DCIT, CHENNAI V. M/s. Sundaram Business Services Ltd., CHENNAI

ITA 3006/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4972 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 24-10-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Business income; Question of law
• Section: 43B; 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , ' # BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 3006/MDS/2016 / ASSESSMENT YEAR : 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), AAYAKAR BHAVAN, NEW BLOCK, 7TH FLOOR, 121 M.G. ROAD, CHENNAI - 600 034. VS. M/S. SUNDARAM BUSINESS SERVICES LTD., 21, PATULLOSE ROAD CHENNAI - 600 002. [PAN: AAJCS 9232J] ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT )*% & / RESPONDENT BY : SHRI BAVYA RANGARAJAN ADVOCATE SUBBARAYA AIYAR & /DATE OF HEARING : 16.01.2017 & /DATE OF PRONOUNCEMENT : 13.04.2017 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-15, CHENNAI IN ITA NO. 452/ CIT(A)-15/13-14 DATED 06.07.2016 FOR THE ASSESSMENT YEAR 2010-11 PASSED U /S. 143(3) AND 250 OF THE INCOME TAX ACT. :-2-: I.T.A. NO. 3006/MDS/2016 2. AT THE TIME OF HEARING, THE LD. DR SUBMITTED THA T THERE IS A DELAY OF 16 DAYS IN FILING THE APPEAL BY THE REVENUE AND THE LD . DR HAS FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY AND THE LD. AR HAS NO SERIOUS OBJECTIONS AND WE ARE SATISFIED WITH THE SUFFICIENT AND REASONABLE CA USE EXPLAINED FOR FILING THE APPEAL BELATEDLY AND ADMIT THE APPEAL. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 3.1 THE LD. CIT(A) ERRED IN DIRECTING THE AO TO EXC LUDE THE INVESTMENTS MADE IN SUBSIDIARIES WHILE CALCULATING DISALLOWANCE U/S. 14A AND TO RESTRICT THE DISALLOWANCE TO THE AMOUNT OF DIVIDEND RECEIVED. 3.2 THE LD CIT(A) OUGHT TO HAVE NOTED THAT INVESTM ENT MADE IN SUBSIDIARIES ARE NOT LIABLE FOR DISALLOWANCE U/S 14A WHEN THE PR OVISIONS CONTAINED IN THE SAID SECTION AS WELL AS RULE 8D DOES NOT PROVID E FOR ANY SUCH EXCEPTION. 3.3 THE LD CIT(A) FAILED TO APPRECIATE THAT INVEST MENT IN SHARES OF SUBSIDIARY COMPANIES ALSO YIELDED DIVIDEND INCOME, WHICH IS E XEMPT FROM INCOME TAX AND HENCE PROVISIONS OF SEC 14A ARE APPLICABLE. 3.4 THE LD CIT (A) OUGHT TO HAVE NOTED THAT INVEST MENT IN SUBSIDIARY COMPANIES ALSO WILL EARN DIVIDEND INCOME ONLY WHICH IS EXEMPT UNDER IT ACT AND IN VIEW OF THE DECISION IN THE CASE OF GODR EJ & BOYCE MFG CO LTD. (BOMBAY) 328 ITR 81, MAXOPP INVESTMENT LTD (DEL) 34 7 ITR 272 AND LEENA RAMACHANDRA (KER) 339 ITR 296 ON IDENTICAL IS SUE, AND INSTEAD :-3-: I.T.A. NO. 3006/MDS/2016 FOLLOW A DECISION OF ITAT AND WHETHER SUCH AN ORDER FOLLOWING AN INFERIOR JUDICIAL AUTHORITY MAKES THE ORDER OF CIT(A) PERVER SE IN THE EYES OF LAW. 3.5 THE LD CIT(A) OUGHT TO HAVE NOTED THAT RESTRIC TING THE DISALLOWANCE U/S 14A TO THE EXTENT OF DIVIDEND RECEIVED DURING THE Y EAR WHEN THE PROVISIONS CONTAINED IN THE SAID SECTION AS WELL AS RULE 8D DO ES NOT PROVIDE FOR ANY SUCH RESTRICTION. 3.6 THE LEARNED CIT(A) ERRED IN DIRECTING AO TO DE LETE THE DISALLOWANCE OF RS.26,37,965J- MADE U/S 2(24)(X) BEING PAYMENT OF P F AND ESI COLLECTED FROM EMPLOYEES BEYOND THE DUE DATE AS PER THE RESPE CTIVE ACTS. 3.7 THE LD CIT(A) OUGHT TO HAVE NOTED THAT THE ADDI TION MADE TOWARDS PAYMENT OF PF RECOVERED BY THE EMPLOYER, MADE AFTER THE RESPECTIVE DUE DATE UNDER THE PF ACT TREATING IT AS INCOME U/S 2(2 4) (X) AND DENYING THE DEDUCTION U/S 36(1) (VA). 3.8 THE LD CIT(A) FAILED TO APPRECIATE THAT THE PR OVISIONS OF SEC 43B TO PAYMENT OF PF RECOVERED BY THE EMPLOYER WHEN SUCH P ROVISIONS ARE APPLICABLE ONLY TO EMPLOYER'S CONTRIBUTION TO PF' 3.9 THE LD CIT(A) OUGHT TO HAVE NOTED THAT THE DEC ISION OF MADRAS HIGH COURT IN THE CASE OF INDUSTRIAL SECURITY AND INTELLIGENCE INDIA PVT LTD., WAS NOT ACCEPTED BY DEPARTMENT ON MERITS AND M.P FILED BY D EPARTMENT IS STILL PENDING BEFORE HIGH COURT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF BUSINESS SUPPORT SERVICES AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-1 1 ON 30.09.2010. :-4-: I.T.A. NO. 3006/MDS/2016 SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D NOTICE U/S. 143(2) WAS ISSUED. IN COMPLIANCE TO NOTICE, THE LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED THE INFORMATION AND CASE WAS DISCUSSED. THE ASSESSING OFFICER ON PERUSAL OF THE FINANCIAL STATEMENTS, TAX AUDIT REPORT AND FORM 3CD, FOUND THAT THE ASSESSEE COMPANY HAS NOT PAID EMPLOY EE'S CONTRIBUTION OF ESI AND PF WITHIN THE DUE DATES SPECIFIED UNDER THE RES PECTIVE ACT. THE LD. AR EXPLAINED THAT THE ASSESSEE COMPANY COULD NOT MAKE THE PAYMENT FOR VARIOUS REASONS WITHIN THE DUE DATE BUT PAID THE ENTIRE CON TRIBUTION BEFORE DUE DATE OF RETURN OF INCOME U/S. 139(1) OF THE ACT AND RELIED ON THE PROVISIONS OF THE ACT AND JUDICIAL DECISIONS. WHEREAS, THE ASSESSING OFF ICER OVER LOOKED THE FACTS AND DETAILS AND THE JUDICIAL DECISIONS AND MADE AN ADDI TION OF DELAYED PAYMENT OF EMPLOYEE CONTRIBUTION ON PF AND ESI U/S. 2(24)(X) O F THE ACT RS. 26,37,965/-AND FURTHER, THE LD. AO FOUND THAT THE ASSESSEE HAS EAR NED DIVIDEND INCOME OF RS. 15,53,306/- IN THE FINANCIAL YEAR2009-10 AND CLAIME D EXEMPTION. THE LD. AR SUBMITTED THE LETTER DATED 13.03.2013 EXPLAINING TH AT THE AMOUNT OF RS. 3,00,282/- WAS DISALLOWED AS EXPENDITURE FOR EARNIN G DIVIDEND INCOME IN RESPECT OF ESTABLISHMENT AND ADMINISTRATION EXPENDITURE. B UT THE ASSESSING OFFICER FOUND THE METHOD ADOPTED BY THE ASSESSEE IS NOT IN ACCORDANCE WITH LAW AND APPLIED THE PROVISIONS OF SECTION 14A R.W.R. 8D OF THE IT RULES AND THE LD. AO CALCULATED DISALLOWANCE U/S. 14A R.W.R. 8D(II) & (I II) OF THE IT RULES RS. 61,01,054/- AND PASSED THE ORDER U/S. 143(3) DATED 20.03.2013. :-5-: I.T.A. NO. 3006/MDS/2016 5. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE LD. AR ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS OF ASSESSMENT PROCEEDINGS IN RESPECT OF DISALLOWANCE U/S. 14A R.W.R. 8D RS. 61,01,054/-, THE LD. AR MADE SUBMISSIONS DEA LT AT PARA 5.2.1 OF CIT(A) ORDER. THE LD CIT(A) CONSIDERED THE FACTS, FINDING S AND JUDICIAL DECISIONS AND THE SUBMISSIONS THAT THE INVESTMENTS ARE MADE BY THE AS SESSEE IN THE SISTER CONCERN AND WITH PROFIT MOTIVE AND THEREFORE THE DISALLOWAN CE U/S. 14A R.W.R. 8D OF THE IT RULES HAS TO BE DELETED. THE LD. CIT(A) OBSERVED T HAT THE PROVISIONS OF SECTION 14A R.W.R. 8D OF THE IT RULES ARE MANDATORY AND REL IED ON JUDICIAL DECISIONS OF HON'BLE HIGH COURT IN THE CASE OF M/S. GODREJ AND B OYCE MANUFACTURING LTD. VS. CIT, 328 ITR 81 AND CONFIRMED THE APPLICABILITY OF PROVISIONS OF SECTION 14A OF THE ACT. THE LD. AR SUBSTANTIATED THAT THE ASSESSI NG OFFICER HAS NOT RECORDED ANY SATISFACTION AND SUBMISSIONS WERE REJECTED AND INVESTMENT IN GROUP CONCERN/SUBSIDIARY COMPANIES ARE TO BE EXCLUDED FOR CALCULATION UNDER RULE 8D OF THE IT RULES. THE LD. CIT(A) FOUND THAT DETAILS WE RE NOT PROVIDED IN RESPECT OF INVESTMENTS IN SUBSIDIARY COMPANIES AND RELIED ON T HE CO-ORDINATE BENCH DECISION OF EIH ASSOCIATED HOTELS LTD VS. CIT, 3TIOL-796-ITA T-MAD AND DIRECTED THE ASSESSING OFFICER TO EXCLUDE INVESTMENT MADE IN SUB SIDIARY COMPANIES FOR CALCULATION OF DISALLOWANCE U/S. 14A OF THE ACT AND RESTRICT THE DISALLOWANCE TO THE EXTENT OF DIVIDEND INCOME RELYING ON JUDICIAL D ECISIONS AND PARTLY ALLOWED THE GROUND. 6. AGGRIEVED BY THE CIT(A) ORDER, REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. BEFORE US, THE LD. AR ARGUED THAT THE LD . CIT(A) HAS ERRED IN DIRECTING :-6-: I.T.A. NO. 3006/MDS/2016 THE ASSESSING OFFICER TO EXCLUDE INVESTMENT MADE IN SUBSIDIARY COMPANIES IN CALCULATING DISALLOWANCE U/S. 14A OF THE ACT AND WH EREAS, THE ASSESSEE COMPANY MADE THE INVESTMENTS ONLY TO HAVE CONTROLLING INTER EST AND THERE IS NO PROVISION TO RESTRICT DISALLOWANCE U/S. 14A OF THE ACT AND RE LIED ON THE HIGH COURT AND CO- ORDINATE BENCH DECISIONS AND PRAYED FOR ALLOWING TH E REVENUE APPEAL. CONTRA, THE LD. AR RELIED ON THE ORDERS OF THE CIT(A) AND S UPPORTED WITH JUDICIAL DECISIONS. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MA TERIALS ON RECORD AND JUDICIAL DECISIONS. THE LD. DRS CONTENTION THAT T HE LD.CIT(A) WAS NOT CORRECT IN DIRECTING THE LD. AO TO DELETE THE INVESTMENT IN TH E SUBSIDIARY COMPANIES AND SISTER CONCERNS, WHILE CALCULATING DISALLOWANCE U/S . 14A OF THE ACT UNDER RULE 8D(III) OF INCOME TAX RULES AND RESTRICTING SUCH DI SALLOWANCE TO THE EXTENT OF EXEMPTED INCOME. WE FOUND THESE INVESTMENTS ARE MA DE BY THE ASSESSEE COMPANY FOR THE PURPOSE OF YIELDING BUSINESS INCOME THOUGH THEY ARE TERMED AS STRATEGIC INVESTMENTS. THE INVESTMENTS ARE MADE FO R BUSINESS PARTICIPATION AND WITH PROFIT MOTIVE. BUT NOT FOR EARNING DIVIDEND IN COME. THE FACT REMAINS THESE INVESTMENTS ARE TO BE MADE OUT OF ITS OWN FUNDS AND NOT INTEREST BEARING BORROWED FUNDS. THE LD. AR SUBMITTED THAT THE ASSE SSEE COMPANY HAS ADEQUATE OWN FUNDS REPRESENTED BY SHARE CAPITAL, RESERVES AN D SURPLUS OVER A PERIOD OF TIME. WHEREAS, THE LD. DR SUBMITTED THAT THE INVES TMENTS ARE MADE TO OBTAIN CONTROLLING INTEREST IN THE COMPANY. WE FIND SIMIL AR ISSUE DECIDED BY THE HONBLE HIGH COURT OF KARNATAKA IN M/S. UNITED BREWERIES LT D. V. DCIT [2016] 72 TAXMANN.COM 102, HELD AT PARA 8 & 9 WHICH READ AS U NDER: :-7-: I.T.A. NO. 3006/MDS/2016 8. SO FAR AS SECOND QUESTION OF APPLICABILITY OF SEC. 14A OF THE ACT TO THE EXPENSES INCURRED BY THE APPELLANT TOWARDS INTE REST AND OTHERS ON THE LOAN BORROWED IS CONCERNED, THE FINDING OF THE TRIBUNAL IS AT PARAGRAPH11 WHICH READS AS UNDER : '11. THE REVENUE IS IN APPEAL AND WE HAVE CONSIDERE D THE RIVAL CONTENTIONS. IN OUR VIEW, THE RECENT JUDGMENT OF TH E SPECIAL BENCH IN BOMBAY IN ITO V. DAGA CAPITAL MANAGEMENT P VT. LTD. (2009) 312 ITR (AT) 1, IS APPLICABLE TO THE FA CTS OF THE PRESENT CASE. IN THIS ORDER, IT HAS BEEN HELD THAT SECTION 14A IS APPLICABLE EVEN WHERE THE MOTIVE IN ACQUIRING THE S HARES WAS TO OBTAIN CONTROLLING INTEREST IN THE COMPANIES. THE F INDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) CANNOT, THEREF ORE, BE UPHELD AS IT IS CONTRARY TO THE DECISION OF THE SPE CIAL BENCH. WE, ACCORDINGLY, UPHOLD IN PRINCIPLE THE APPLICABILITY OF SECTION 14A. HOWEVER, IT IS FOR THE ASSESSING OFFICER TO ASCERTA IN FROM THE FACTS OF THE CASE AS TO HOW MUCH INTEREST BEARING B ORROWINGS WAS UTILIZED TO ACQUIRE SHARES IN THE COMPANIES. IT IS ALSO NECESSARY TO SEE AS TO WHETHER ANY INTEREST BEARING BORROWED FUNDS WERE USED IN MAKING THE ADVANCES AND EXPENDIT URE IN THE CASE OF CASTLE BREWERIES. THIS FACTUAL EXERCISE HAS TO BE CARRIED OUT BY THE ASSESSING OFFICER AFTER GIVING DUE OPPOR TUNITY TO THE ASSESS OF BEING HEARD. THE ASSESSING OFFICER MAY MA KE THE DISALLOWANCE OF INTEREST U/S.14A ONLY IF IT IS FOUN D THAT INTEREST BEARING BORROWED FUNDS WERE USED TO ACQUIRE SHARES IN THE COMPANIES OR FOR MAKING ADVANCES TO CASTLE BREWERIE S. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE AS SESSING OFFICER WITH THE ABOVE DIRECTIONS. THE GROUND IS TREATED AS PARTLY ALLOWED.' 9. THE AFORESAID SHOWS THAT THE TRIBUNAL AFTER HOLDIN G IN PRINCIPLE THE APPLICABILITY OF SEC. 14A, HAS FURTHER DIRECTED THE ASSESSING OFFICER TO ASCERTAIN FROM THE FACTS OF THE CASE AS TO HOW MUCH INTEREST BEARING BORROWINGS WAS UTILIZED TO ACQUIRE SHARES IN THE CO MPANIES AND THE MATTER IS RELEGATED TO THE ASSESSING OFFICER. AS PE R THE LANGUAGE IN SEC.14A, THE ENQUIRY HAS TO BE UNDERTAKEN BY THE AS SESSING OFFICER WHICH HAS BEEN SO ORDERED BY THE TRIBUNAL. HENCE, I T CAN BE SAID THAT THE TRIBUNAL HAS EXERCISED THE DISCRETION WHERE RIG HTS OF BOTH SIDES ARE KEPT OPEN FOR ADMISSIBLE DEDUCTION UNDER SEC.14A. W HEN SUCH A DISCRETION IS EXERCISED AND THE RIGHTS OF THE APPEL LANT-ASSESSEE IS ALSO KEPT OPEN TO SATISFY THE ASSESSING OFFICER, IT CANN OT BE SAID THAT ANY :-8-: I.T.A. NO. 3006/MDS/2016 SUBSTANTIAL QUESTIONS OF LAW WOULD ARISE FOR CONSID ERATION, AS SOUGHT TO BE CANVASSED. IN OUR VIEW, AT THE STAGE OF ENQUIRY UNDER SEC.14A, IT IS OPEN TO THE ASSESSING OFFICER TO INDEPENDENTLY CONS IDER THE MATTER FOR ADMISSIBILITY OF THE INTEREST ON BORROWINGS AND IF YES TO WHAT EXTENT. HENCE, WHEN THE QUESTION AT LARGE IS FURTHER TO BE CONSIDERED BY THE ASSESSING OFFICER, WE DO NOT FIND THAT ANY FURTHER OBSERVATIONS ARE REQUIRED TO BE MADE IN THIS REGARD. IN ANY CASE, TH E QUESTION OF LAW AS SOUGHT TO BE CANVASSED WOULD NOT ARISE FOR CONSIDER ATION AT THIS STAGE ON THE SAID ASPECTS AS SOUGHT TO BE CANVASSED. WE RELY ON THE JUDICIAL DECISION AND IN THE INTERES T OF JUSTICE, WE REMIT THE DISPUTED ISSUE TO THE FILE OF THE LD. AO FOR VERIFI CATION OF INVESTMENTS OF THE ASSESSEE IN SUBSIDIARY COMPANIES/SISTER CONCERN WIT H OWN FUNDS OR BORROWED FUNDS FOR THE PURPOSE OF DISALLOWANCE U/S.14A OF TH E ACT AND THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER ON MERITS. ACCORDINGLY WE REMIT THE DISPUTED ISSUE FOR LIMITED PURPOSE TO THE FILE OF AO AND ALLOW THE GROUND OF THE REVENUE FOR STATISTICAL PUR POSE. 8. ON THE SECOND DISPUTED ISSUE THE LD. CIT(A) FOUN D THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF EMPLOYEE'S CONTRIB UTION OF RS. 26,37,965/- U/S. 2(24)(X) OF THE ACT FOR DELAYED PAYMENT OF PF AND E SI. THE LD. AR SUBMITTED THAT THE PAYMENTS/CONTRIBUTIONS ARE DEPUTED BY THE ASSESSEE COMPANY WITHIN THE DUE DATE OF FILING THE RETURN OF INCOME U/S. 139(1) OF THE ACT. THE LD. CIT(A) RELIED ON THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD, AND DIRECTE D THE ASSESSING OFFICER TO DELETE THE ADDITION AND ALLOWED THE GROUND OF THE ASSESSEE . :-9-: I.T.A. NO. 3006/MDS/2016 9. ON APPEAL TO TRIBUNAL BY REVENUE, THE LD. DR ARG UED THAT THE CIT(A) HAS ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANC E U/S. 2(24)(X) OF THE ACT WITHOUT CONSIDERING THE FACTS THAT PAYMENT OF PF/ES I RECEIVED BY THE EMPLOYER AND HAS TO BE DEPOSITED WITHIN DUE DATE SPECIFIED U NDER THE RESPECTIVE ACT AND THE PROVISIONS OF SECTION 43B OF THE ACT ARE APPLIC ABLE ONLY TO EMPLOYERS CONTRIBUTION AND PRAYED FOR ALLOWING THE GROUND. C ONTRA, THE LD. AR RELIED ON THE ORDERS OF THE CIT(A) AND JUDICIAL DECISIONS AND OPPOSED THE GROUNDS. 10. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MA TERIAL ON RECORD AND JUDICIAL DECISIONS CITED. THE SOLE GROUND ENVISAGED BY THE LD. AR THAT THE ASSESSEE COMPANY HAS COMPLIED THE CONDITIONS OF PAY MENT OF PF/ESI UNDER THE RESPECTIVE STATUES BUT THERE WAS A DELAY IN PAYMENT S AND ASSESSEE IS LIABLE FOR PAYMENT OF INTEREST ALSO. BUT UNDER THE PROVISIONS OF INCOME TAX ACT THE ASSESSEE COMPANY HAS DEPOSITED EMPLOYEES CONTRIBUTI ON OF ESI AND EPF BEFORE TIME LIMIT SPECIFIED U/S.139(1) OF THE ACT AND COVE RED BY THE PROVISIONS OF SEC. 43B OF THE ACT. WE FOUND SIMILAR ISSUE WAS CONSIDER ED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. INDUSTRIAL SECURI TY & INTELLIGENCE INDIA PVT. LTD TCA NO. 585 & 586/2015 AND HAS HELD AS UNDER:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUSIONS LTD. REPORTED IN 319 ITR 306, WHEREBY, THE SUPREME COURT HELD THAT OMISS ION OF SECOND PROVISO TO SECTION 43B AND AMENDMENT TO FIRST PROVI SO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETRO SPECTIVELY, I.E., WITH EFFECT FROM 1.4.1988 I.E., THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT V. AMIL LTD. REPORTED IN 321 ITR 508 HELD :-10-: I.T.A. NO. 3006/MDS/2016 THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEE'S CONTR IBUTION TOWARDS PROVIDENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UN DER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVIS IONS OF SECTION 43B AS AMENDED BY FINANCE ACT, 2003. WE RESPECTFULLY FOLLOW THE JURISDICTIONAL HIGH COUR T DECISION AND WE FIND THE LD. CIT(A) HAS DEALT ON THE PROVISIONS AND FACT AND JUR ISDICTIONAL HIGH COURT DECISIONS AND DIRECTED AO TO DELETE THE ADDITION AN D ACCORDINGLY WE UPHOLD THE ACTION OF THE CIT(A) AND DISMISS THE GROUNDS OF THE REVENUE. IN THE RESULT, REVENUE APPEAL IN ITA NO. 3006/MDS/ 2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 13TH DAY OF APRIL, 2017 AT CHENNAI. SD/ - ( . ) ( A. MOHAN ALANKAMONY ) # / ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) ) # /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 13TH APRIL, 2017 JPV & )'23 43 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 )'' /DR 6. 9 /GF