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Today my CA has added back employees contribution of esi and pf to net profit

Biswas Sharma (Article Assistance) (84 Points)

15 July 2019

Today my CA has added back employees contribution of esi and pf to net profit which was paid after the due date of respective law but before filing of return of income. please tell me the reason behind doing this.

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6 Replies

sabyasachi mukherjee (27574 Points)
Replied 15 July 2019

if u have paid within the due dates it's a deductible expense covered under INCOME FROM BUSINESS AND PROFESSION.

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rama krishnan (12239 Points)
Replied 16 July 2019

employees contribution has to be deposited within due date under respective law in force else it's not eligible to claim as deduction under section 43B

Mehul porwal (266 Points)
Replied 16 July 2019

employees contribution will not be allowed if paid after due date.

Biswas Sharma (Article Assistance) (84 Points)
Replied 16 July 2019

why employee contribution is not allowed as deduction? as per sec 43B due date means date of filling return under income tax act since I have paid these contribution before filling of return it should be allowed as deduction

Mehul porwal (266 Points)
Replied 16 July 2019

There are two conflicting decided case laws
1. CIT v Gujrat State Road transport Corp. (2014) 366 ITR 170
2. CIT v Khichha sugar co. Ltd. (2013) 356 ITR 351

It is allowed as per cl no. 2 but disallowed as per cl no.1