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Lalchand Resorts Private v/s Dcit, Corporate Circle-1(1), Bhubaneswar

    ITA No. 124/CTK of 2018

    Decided On, 31 July 2018

    At, Income Tax Appellate Tribunal Cuttack

    By, THE HONOURABLE MR. N.S. SAINI
    By, ACCOUNTANT MEMBER & THE HONOURABLE MR. PAVAN KUMAR GADALE
    By, JUDICIAL MEMBER

    For the Appellant: None. For the Respondent: D.K. Pradhan, DR.



Judgment Text

1. N.S. Saini, AM This is an appeal filed by the assessee against the order of the CIT(A)- 1, Bhubaneswar dated 7.12.2017 for the assessment year 2014-15.

2. The sole issue involved in this appeal is that the CIT(A) erred in confirming the action of the Assessing Officer disallowing Rs.8,98,981/- u/s.2(24)(x) r.w.sec 36(1)(va) of the Act in respect of employees PF & ESI.

3. None appeared on behalf of the assessee. However, a written submission is placed on record by ld A.R. of the assessee. In view of above, we proceed to dispose of the appeal of the assessee after hearing ld D.R. and on the basis of written submission.

4. The brief facts of the case are that the Assessing Officer observed that the assessee has not deposited Rs. Rs.8,98,981/-u/s.2(24)(x) r.w.sec 36(1)(va) of the Act in respect of employee's contribution to EPF & ESI within the stipulated due date u/s.36(1)(va) of the Act and, therefore, he added the same to the income of the assessee.

5. On appeal, the CIT(A) confirmed the action of the Assessing Officer following the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj).

6. In the written submission, it is submitted by ld A.R. of the assessee that the issue is square covered by the decision of Hon'ble Supreme Court in the case of Rajasthan State Beverage Corporation Ltd. (2017), 84 taxmann.com 185(SC), wherein, it has been held that no disallowance of deduction for employee's contribution to PF and ESI is to be made where the amount is deposited by the assessee within the time prescribed for filing return of income u/s.139(1) of the Act, which is also followed by the ITAT Cuttack in the case of OCP India Pvt Ltd. Vs ACIT, ITA No.145/CTK/2017 for A.Y. 2012-13, order dated 6.3.2018, copy of which is placed on record.

7. Ld D.R. agreed to the submission of ld A.R. of the assessee.

8. After hearing ld D.R. and perusing the written submission filed by the assessee, we find that the assessee has deposited employee's contribution to PF of Rs.7,85,825/- and ESI of Rs.1,13,156/- aggregating to Rs.8,98,981/- within the due date prescribed u/s.139(1) of the Act as is evident from the assessment order and the addition has been made by the Assessing Officer and confirmed by the CIT(A) on the ground that same was not deposited within the due date prescribed under the respective Acts. We find that this issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Rajasthan State Beverage Corporation Ltd., (supra), wherein, it was held as under:

"Section 43B, read with section 36(1)(va), of the Income Tax Act, 1961-Business disallowance-certain deduction to be allowed only on `actual payment (PF & ESI construction)- High Court by the impugned order held that amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va)- Whether SLP against said impugned order was to be dismissed-Held yes (para 2) in favour of assessee."

9. In the instant case, it is not in dispute that the contribution to PF and ESI was deposited b

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y the assessee before due date of filing the return of income u/s.139(1) of the Act. Therefore, we set aside the orders of lower authorities and delete the disallowance of employee's contribution to PF and ESI of Rs.8,98,981/- and allow the ground of appeal of the assessee. 10. In the result, appeal filed by the assessee is allowed.
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