Income Tax Appellate Tribunal - Mumbai
Herman Finochem Ltd, Mumbai vs Department Of Income Tax on 15 September, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "H", MUMBAI
BEFORE SHRI R.S. SYAL, A.M. AND SHRI V. DURGA RAO, J.M.
ITA No. 5795/Mum/2010
Assessment Year : 2007-08
The Asstt. Commissioner of Income-tax, ... Appellant
Range - 10(1), Room No. 455, Aayakar Bhavan,
M.K. Road, Mumbai - 400 020.
Vs.
M/s Herman Finochem ltd., ...Respondent
107-A, Vinaya Bhavya Complex,
199-A, CST Road, Kalina,
Santacruz (East), Mumbai - 400 059
(PAN - AABCH3223J)
Appellant by : Mr. Goli Srinivas Rao
Respondent by : Mr. Madhur Agarwal
Date of Hearing : 15/09/2011
Date of Pronouncement : 23/09/2011
ORDER
PER V. DURGA RAO, J.M.:
This appeal filed by the Revenue is directed against the order of CIT(A)- 21, Mumbai, passed on 06/05/2010 for the assessment year 2007-08 wherein the revenue has raised the following ground of appeal:-
" On the f acts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the disallowances of employees contribution to PF amounting to Rs. 6,61,614/- without appreciating that Explanation to section 36(1)(va) speaks of due date and not the grace period."
2. Briefly stated the facts of the case are that the assessee is a limited company engaged in manufacturing of bulk drugs. During the year under consideration the assessee company had filed its return of income declaring total income at Rs. 15,95,90,833/-, which was 2 ITA No.5795 /Mum/2010 M/s Herman Finochem Ltd.
processed u/s 143(3) of the Act, determining the total income at Rs. 16,04,40,577/- by the AO, disallowing the employees contribution of PF by invoking the provisions of section 43B & section 36(1)(va) r.w.s.2(24)(x) of the Act, by not accepting the assessee's argument that the payment made in the Government account of employees contribution of PF within the grace period should be considered as payment made within due date prescribed in the PF Act. On appeal, the CIT(A) deleted the disallowance by observing as under:-
"2.2 I have considered the f acts of the case. In the case under consideration, though the employees contribution was paid af ter the due date but within grace period allowed under the PF Act. Various Courts/ITAT including the jurisdictional ITAT, Mumbai are taking a consistent view that the employees contribution paid within grace period should be considered as payment within the due date prescribed in the PF Act and not liable for disallowance u;/s 2(24)(x) r.w.s. 36(1)(va) of the Act. Following the decisions of Courts and jurisdictional ITAT on this issue, the disallowance made by the AO, is deleted."
3. The learned counsel for the assessee has canvassed that the issue is covered by the decision of the Kerala High Court in the case of CIT Vs. Popular Vehicles and Services Ltd., [2010] 325 ITR 523 (Ker). On the other hand, the learned DR has not controverted to the submission of the learned counsel for the assessee.
4. We have heard the learned representatives of the parties, perused the record and gone through the orders of the authorities below as well as gone through the decision cited. The Hon'ble Kerala High Court in the case of Popular Vehicles and Services Ltd. (supra) held that "the gratuity f und was maintained for the benef it of the employees and the payment of the premium was to the fund operated by the LIC. Therefore, section 43B(b) was attracted to the payment involved. The deduction should be allowed if remittance was made at least before the date of f iling the return, even though such payment was not made before the end of the previous year." In view of the said decision of the Hon'ble Kerala High Court and various courts/ITAT are also taking a consistent view that the employees contribution paid 3 ITA No.5795 /Mum/2010 M/s Herman Finochem Ltd.
within grace period should be considered as payment within the due date prescribed in the PF Act and not liable for disallowance u;/s 2(24)(x) r.w.s. 36(1)(va) of the Act, we find no infirmity in the order of the CIT(A) in deleting the disallowance of Rs. . 6,61,614/- made by the AO on account of employees contribution of PF. Accordingly, we confirm the order of the CIT(A) and dismiss the ground raised by the revenue in this regard.
5. In the result, appeal of the revenue is dismissed.
Pronounced in the open court on this 23 r d day of September, 2011.
Sd/- Sd/-
(R.S. SYAL) (V. DURGA RAO)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 23 r d September, 2011
kv
Copy to:-
1) The Appellant.
2) The Respondent.
3) The CIT (A) concerned.
4) The CIT concerned.
5) The Departmental Representative, "H" Bench, I.T.A.T.,
Mumbai.
By Order
//true copy//
Asst. Registrar,
I.T.A.T., Mumbai.