Metrochem Api Private Limited, ... vs Department Of Income Tax

ACIT, Circle 16(2) M/s. Metrochem API P. Ltd., Hyderabad. vs. Hyderabad. PAN AADCM2691M (Appellant) (Respondent)

For Revenue : Mr. Ramakrishna Bandi For Assessee : Mr. J. Appa Rao

Date of Hearing : 05.05.2015 Date of Pronouncement : 08.05.2015

ORDER

PER P.M. JAGTAP, A.M.

This appeal is preferred by the Revenue against the Order of the Ld. CIT(A)-V, Hyderabad dated 27.10.2014 whereby he deleted the disallowance of Rs.18,01,713 made by the A.O. on account of belated payment of employees contribution made by the assessee towards P.F., ESI and PT ("Professional Tax") after due dates prescribed in the relevant Acts but before the due date prescribed for filing the return of income for the year under consideration.

2. The assessee in the present case is a company which is engaged in the business of bulk drugs and intermediaries. The return of income for the year under consideration was filed by it on 30.09.2010 declaring total income of Rs.10,17,09,283. During the course of assessment proceedings, it was noticed by the A.O. that the assessee has 2 ITA.No.59/Hyd/2015 Metrochem API P. Ltd., Hyderabad.

not remitted the employees contribution towards P.F., ESI and PT aggregating to Rs.18,01,713 to the Government account within the due dates given in the relevant Acts. He therefore disallowed the belated payment made by the assessee towards employees contribution to P.F. ESI and PT relying on the provisions of section 36(1)(va) read with section (2)(24)(x) of the Act in the assessment completed under section 143(3) vide order dated 07.03.2012.

3. Against the order passed by the A.O. under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) who deleted the disallowance made by the A.O. on account of belated payment of employees contribution towards P.F. ESI and PT made by the assessee beyond the due dates prescribed in the relevant Acts but before the date of filing of the return of income for the year under consideration relying on the various judicial pronouncements cited by the assessee. Aggrieved by the order of the Ld. CIT(A) the Revenue has preferred this appeal before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material on record. Although the learned D.R. has relied on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Transport Corporation 366 ITR 170 wherein a similar issue is decided in favour of the Revenue keeping in view the specific provisions contained in section 36(1)(va) read with section 2(24)(x), it is observed that a similar issue has been decided in favour of the assessee by the various High Courts in the following cases wherein it has been held that employees contribution towards P.F. and ESI paid after the due dates prescribed in the relevant Acts but before the due date for filing of return of income as 3 ITA.No.59/Hyd/2015 Metrochem API P. Ltd., Hyderabad.

provided under section 139 is eligible for deduction as per the provisions of section 43B of the Act.

1 CIT vs. Aimil Ltd., (2010) 321 ITR 508 (Del.)

2. CIT vs. Nipso Polyfabriks Ltd., (2013) 350 ITR 327 (HP)

3. CIT vs. Alembic Glass Industries Ltd., (2005) 279 ITR 331 (Guj.)

4. CIT and another vs. Sabari Enterprises (2008) 298 ITR 141 (Kar.)

5. CIT vs. Pamwi Tissues Ltd., 92009) 313 ITR 137 (Bom.)

6. Spectrum Consultants India (P.) Ltd., vs. CIT (2013) 89 DTR (Kar.) 274;

7. CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd., (2014) 265 CTR 59 (Raj)

8. CIT vs. Hernia Embroidery Mills (P) Ltd., (2014) 98 DTR (P & H) 107.

4.1. The preponderance of judicial opinion on the issue under consideration thus is in favour of the assessee and following the decision of Hon'ble Supreme Court in the case of CIT vs. Vegetable Products Limited (88 ITR 192), we uphold the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue following the view taken by the various High Courts which is in favour of the assessee.

5. In the result, appeal of the Revenue is dismissed.

Order pronounced in the open Court on 08.05.2015.

Sd/- Sd/- (SMT. P. MADHAVI DEVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 08th May, 2015. VBP/- Copy to

1. ACIT, Circle 16(2), Room No.611, 6th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad.

2. M/s. Metrochem API P. Ltd., Flat No.302, Bhanu Enclave, Sunder Nagar, Erragadda, Hyderabad - 500 038.

3. CIT(A)-V, Hyderabad

4. CIT-IV, Hyderabad.

5. D.R. I.T.A.T. "A" Bench, Hyderabad.

6. Guard File