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| The Tax Publishers2019 TaxPub(DT) 3459 (Ahd-Trib) INCOME TAX ACT, 1961
Section 36(1)(va)
Where provision requires an employer before paying the employee his wages to deduct the employee's contribution along with the employer's own contribution as fixed by the Government and the same has to be deposited with the Government within fifteen days of the close of every month, therefore there was no infirmity in the order passed by authorities in making the addition.
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Business disallowance under section 36(1)(va) - Addition on late payment of ESIC and PF contribution - -
During assessment proceedings, documents submitted by assessee showed that payment regarding ESIC and PF contribution received from the employees was not made to the Government account within the due date. Since assessee did not deposit the amount on account of ESIC and PF contribution respectively within the stipulated period mentioned in the concerned Act, such benefit has been disallowed under section 36(1)(v) read with section 2(24)(x). Held: This provision requires an employer before paying the employee his wages to deduct the employee's contribution along with the employer's own contribution as fixed by the Government. After deducting the employee's contribution towards the funds, the same has to be deposited with the Government within fifteen days of the close of every month. By relying on case of Checkmate Facility and Electronic Solutions (P.) Ltd. v. Dy. CIT [R/Tax Appeal No. 1256 of 2018, dt. 15-10-2018] : 2018 TaxPub(DT) 6737 (Guj-HC), no infirmity in the order passed by authorities in making the addition on account of delay in depositing the ESIC and PF contribution with the concerned authorities.
Followed:Checkmate Facility and Electronic Solutions (P.) Ltd. v. Dy. CIT [R/Tax Appeal No. 1256 of 2018, dt. 15-10-2018] : 2018 TaxPub(DT) 6737 (Guj-HC)
REFERRED :
FAVOUR : Against the assessee.
A.Y. :
INCOME TAX ACT, 1961
Section 14A
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