INCOME TAX ACT, 1961

Section 36(1)(va)

Business disallowance under section 36(1)(va) - Late payment of employee's contribution to Provident Fund (PF) and Employees' State Insurance Corporation (ESIC) - -

Assessee had deducted PF contribution from its employees, but the same was not deposited in the Government account within the due date prescribed. AO with the aid of section 2(24)(x) read with section 36(1)(va) and following judgment of jurisdictional High Court in the case of CIT v. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) : 2014 TaxPub(DT) 1235 (Guj-HC) disallowed the claim of the assessee. CIT(A) confirmed the action of AO. Held: High Court in the case of Gujarat State Road Transport Corporation Ltd. [(2014) 366 ITR 170 (Guj) : 2014 TaxPub(DT) 1235 (Guj-HC)] and M/s. Checkmate Facility & Electronics Solutions P.Ltd. Vs. DCIT [[R/Tax Appeal No. 1256 of 2018, dt. 15-10-20418]] held that employees' contribution to EPF and ESIC deposited beyond the due date prescribed under section 36(1)(va) would not be eligible for deduction under section 43B, even if deposited before the due date of filing the tax. Therefore, there is no merit in appeal of assessee.

Followed:CIT v. Saravana Spinning Mills (P) Ltd. (2007) 293 ITR 201 (SC) : 2007 TaxPub(DT) 1442 (SC) M/s. Checkmate Facility and Electronic Solutions (P) Ltd. v. Dy. CIT [R/Tax Appeal No. 1256 of 2018, dt. 15-10-20418] CIT v. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) : 2014 TaxPub(DT) 1235 (Guj-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

INCOME TAX ACT, 1961

Section 37(1)

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