INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Provident fund amount paid - No evidence before authority or before Tribunal to show that as per instruction of assessee, contractee deducted the PF from billing amount -

Assessee's case was that CIT(A) was wholly unjustified and unreasonable to confirm the addition being the provident fund amount paid via TRL as per arrangement between assessee, a contractor under the principal TRL. Assessee further submitted that first appellate authority failed to appreciate this simple business practice and ignoring all the evidences produced before him and he, thus, was not justified in confirming the addition made by AO, which was totally illegal, unjustified and bad in law.Held: Assessee had submitted plausible evidence in his command to show that as agreed by assessee-contractor and TRL-contractee, amount of provident fund to be deducted was calculated and statement was submitted by assessee to the financial department of TRL, obviously with an object to comply with the provident fund proceedings. There was no evidence either before authorities below or before the Tribunal to show that as per the instruction of assessee, TRL deducted the provident fund from the billing amount of the assessee for further depositing the same to the provident fund department/competent authority. Thus, matter was remanded back to AO for limited verification as to whether the TRL had deducted the provident fund from the bill raised by assessee for further depositing the same to the provident fund authority/competent authority.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 37(1)

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