INCOME TAX ACT, 1961

Section 36(1)(va)

Business deduction under section 36(1)(va) - Employees contribution to PF and ESI - Delayed deposit of employees contribution to PF -

Assessee challenged order of Tribunal holding that in case of delayed deposition of employees' contribution to PF and ESI, the same will not be deductible in computing income, under Section 28 of the Act. Case of assessee was that decision of Court in case of CIT v. Gujarat State Road Transport Corporation was carried to Supreme Court and SLP was pending. Held: The law so laid down by jurisdictional High Court is binding. The mere fact that an appeal against the said decision was pending before Supreme Court did not dilute binding nature of judicial precedent. Also in Ask Me Lab Con Services Ltd V/s. ITO 2019 TaxPub(DT) 4423 (Guj-HC)] by following decision given in Checkmate Facility and Electronic Solutions Pvt. Ltd. 2018 TaxPub(DT) 6737 (Guj-HC), it was held that due date of deposit of PF and ESI contribution is to be considered from close of the month, for which charges is required to be paid by the employer.

Followed:CIT v. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Gujarat) : 2014 TaxPub(DT) 1235 (Guj-HC); Ask Me Lab Con Services Ltd. v. ITO [Tax Appeal No. 25 of 2019] : 2019 TaxPub(DT) 4423 (Guj-HC); M/S Checkmate Facility And Electronic Solutions Pvt. Ltd. v. DCIT [Tax Appeal No.1256 of 2018] : 2018 TaxPub(DT) 6737 (Guj-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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