The Tax Publishers2021 TaxPub(DT) 0787 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 36(1)(va)

Where assessee had remitted employees' contributions to Provident Fund and ESI before the due date of filing of the return of income under section 139(1), no disallowance could be made under section 36(1)(va).

Business deduction under section 36(1)(va) - Employees' contributions to PF and ESI - Deposited before due date of filing of return -

AO made disallowance under section 36(1)(va) as assessee made delay in remitting employees' contributions to Provident Fund and ESI. As per assessee sum was remitted before the due date of filing of the return of income under section 139(1) and therefore, the same should not have been disallowed under section 36(1)(va). Held: The case of CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC) : 2009 TaxPub(DT) 2109 (SC)] is applicable to both the employer as well as employee's contributions to Provident Fund and ESI and if the assessee has not remitted the amount collected from the employees before the due date of filing of return of income under section 139(1), then the same has to be disallowed and brought to tax. Where in the present case, assessee had remitted a sum before the due date of filing of the return of income under section 139(1), no disallowance could be made under section 36(1)(va).

Followed:CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC) : 2009 TaxPub(DT) 2109 (SC)].

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2018-19



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