M/s. Powerware India Pvt. Ltd., Bhubaneswar v. ITO, Ward-1(2), Bhubaneswar

ITA 206/CTK/2017 | 2012-2013
Pronouncement Date: 29-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 20622114 RSA 2017
Assessee PAN AACCP1607R
Bench Cuttack
Appeal Number ITA 206/CTK/2017
Duration Of Justice 6 month(s) 6 day(s)
Appellant M/s. Powerware India Pvt. Ltd., Bhubaneswar
Respondent ITO, Ward-1(2), Bhubaneswar
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 29-11-2017
Assessment Year 2012-2013
Appeal Filed On 23-05-2017
Judgment Text
. . IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH CUTTACK BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER ./ ITA NO. 206 / CTK /20 1 7 ( / ASSESSMENT YEAR : 20 12 - 20 1 3 ) M/S POWERWARE INDIA PVT. LTD. 6 A ZONE - B MANCHESWAR INDUSTRIAL ESTATE BHUBANESWAR - 751010 VS. ITO WARD - 1(2) BHUBANESWAR ./ ./ PAN/GIR NO. : A ACCP 1607 R ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI NONE /REVENUE BY : SHRI D.K.PRADHAN DR / DATE OF HEARING : 2 8 / 1 1 /201 7 / DATE OF PRONOUNCEMENT 29 / 11 /201 7 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1 BHUBANESWA R DATED 18.01.2017 . 2. IN GROUND NO.1 OF THE APPEAL THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION MADE BY THE AO U/S.40(A)(IA) OF THE ACT AMOUNTING TO RS.2 07 642/ - . 3. BRIEF FACTS OF THE CASE ARE THAT THE A O OBSERVED THAT THE ASSESSEE HAS PAID RS.1 46 587/ - TO K1 SECURITY SERVICES FOR PROVIDING SECURITY SERVICES WITHOUT DEDUCTING TDS UNDER THE PROVISIONS OF SECTION 194C OF THE ACT. HE ALSO OBSERVED THAT THE ASSESSEE HAS PAID INTEREST OF RS.61 055/ - TO TATA FINANCE LTD. WITHOUT DEDUCTING TDS U/S.194A OF THE ACT. THEREFORE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT HE DISALLOWED RS.2 07 642/ - (RS.1 46 587 + RS.61 055/ - ). ITA NO. 206 /CTK/201 7 2 4. ON APPEAL THE CIT(A) OBSERVED THAT THE ASSESSEE SUBMITTED THAT THE P AYEES HAVE ALREADY PAID THE TAXES ON THEIR INCOMES WHICH INCLUDE THE RECEIPTS FROM THE ASSESSEE. HE OBSERVED THAT NO EVIDENCE WAS FURNISHED IN SUPPORT OF THE SAME. HE ALSO OBSERVED THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WAS EFFECTIVE ONLY FROM THE A.Y.2013 - 2014 AND CANNOT COME TO THE RESCUE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2012 - 2013. 5. LD. AR OF THE ASSESSEE SUBMITTED THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. 377 ITR 635 (DEL) HAS HE LD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIVE EFFECT FROM 01.04.2005. HENCE HE SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN OBSERVING THAT THE SECOND PROVISO TO SECTION 40(A)(IA) O F THE ACT WAS NOT APPLICABLE TO THE ASSESSEE IN PRESENT YEAR UNDER APPEAL. HE SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS REM ANDED BACK TO THE FILE OF AO TO VERIFY WHETHER THE PAYEES HAVE PAID THE TAXES ON THE AMOUNT RECEIPT FROM THE ASSESSEE OR NOT. IF TH E AO FINDS THAT THE PAYEES HAVE PAID THE TAXES ON THE AMOUNT RECEIVED FROM THE ASSESSEE ON THE BASIS OF EVIDENCE TO BE FILED BY THE ASSESSEE BEFORE THE AO THEN NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT SHOULD BE MADE. 6. ON THE OTHER HAND LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT THE DISALLOWANCE HAS BEEN MADE BY THE AO FOR RS.2 07 642/ - ON THE GROUND THAT NO TDS WAS DEDUCTED BY THE ASSESSEE FROM THE PAYMENTS MADE U/S.194C AND SECTION 194A OF THE ACT. I FIND THAT ITA NO. 206 /CTK/201 7 3 THE CIT(A) HAS HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WHICH PROVIDES THAT IF THE PAYEES HAVE ALREADY PAID TAXES ON THEIR INCOME WHICH INCLUDE THE RECEIPT FROM THE ASSESSEE THEN NO ADDITION U/S.40(A)(IA) OF THE ACT IS TO BE MADE IS PROSPECTIVE AND APPLI CABLE FROM THE ASSESSMENT YEAR 2013 - 2014 AND NOT THE PRESENT ASSESSMENT YEAR OF THE ASSESSEE WHICH IS 2012 - 2013. I FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD. 377 ITR 635 (SUPRA) HAS HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIVE IN OPERATION W.E.F 01.04.2005. THEREFORE I FIND THAT THE ORDER OF THE CIT(A) TO THAT EXTENT IS NOT TENABLE. FURTHER I FIND THAT THE CIT(A) OBSERVED THAT NO EVIDE NCE WAS PRODUCED BEFORE HIM TO SHOW THAT THE RECIPIENT OF THE AMOUNT HAVE PAID THE DUE TAXES BY SHOWING THE AMOUNTS AS THEIR INCOME IN THEIR RETURN OF INCOME FILED BY THEM. THEREFORE I FEEL IT FIT AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO FOR EXA MINATION AS TO WHETHER THE RECIPIENT OF THE AMOUNT HAVE PAID TAXES ON THE AMOUNTS RECEIVED FROM THE ASSESSEE OR NOT. IF THE AO FINDS THAT THE RECIPIENTS OF THE AMOUNT HAVE PAID DUE TAXES ON THE AMOUNT RECEIVED FROM THE ASSESSEE THEN NO DISALLOWANCE U/S.40 (A)(IA) OF THE ACT SHOULD NOT BE MADE BY THE AO. THE ASSESSEE IS ALSO DIRECTED TO FILE ALL EVIDENCES IN SUPPORT OF THE CLAIM THAT THE RECIPIENT S OF THE AMOUNT HAVE PAID DUE TAXES ON THE AMOUNT RECEIVED FROM HIM. WITH THIS OBSERVATIONS THIS GROUND OF APPEA L OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 206 /CTK/201 7 4 8. IN GROUND NO.2 OF THE APPEAL THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1 25 576/ - U/S.36(1)(VA) OF THE ACT 9. BRIEF FACTS OF THE CASE ARE TH AT THE AO OBSERVED THAT THE ASSESSEE HAS NOT DEPOSITED THE EMPLOYEE SHARE OF EPF WITHIN THE DUE DATES PRESCRIBED IN THE SAID ACT. THE DETAILS OF WHICH ARE AS UNDER : - SL.NO. MONTH EMPLOYEES CONTRIBUTION (RS.) DATE OF DEPOSIT 1. APRIL 2011 10 625/ - 30.03. 2012 2. MAY 2011 11 313/ - 30.03.2012 3. JUNE 2011 10855/ - 30.03.2012 4. JULY 2011 10415/ - 30.03.2012 5. AUGUST 2011 8595/ - 30.03.2012 6. SEPTEMBER 2011 9002/ - 30.03.2012 7. OCTOBER 2011 9345/ - 12.09.2012 8. NOVEMBER 2011 8968/ - 12.09.2012 9. DECEM BER 2011 8674/ - 12.09.2012 10. JANUARY 2012 8543/ - 12.09.2012 11. FEBRUARY 2012 8269/ - 12.09.2012 12. MARCH 2012 7923/ - 15.09.2012 TOTAL 112527/ - THEREFORE HE DISALLOWED THE DEDUCTION FOR RS.1 25 576/ - AND ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE. ON APPEAL THE CIT(A) CONFIRMED THE ACTION OF AO. 10. LD.AR OF THE ASSESSEE RELIED ON THE DECISION OF T HE HONBLE DELHI HIGH COURT IN CIT VS. AIMIL LIMITED [2010] 321 ITR 508 ( DEL) WHEREIN IT WAS HELD THAT THE EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI ETC. DEPOSITED AFTER THE DUE DATE BUT BEFORE THE TIME ALLOWED FOR FILING THE RETURN U/S.139(1) WILL NOT CALL FOR ANY DISALLOWANCE U/S.36(1)(VA) OF THE ACT . ON THE OTHER HAND LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. I FIND THAT TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA (P) LTD.VS DCIT (2014) 366 ITR 408 VIDE JUDGMENT DATED ITA NO. 206 /CTK/201 7 5 4.2.2014 HELD THAT THE WORD CONTRIBUTION WOULD MEAN IN EPF AND ESI ACT REFERS TO BOTH EMPLOYEES AND EMPLOYERS CONTRIBUTION TO PF AND THER EFORE NO DISALLOWANCE IS TO BE MADE UNDER SECTION 43B. THEREFORE DEDUCTION IS ALSO AVAILABLE TO EMPLOYEES CONTRIBUTION TO PF U/S.43B OF THE ACT. FURTHER THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. STATE BANK OF BIKANER AND JAIPUR (2014) 3 63 ITR 70 (RAJ) (HC) AND JAIPUR VIDYUT VITARAN NIGAM LTD. (2014) 363 ITR 307 (RAJ) HELD THAT SECTION 43B OVERRIDES SECTION 36(1)(VA) AND DEDUCTION IS AVAILABLE FOR EMPLOYEES CONTRIBUTION U/S.43B OF THE ACT TO SAME EFFECT IS THE DECISION OF HONBLE UTTARA KHAND HIGH COURT IN THE CASE OF CIT VS.KICHHA SUGAR COMPANY LTD . (2013) 356 ITR 351 (UTTARAKHAND H C) ORDER DATED 20.5.2013. TO THE SAME EFFECT IS ALSO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SAN GH LTD (2013) 35 TAXMANN.COM 616 (RAJ). THE CONTRARY VIEW IS THAT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS GUJARAT STATE ROAD TRANSPORT CORPN. (2014) 366 ITR 170 (GUJ) ORDER DATED 26.12.2013 WHEREIN IT WAS HELD THAT 43B DOES NOT APPLY TO EMPL OYEES CONTRIBUTION AND ONLY SECTION 2(24)(X) READ WITH SECTION 36(1)(VA) IS APPLICABLE. THEREFORE EMPLOYEES CONTRIBUTION IS DISALLOWED IF NOT PAID WITHIN THE DUE DATE AS PER EPF/ESI ACT. THE SAID DECISION WAS RENDERED AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS (SUPRA). THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS VIJAYA SHREE LTD. (2011) TMI 30 HELD THAT EMPLOYEES CONTRIBUTION TO PF/ESI IS ALSO COVERED BY SECTION 43B AND IS ALLOWABLE AS DEDUCTION IF PAID BEFORE DUE DATE OF FILING THE RETURN OF ITA NO. 206 /CTK/201 7 6 INCOME. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD. (2014) 368 ITR 749 HAS HELD THAT EMPLOYEES CONTRIBUTION TO PF AND ESI IS ALLOWABLE IF THE SAME IS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S.2(24)(X) R.W.S. 36(1)(VA) AND 43B OF THE ACT. THE HONBLE DELHI HIGH COURT IN CIT VS. AIMIL LIMITED [2010] 321 ITR 508 (DEL) HAS HELD THAT THE EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI ETC. DEPOSITED AFTER T HE DUE DATE BUT BEFORE THE TIME ALLOWED FOR FILING THE RETURN U/S.139(1) WILL NOT CALL FOR ANY DISALLOWANCE U/S.36(1)(VA). THE HONBLE PATNA HIGH COURT IN THE CASE OF BIHAR STATE WAREHOUSING CORPORATION LTD VS CIT (2016) 71 TAXMANN.COM 247(PATNA) AFTER C ONSIDERING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GHATGE PATIL TRANSPORTS LTD AND P&H HIGH COURT IN THE CASE OF CIT VS. HEMLA EMBROIDERY MILLS (P) LTD. 2014) 366 ITR 167 (P&H) AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION LTD. (SUPRA) HAS HELD AS UNDER: 9.ON FURTHER APPEAL BOTH BY THE DEPARTMENT AND THE ASSESSEE THE APPEAL OF THE DEPARTMENT WAS DISMISSED AS ALSO THAT OF THE ASSESSEE. AGGRIEVED BY THE SAME THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE. THE APPEAL WAS ADMITTED ON THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: '(I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL IS JUSTIFIED IN UPHOLDING THE ADDITION OF RS.8 32 507/ - MADE UNDER SECTION 2 (24)(X) READ WITH SECTION 36(L)(V A) OF THE INCOME - TAX ACT? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL IS CORRECT IN HOLDING THAT THE PROVISION FOR GRATUITY WAS NOT MADE TOWARDS APPROVED GRATUITY FUND AND THAT THE GRATUITY HAS NOT BECOME PAYABLE DURING THE FINANCIAL YEAR AND THAT THE PROVISION HAS NOT BEEN MADE ON ACTUARIAL VALUATION BASIS?' 10. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL WAS NOT JUSTIFIED IN NOT FOLLOWING ITS EARLIER ORDER DATED 20.12.2001 PASSED IN THE CASE OF M/S. SINTRA LTD. V. ACIT I.T.APPEAL NO. ITA NO. 206 /CTK/201 7 7 497/PAT/1996 IN WHICH UNDER SIMILAR CIRCUMSTANCES IT WAS HELD THAT THE TREATMENT METED OUT TO THE EMPLOYEES' CONTRIBUTION BY DISALLOWING THE SAME WAS ALSO ON THE BASIS I.E. THE DELAY IN CREDIT TO THE APPROPRIATE AUTHORITIES WHICH WAS CONDONED BY THE APPROPRIATE AUTHORITIES AND THUS THE CONTENTION OF THE DEPARTMENT WAS FOUND TO BE WITHOUT FORCE AND IT WAS HELD THAT THERE WAS NO REASON TO CONSIDER THE AMOUNT AS INCOME FROM OTHER SOURCES OF THE ASSESSEE AND THE ADDITION WAS DELE TED. IT IS SUBMITTED THAT THE PRESENT MATTER IS PRACTICALLY ON THE SAME FOOTING AS THE EMPLOYEES' CONTRIBUTIONS WERE PAID WITHIN DUE DATE OF FILING OF RETURN AND AS A MATTER OF FACT SOME OF THE AMOUNTS OF EMPLOYEES' CONTRIBUTION WAS DEPOSITED WELL WITHIN T HE FINANCIAL YEAR 1.4 2002 TO 31.03.2003 ITSELF. IT IS FURTHER SUBMITTED BY LEARNED COUNSEL THAT THERE WAS NO REASON TO TREAT/CONSIDER THE SAID DELAYED PAYMENT IN A DIFFERENT MANNER FROM THE EMPLOYER'S CONTRIBUTION TO THE PROVIDENT FUND AND BOTH SHOULD HAV E BEEN DEALT WITH UNDER SECTION 43B OF THE ACT AND THERE WAS NO JUSTIFICATION FOR INVOKING SUB - SECTION (2) OF SECTION 24 (X) READ WITH SECTION 36 (1) (VA) OF THE ACT FOR DISALLOWING THE SAME. 11. IN SUPPORT OF THE AFORESAID STAND LEARNED COUNSEL FOR THE APPELLANT RELIES UPON A DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUSIONS LTD. [20091 319 ITR 306/185 TAXMAN 416 . FOLLOWING WHICH THE BOMBAY HIGH COURT IN THE CASE OF CIT V. GHATGE PATIL TRANSPORTS LTD. [2014] 368 ITR 749/228 TAXMAN 340/ 53 TAXMAIM.COM 141 AND PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. HERNIA EMBROIDERY MILLS (P.) LTD. [20141 366 ITR 167/217 TAXMAN 207/37 TAXMANN.COM 160 (PUNI. & HAR.) HAVE HELD THA T BOTH THE EMPLOYEES' AND EMPLOYER'S CONTRIBUTIONS ARE COVERED UNDER THE AMENDMENT TO SECTION 43B OF THE INCOME TAX ACT AND THE ALOM EXTRUSIONS JUDGMENT OF THE SUPREME COURT AND THEREFORE THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE PAYMENTS THEREOF WERE SUB JECT TO BENEFITS OF SECTION 43B OF THE ACT. 12. LEARNED COUNSEL FOR THE INCOME - TAX DEPARTMENT ON THE OTHER HAND SUBMITS THAT THE TRIBUNAL HAS RIGHTLY MADE A DISTINCTION IN THE MATTER WITH REGARD TO DELAY IN PAYMENT OF EMPLOYEES' CONTRIBUTION TO THE PROV IDENT FUND AND DELAYED PAYMENT OF EMPLOYER'S CONTRIBUTION TO PROVIDENT FUND. IT IS SUBMITTED THAT THE APPEAL OF THE DEPARTMENT HAS BEEN REJECTED BY THE TRIBUNAL MAKING A DISTINCTION BETWEEN THE TWO PROVISIONS WHICH APPEAR TO BE JUSTIFIED. IT IS URGED THAT ONLY THE PAYMENT OF EMPLOYER'S CONTRIBUTION TO PROVIDENT FUND IS COVERED BY THE PROVISION OF SECTION 43B OF THE ACT AND EMPLOYEES' CONTRIBUTION IS SQUARELY COVERED BY THE PROVISIONS OF SECTION (2) (24) (X) READ WITH SECTION 36(L)(VA) OF THE ACT. IT IS THU S SUBMITTED THAT THE TRIBUNAL HAS RIGHTLY DECIDED THE PRESENT MATTER AND WAS NOT OBLIGED TO FOLLOW A WRONG DECISION EARLIER RENDERED IN MS. SINTRA'S CASE {SUPRA). 13. IN THE CASE OF ALOM EXTRUSIONS LTD. {SUPRA) THE APEX COURT HAS DEALT WITH THE HISTORY OF SECTION 43 B OF THE ACT ALONG WITH ITS PROVISO AND REFERRED TO THE FACT THAT THE AMENDMENTS WERE MADE THEREIN ON ACCOUNT OF DIFFICULTIES FELT IN COMPLYING WITH THE PROVISIONS OF THE SAID SECTION VIS - A - VIS THE PERIOD PRESCRIBED UNDER THE EMPLOYEES PROV IDENT FUND ACT. EARLIER BY WAY OF THE FIRST ITA NO. 206 /CTK/201 7 8 PROVISO THE BENEFIT OF DEDUCTION WAS RESTRICTED ONLY TO TAX DUTY CESS OR FEE PAID AFTER THE CLOSING OF THE ACCOUNTING YEAR BUT BEFORE THE DATE OF FILING OF THE RETURN OF INCOME UNDER SECTION 139 (1) BUT NOT TO LABOUR WELFARE FUNDS. THE SECOND PROVISO WAS THEN INSERTED TO ALLOW DEDUCTION OF CONTRIBUTION TO INTER ALIA ANY PROVIDENT FUND IF MADE BEFORE THE DUE DATE AS PER THE EMPLOYEES PROVIDENT FUND ACT DURING THE PREVIOUS YEAR. THIS AGAIN RESULTED IN IMPLEMENTA TION PROBLEMS AS A RESULT OF WHICH THE SECOND PROVISO WAS DELETED AND THE FIRST PROVISO WAS AMENDED BRINGING ABOUT UNIFORMITY BY EQUATING TAX DUTY AND FEE WITH CONTRIBUTION TO LABOUR WELFARE FUNDS. IT WAS MADE CLEAR THAT THE BENEFIT OF DEDUCTION WOULD BE APPLICABLE PROVIDED THE PAYMENTS ARE MADE BEFORE THE DUE DATE FOR FILING OF THE RETURN. 14. FROM A PERUSAL OF THE AFORESAID DECISION IT IS EVIDENT THAT IT DOES NOT SPECIFICALLY REFER TO THE EMPLOYEES' CONTRIBUTION OR EMPLOYER'S CONTRIBUTION AND BOTH HA VE BEEN TREATED ON THE SAME FOOTING. SO FAR AS DIFFICULTIES IN COMPLYING WITH THE DUE DATE UNDER THE EPF ACT VIS - A - VIS THE PREVIOUS YEAR OF THE INCOME - TAX IS CONCERNED THERE CAN BE NO DISTINCTION BETWEEN THE PAYMENT OF EMPLOYEES OR EMPLOYER'S CONTRIBUTION AND THE SAME DIFFICULTIES WOULD BE FACED FOR BOTH. IN ALOM EXTRUSIONS' CASE THE COURT HAS BROADLY DEALT WITH CONTRIBUTION TO BE MADE BY THE EMPLOYERS TO THE LABOUR WELFARE FUND WITHOUT MAKING ANY DISTINCTION BETWEEN EMPLOYEES AND EMPLOYER'S CONTRIBUTIONS AS THE DEPOSITS HAVE TO BE MADE BY THE EMPLOYER OF BOTH TYPE OF CONTRIBUTIONS. 15. THE ISSUE AS TO WHETHER A DISTINCTION CAN BE MADE BETWEEN THE EMPLOYEES' CONTRIBUTION AND EMPLOYER'S CONTRIBUTION WITH REGARD TO APPLICABILITY OF SECTION 43B OF THE ACT WAS SQUARELY RAISED BEFORE THE BOMBAY HIGH COURT IN GHATGE PATIL TRANSPORTS CASE {SUPRA) AND BEFORE THE PUNJAB AND HARYANA HIGH COURT IN HERNIA EMBROIDERY MILLS' CASE {SUPRA) AND BOTH THE HIGH COURTS HAVE ANSWERED THE SAME HOLDING THAT BOTH THE EMPLOYEES' AND EMPLOYER'S CONTRIBUTIONS ARE COVERED BY THE AMENDMENT OF SECTION 43B OF THE ACT AFTER CONSIDERING ALOM EXTRUSIONS'CASE {SUPRA). 16. ALTHOUGH TECHNICAL READING OF SECTION 43B AND THE PROVISIONS OF SUB - SECTION (2) OF SECTION 24 (X) READ WITH SECTION 36 (1) (VA) OF THE ACT CREATES THE IMPRESSION THAT THE EMPLOYEES' CONTRIBUTION WOULD CONTINUE TO BE TREATED DIFFERENTLY UNDER A DIFFERENT HEAD OF DEDUCTION AS THE HEAD OF DEDUCTION IS SEPARATE UNDER SECTION 43 B AND SECTION 36 OF THE ACT BUT ON A BROADER RE ADING OF THE AMENDMENTS MADE TO SECTION 43B REPEATEDLY AND THE INTENTION OF PARLIAMENT THERE APPEARS TO BE SUFFICIENT JUSTIFICATION FOR TAKING THE VIEW THAT THE EMPLOYEES' AND THE EMPLOYER'S CONTRIBUTION OUGHT TO BE TREATED IN THE SAME MANNER. IN ALOM EXT RUSIONS'CASE (SUPRA) AS POINTED OUT EARLIER THE SUPREME COURT HAS NOT MADE ANY DISTINCTION BETWEEN THE TWO AS SIMILAR PROBLEM OF IMPLEMENTATION WOULD ARISE IN BOTH THE CASES ALTHOUGH SPECIFIC ISSUE WAS NOT RAISED THEREIN; BUT BOTH THE BOMBAY HIGH COURT AND THE PUNJAB AND HARYANA HIGH COURT IN THE ABOVE REFERRED CASES AFTER CONSIDERING ALOM EXTRUSIONS' CASE (SUPRA) HAVE ANSWERED THE QUESTION TREATING THE TWO CONTRIBUTIONS ON THE SAME FOOTING. ITA NO. 206 /CTK/201 7 9 17. THUS I AM INCLINED TO RESPECTFULLY AGREE WITH THE VIEW T AKEN BY THE BOMBAY HIGH COURT AND THE PUNJAB AND HARYANA HIGH COURT. 1 2 . IT IS ALSO SETTLED POSITION OF LAW THAT IF THERE ARE CONTRARY VIEWS OF DIFFERENT HIGH COURTS AND NONE OF THEM IS THE HONBLE JURISDICTIONAL HIGH COURT THEN THE DECISION FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED. THIS VIEW IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLES PRODUCT LTD. 88 ITR 192 (SC). THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF ESSAE TERAOKA (P) LTD.VS DCIT (SUPRA) AND OTHER DECISIONS REFERRED ABOVE (SUPRA) I HOLD THAT EMPLOYEES CONTRIBUTION TO PF AND ESI IS ALLOWABLE DEDUCTION TO THE ASSESSEE IF DEPOSITED BEFORE DUE DATE OF FILING OF RETURN U/S.139(1)OF THE ACT. 13 . IN TH E INSTANT CASE IT IS NOT IN DISPUTE THAT THE CONTRIBUTION TO PF WAS DEPOSITED BY THE ASSESSEE BEFORE DUE DATE OF FILING THE RETURN OF INCOME U/S.139(1) OF THE ACT. THEREFORE I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF OF RS.1 25 576/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 14 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED PARTLY FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 11 /201 7 . SD/ - (N. S. SAINI) / ACCOUNTANT MEMBER CUTTACK ; DATED 29 / 11 /201 7 . . / PKM SENIOR PRIVATE SECRETARY ITA NO. 206 /CTK/201 7 10 / COPY OF THE ORDER FORWARDED TO : / BY ORDER ( SENIOR PRIVATE SECRETARY ) / ITAT CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A) 4. / CIT 5. / DR ITAT CUTTACK 6. / GUARD FILE. //TRUE COPY//