the above, it becomes clear that the liabilities fall into two distinct categories. Detention charges are not retained for disbursemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT-Departmental Representative has drawn support from certain Supreme Court and Bombay High Court decisions to which we will revert back forthwith. The learned counsel for the assessee has also forcefully contended that s. 41(1) is not applicable and he has referred to the Supreme Court decision in the case of Sugauli Sugar Works (P) Ltd. and the Bombay High Court decision in the case of Mahindra Mahindra Ltd. In our view, this issue cannot be decided having regard to the ratio in the case of Sugauli Sugar Works (P) Ltd. It has been contended by the learned CIT-Departmental Representative that the Supreme Court decision in the case of T.V. Sundaram Iyengar Sons Ltd. has to be followed in preference to the case of Sugauli Sugar Works (P) Ltd. We find that this controversy was addressed by the Kerala (sic-Madras) High Court in the case of CIT vs. Sundaram Industries Ltd. (2002) 253 ITR 396 (Mad). The Kerala (sic-Madras) High Court discussed both the Supreme Court decisions and held that the judgment in the case of T.V. Sundaram Iyengar Sons Ltd. was rendered by three-Judges Bench whereas the judgment in the case of Sugauli Sugar Works (P) Ltd. was rendered by two-Judges Bench. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or trading liability. Lastly, the toolings constituted capital assets and not stock-in-trade. Therefore, taking into account all the above facts, s. 41(1) of the Act was not applicable. 27. In our view, the facts of the present case are completely different. It is true that s. 41(1) will not be applicable as the assessee-company has not claimed deduction in respect of this amount in any of the earlier assessment years or during the present block period. However, the character of the collection is completely different. Barring detention charges, all other collections were made for meeting expenses and, therefore, these collections arose during the normal course of the assessee's business activity. These collections were of revenue character right from the very beginning and they were not in the nature of capital receipts. At this stage, the ratio of the Supreme Court decision in the case of T.V. Sundaram lyengar Sons may be reproduced below from the headnote. If an amount is received in the course of a trading transaction, even though it is not taxable in the year of receipt as being of revenue character, the amount changes its character when the amount becomes the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng operations, the assessee becomes richer by any amount which is transferred to its P L a/c, such amount have to be treated as assessable in the case of the assessee. In the case of K.C. Thapar Ors., the Supreme Court observed that it cannot be laid down as a matter of law that any amount which was in any way not received as trading receipt can never become a trading receipt. In this case, the assessee carried on the business as del credere agent of collieries and also as an agent of the purchaser of coal. The assessee used to claim from the colliery companies the amount described as 'under charges'. These amounts were realized by the assessee even though not claimed by the purchaser. As and when demanded by the purchaser, the assessee used to pay off their claims on account of unloading of wagons. Every year, there was an excess of receipts over payments which was taken to the P L a/c. The Supreme Court observed that the important features in this case were that the assessee collected the amounts as 'under charges' in advance even before any claim was lodged It realized the amount from the colliery companies not because of any demand was made, but in order to prot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IT Act. The facts and ratio of this case is reproduced below from the head note: From a reading of s. 28 of the IT Act, it is clear that besides the profits and gains of business and profession carried on by the assessee at any time during the previous year, certain other benefits, etc., specified therein are also chargeable to income-tax under this head. Clause (iv) deals' with the value of any benefit or perquisite, whether convertible into money or not. The only condition for inclusion of the same in the chargeable income of the assessee is that it should arise from business or exercise of a profession. During the previous year relevant to the asst. yr. 1976-77, the assessee credited to its P L a/c a sum of Rs. 63,379. This amount comprised a sum of Rs.7,429 deposited by the customers of the assessee in earlier years as advance for purchasing pumps. These parties never turned up to buy the pumps or claim refund. Another sum of Rs. 4,321 represented excess commission received from parties which those parties never claimed back. Another sum of Rs. 13,249 was collected by the assessee on behalf of its principals, who never claimed the same from the assessee. The balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. These monies are held by the assessee for the purposes of incurring expenses during the course of its normal business activities as shipping agents. The assessee has not maintained any record or any details whatsoever about the persons to whom such liabilities are payable by way of disbursement of any expenses. These amounts can neither be credited to the account of the principals nor remitted to them nor used for any other purposes. The amounts are reflected in the account of the assessee and form part of its balance sheet on the liabilities side. These liabilities are, therefore, reflected in the assets of the assessee-company on the assets side of the balance sheet. Thus, the funds are under complete control of the assessee-company and can be used for its business purposes. The assessee-company cannot disburse these amounts for payment of expenses in future for the simple reason that no details are available regarding the persons to whom such payments are to be made. There are no vouchers or bills which have been raised by these persons which may be in assessee's possession on the basis of which the identity of such persons can be established. As mentioned above, the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d liabilities can be brought to the charge of tax. Here, a reference may be made to the contention of the learned counsel for the assessee that in future the assessee may be compelled either to pay all the expenses or to remit the amount under the directions of the RBI. In our view, the issue is required to be decided on the basis of facts and circumstances which prevail at present. As mentioned above, the assessee has no details about the brokerage and other expenses which are payable and till today the RBI has not permitted for remittance of any amount to the principals. In any case, if at any time in future, the assessee is compelled to part with any portion of such liabilities, which has already been brought to the charge of tax in its hands, the assessee can claim deduction under the provisions of the IT Act, which may be duly considered by the IT authorities as per the provisions of law 33. The last ground raised by the assessee pertains to levy of surcharge on the tax determined as payable under s. 113 of the IT Act. The learned counsel for the assessee invited our attention to the provisions of s. 113, which is reproduced below: The total undisclosed income of the block per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee against the order dt. 31st March, 2003 of CIT(A)-VIII, Mumbai. As per the revised grounds of appeal filed by the assessee under letter dt. 7th Oct., 2004, following issues are agitated by the assessee: 1(a) The learned CIT(A) erred in confirming the order of the AO and upholding the disallowance/additions in respect of unpaid liability payable to the principals and other disallowances based on surmises, conjectures and without proper appreciation of the facts and circumstances of the case and the submissions including legal submissions made to him from time-to-time and upon improper application of law. 1(b) The learned CIT(A) erred in disallowing Rs. 2,96,952 under s. 43B in respect of certain late payments to PF and ESIC and adding Rs. 2,72,921 in respect of income taxed under s. 2(24)(x) r/w s. 36(1)(va) of the IT Act in respect of employees' contribution to PF and ESIC as detailed hereunder: Sl. No. Particulars Amount added/disallowed (Rs.) 1. Disallowance under s. 43B of the Act (a) Delayed contribution of PF 2,19,180 (b) Delayed contribution of ESIC 77,772 2. Income taxed under s. 2(24)(x) of the Act (a) Delayed contribution of PF 2,42,656 (b) Delayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-cl. (x) of cl. (24) of s. 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation-For the purposes of this clause, 'due date' means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. From the above, it is clear that if the payments are made beyond the due date prescribed under the relevant Act, such payments are not deductible by virtue of the provisions of s. 36(1)(va). Admittedly, these payments have been made beyond the prescribed time-limit. Therefore, the disallowance with regard to payment of employees' contribution is confirmed. 39. The next issue pertains to addition of Rs. 7,55,27,732 as per break-up indicated in the relevant grounds of appeal as reproduced above. This issue regarding disallowances of liabilities has been discussed at length by us while deciding the cross-appeals for the block period. The facts and circumstances are the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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