INCOME TAX ACT, 1961

Section 36(1)(va)

Business deduction under section 36(1)(va) - Employees' contributions towards PF/ESI - Payment beyond due date under relevant Act -

Assessee claimed deduction on account of employees' contributions towards PF/ESI. AO disallowed deduction on account of payment beyond due date under the PF Act and/or ESI Act.Held: In terms of section 36(1)(va) read with sub-clause (x) of clause 24 of section 2, with respect to the sum received by assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee would be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by assessee to the employees' account in the relevant fund or funds on or before 'due date' mentioned in Explanation to section 36(1)(va). Consequently, employees' contributions to PF Account/ESI Account not credited by respective assessee to the employees' accounts in the relevant fund or funds on or before due date as per the Explanation to section 36(1)(va) was not eligible for deduction.

Applied:CIT v. Gujarat State Road Transport Corporation (2014) 41 Taxmann.com 100 (Guj) : 2014 TaxPub(DT) 1235 (Guj-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

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