Esic & pf employees contb is allowed as deduction u/s 43b?

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This query is : Resolved

Dhokia Hardik (Querist)

23 June 2012 If Company has paid ESI & PF contribution of the Employee's after due date of respective Act ie. ESIC & PF Act but before the due date of filing return i.e 30/09/2012 can claim as deduction u/s 43B as it is disallowed u/s 36(i)(va)& not u/s 43B?
we found that so many case Positive case laws in the favour of the assessee & it was found that it is allowed as deduction mostly on the Base of case of Vinay Cement Limited.(Apex Court)
other case laws namely
1. AIMIL LTD (ITA No. 1063/2008)
2. M/s. Net 4 India Ltd.(ITA No. 204/2009)
3. Spearhead Digital Studio P. Ltd (ITA No. 755/2008)
4. Modipon Ltd (ITA No. 50/2009 & ITA No. 78/2009)
5. M/s. Ekta Agro Industries Ltd (ITA No. 1246/2008)
6. CIT v. P.M. Electronics Ltd. (ITA No. 475/2007 decided on 3.11.2008).
7. Pik Pen Private Limited

Where it is found that A.O disallowed the same & later on as per the Supereme court judgement on Vinay Cement Ltd based taken & all othe High court and all said to be allowed as deduction & then reversed by A.O for the same,

But it is found that A.O still not satisfied to allowed for the same as the same is disallowed u/s 36(i)(va) which is Specific deduction & can not claim specific deduction u/s 43B which is genral Deduction & everytime the case goes for appeal & furthermore.

So please Guid us for the same that we should claim for Employees Deduction if paid after due date provided under ESI & Pf Act but paid before Due date of filing of return i.e 30/09/2012.

Soumitra Basu

Soumitra Basu (Expert)

24 June 2012 In my opinion, you should claim the deduction as per law. You should not move according to whims of the AO.

CA CS CMA Sanjay Kumar Sareen

CA CS CMA Sanjay Kumar Sareen (Expert)

25 June 2012 It is worth noting that S.43B is applicable only to Employer‘s contribution and is not applicable to Employees‘ contribution.

Sec..36(1)(va)deduction shall be allowed for any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee‘s account in the relevant fund or funds on or before the due date.

Here Due Date means date by which assessee is required as an employer, to credit an employees‘ contribution to the employees‘ account in relevant fund.

Therefore AO is right in respect of Employees contribution

Dhokia Hardik

Dhokia Hardik (Querist)

03 July 2012 Respected Sir,
C.A Sanjay Kumar Sareen,

as it is challing to AO,
we can claim deduction u/s 43B or not?

Soumitra Basu

Soumitra Basu (Expert)

06 July 2012 May I draw your kind attention to the following judgment:
Payment of employees’ contribution made before the due date for filing of the return cannot be disallowed under section 43B of the Act or Section 2(24)(x) read with section 36(1)(va) of the Act – Alom Extrusions Ltd 319 ITR 306 (SC): AIMIL Ltd 229 CTR 418 (SC)

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