Delhi HC Upholds Exception u/s 40A of Income Tax Act in favour of Mitsubishi Corporation

The Delhi High Court has ruled that a deduction for employees' contributions to Provident Fund (PF) or Employee State Insurance (ESI) is allowable only if deposited by the employer on or before the statutory due date. The court emphasized the distinction between the employer's and employee's contributions, stating that the former is a business expense while the latter is a trust fund. The court's decision clarifies that late deposits of employee contributions, even if made before the filing of the return, are not eligible for deduction under Section 36(1)(va) of the Income Tax Act. This ruling aligns with the legislative intent of the Act.