Mona Trends Private Limited, New Delhi V. Income Tax Officer, New Delhi

ITA 1634/DEL/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1396 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 08-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india; Question of law
• Section: 143(1)

Judgement Text

1 | Page IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1634/Del/2021 [Assessment Year : 2017-18] Mona Trends Pvt.Ltd., A-37/2, Mayapuri Industrial Area, New Delhi-110064. PAN-AAFCM2476E vs ITO, Ward- 17(1),C.R.Building, I.P.Estate, Delhi. APPELLANT RESPONDENT Appellant by Shri Ashok Khandelwal, CA Respondent by Shri Om Prakash, Sr.DR Date of Hearing 24.05.2022 Date of Pronouncement 24.05.2022 ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2017-18 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”) dated 28.09.2021. 2. The assessee has raised following ground of appeal:- 1. “Action of the CIT(A) in confirming the action of A.O. in making an addition of Rs.1,72,896/- u/s 36(1)(va) of the I.T.Act, 1961 for delayed deposit of employees contribution of EPF and ESI but paid before the due date of filing of return is unjust, illegal, arbitrary and against the facts and circumstances of the case.” FACTS OF THE CASE 3. Facts giving rise to the present appeal are that the assessee filed return of income declaring income from business and profession at Rs.26,89,424/-. The said return was processed u/s 143(1) of the Income Tax Act, 1961 (“the Act”) in which deduction claimed with respect to payment of employees 2 | Page contribution towards ESI/PF of Rs.1,72,896/- was disallowed by the Central Processing Centre (“CPC”), Bangalore on the basis that the same was deposited after due dates, as per the respective Acts. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition. 5. Now, the assessee is in appeal before this Tribunal. 6. Ld. Sr. DR vehemently submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A). 7. At the outset, Ld. Counsel for the assessee submitted that issue is squarely covered in favour of the assessee. He relied on various case laws. 8. I have heard the Ld. authorized representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The issue in this appeal is related to disallowance of expenditure on account of delay in deposit of employees contribution related to PF & ESI. The issue is squarely covered by the judgement of Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held as under:- “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do 3 | Page not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act.” Therefore, respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court in the above-mentioned binding precedent, I hereby direct the Assessing Officer to delete the disallowance. Thus, ground raised by the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 24 th May, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI