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Judgment
ORDER
This assessee’s appeal for Assessment Year 2020-21 arises against the Addl./JCIT( A) , Thane’s DIN & order No. ITBA/APL/ S/250/2025-26/1082959117(1) dated 25.11.2025, in proceedings u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the p arties at length. Case file perused.
Learned counsel submits during the co urse of hearing that the assessee’s sole substantive ground herein is directed against both the lower authorities re spective findings disallowing it’s ESI/P F deductio n claim of Rs.28,57,641/- u/s 36(1)(va) of the Act.
That being the case, the Revenue could hardly dispute that the assessee is admittedly held eligible for claiming section 80JJAA deduction claimed in the income tax return amounting to Rs.Rs.19,07,000/-; as restricted to Rs.8.74 (in crores) as per it’ s computation. This being the clinching factual position, it is noticed that the CBDT’s landmark circular No. 37/2016 has made it clear that such a disallo wance under regular business heads u/s 28 to 43 of the Act only enhances the profit elig ible for deduction in computation of business income u/s 28 to 43 of the Act only enhances the profit elig ible the Chapter-VI deduction. I ther efore conclude in this factual backdrop that the impugned se ction 36(1)(va) disallowance made in the assessee’s hands is not sustainable in law. Deleted in light of the CBDT’s foregoing circular therefore .
This assessee’s appeal is allowed.