ACIT Vs United Hitech Pvt. Ltd. (ITAT Delhi)
In this case before the Income Tax Appellate Tribunal, the Revenue challenged the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 25.09.2024 for Assessment Year 2018-19. The dispute arose from an assessment completed under Sections 143(3), 143(3A), and 143(3B) of the Income Tax Act.
The assessee company had filed its return of income declaring total income of Rs. 40,24,910. The case was selected for scrutiny under CASS on issues relating to refund, unsecured loans, and contract receipts or fees. The assessee was engaged in contractor work for NTPC Limited, including repair and maintenance of boiler pressure parts, rotary equipment, milling systems, fuel firing systems, structural works, and related industrial jobs.
During assessment proceedings, the Assessing Officer made several additions and disallowances, including disallowance of expenses under Section 37(1), additions under Section 40A(3), and addition under Section 68. The total assessed income was determined at Rs. 3,76,19,685.
The Revenue challenged the order of the CIT(A), which had partly allowed the assessee’s appeal and deleted several additions. One issue related to deletion of disallowance under Section 37(1) concerning interest on delayed payment of PF, ESI, and service tax. The Tribunal noted that the CIT(A) had relied on decisions of Coordinate Benches holding that interest on delayed payment of statutory dues such as PF and ESI is compensatory in nature and allowable as deduction under Section 37(1). The Tribunal observed that the Revenue failed to controvert these findings or produce any contrary judicial precedent. Accordingly, the Tribunal upheld deletion of disallowances relating to interest on delayed PF, ESI, and service tax payments.
