In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the payments towards Labour Welfare Board and provident Fund are deductible from the total income of the assessee if the payments are made within the grace period.
The assessee, M/s Reliance Jute Mills International Ltd, deposited employees contribution towards Labour Welfare Board and Provident Fund. The AO denied deduction of the same from the total income of the assessee by invoking section 36(1)(va) r.w.s 2(24)(x). The Officer observed that the payments were not made within due date.
Before the Tribunal, the assessee maintained that though payments were not made in due date, but paid within grace period and placed reliance on decision of Hon’ble High Court of Madras.
The bench noticed that in the case of Ganapathy Mills, the Madras High Court held that the deduction can be allowed if the payments are made within the grace period.Relying on the above decision, the bench allowed the claim of the assessee.
Read the full text of the order below.
