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We find that the assessee has made payment on or before the due date of filing of return u/s. 139(1) of the Act and this issue is squarely covered by the decision of Hon’ble jurisdictional High Court in the case of Vijay Shree Limited, supra, wherein Hon’ble Calcutta High Court has held as under
Section 43B of the Income-tax Act, 1961 allows certain expenses on the basis of actual payment made within the stipulated time period, i.e. before the due date of filing return of income. In other words, deduction of such expenses is allowed in the year of actual payment and not in the year in which the liability to pay the same gets incurred. Following are the expenses which the said section covers by way of six clauses:
If the amount has been deposited on or before the due date of filing the return under Section 139 and admittedly it was deposited on or before the due date then the amount cannot be disallowed under Section 43B of the I.T. Act or under Section 36(1)(va) of the Act.
Section 43B which permits a deduction for payments made upto the due date for filing the ROI applies only to the employer’s contribution to the provident fund etc. It does not apply to the employees’ contribution.
If the assessee was entitled to make payment within the grace period and if within that grace period, its employer contributions have been deposited by the assessee, it cannot be said that the assessee has not deposited the amount with the department within the due date as prescribed under the Provident Fund Act
Though the questions are multiple, issue is single, namely, the deduction of Rs.61,08,500/- claimed by the assessee towards expenditure being part of development charges. The assessee had paid such sum to Surat Municipal Corporation towards water connection charges.
Explore Zyg Pharma vs. DCIT case – Sales tax waiver taxability and provident fund delay. Learn about ITAT Mumbai’s decision on these income tax matters.
Due date referred to in section 36(1)(va) of the Act must be read in conjunction with section 43B(b) of the Act and a reading of the same would make it amply clear that the due date as mentioned in Section 36(1)(va), is the due date as mentioned in section 43B(b)
The decisions by the apex court in the case of Vinay Cement Ltd. (supra) and Alom Extrusions Ltd. (supra) are admittedly with reference to section 43B and, further, qua the scope of the amendments thereto. The deductibility of the employee’s contribution is not regulated by section 43B.
If employers deposits employee’s Provident fund contribution before due date as referred to in section 43B, employer is eligible for benefit under said section-High Court-Karnataka in case of COMMISSIONER OF INCOME TAX Versus M/s SPECTRUM CONSULTANTS INDIA PVT LTD.
