Case Law Details
Considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va). Consequently, it is held that the learned tribunal has erred in deleting respective dis allowances being employees’ contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees’ accounts in the relevant fund or funds (in the present case Provident Fund and/or ESI Fund on or before the due date as per the explanation to section 36(1)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees’ contribution to the employees’ account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.
ITAT benches in the following cases held the view that employees contribution is controlled by section 36(1)(va) and not by section 43B :-
- Jt. CIT v. ITC Ltd.(2008) 299 ITR (AT) 341 (Kol-Trib)
- Dy. Commissioner of Income Tax v. Bengal Chemicals & Pharmaceuticals Ltd. (2011) 41 (II) ITCL 345 (Kol C-Trib)
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For consideration:
1. Section 2(24(x) treated employee’s contribution as income of the assessee.
2. Section 28 read with section 36(1)(va) allowed the deduction to the assessee of such amount in computing the income if such sum is credited by the assessee to the employee’s account in the relevant fund or funds on or before the “due date” as per the law instituted for such fund.
3. section 34B(b) read with proviso to section 43B is an exception if case is not fall with above because the word “any sum payable” by the assessee …..