MMJ PLANTATIONS Vs. ADDL COMMR OF INCOME TAX

JUDGEMENT

(1.) PETITIONER is an assessee under the Income Tax Act. He challenged Ext. P3. The Income tax Authorities held that an amount of Rs. 2,02,250/- debited in the profit and loss account towards contribution to E. P. F. is not allowable as it pertains to the earlier assessment years. According to the petitioner, the decision arrived at by the authorities is contrary to the provisions of Section 43b of the Income Tax Act.

(2.) THE Commissioner of Income tax in Ext. P3 order held that by virtue of the second proviso to Section 43b, no deduction in respect of the amounts mentioned earlier shall be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub Section (1) of Section 36. Thus considering the provisions contained in Section 43b it was held that by virtue of the second proviso, deduction could be allowed only in computing the income of the previous year was actually paid. It is fairly submitted by the learned counsel for the petitioner that this issue has since been decided against the assessee by a Division Bench of this Court in Commissioner of Income Tax v. South India Corporation Ltd. ( (2000) 242 ITR 114 ). It was held in the said decision that though Section 43b of the Income Tax Act is relatable to payments actually made, the modality to be adopted in respect of payments of contribution to any provident fund, superannuation fund or gratuity fund or any other fund is prescribed thereunder. However a time limit has also been fixed. During that period deduction can be claimed. The expression "due date" mentioned in the Explanation to Clause (va) means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund. The amount will be deductible only if the assessee credits the amount to the employee's account in the relevant fund on or before the day by which he is legally or contractually required to do so and the right to deduction would be lost if the sum is credited after the due date. In view of the above decision, there is no merit in the contention raised in this original petition. Accordingly, the original petition is dismissed.