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2013 (8) TMI 519 - AT - Income TaxPF and ESIC contribution - Addition made on account of delayed payment - CIT deleted addition - Held that - if the amount is paid before filing the return under Section 139(1) then no disallowance can be made - If the amount is paid within the grace period then the amount needs to be treated paid in time - Following decision of CIT Vs. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT - Decided against Revenue. Reopening of assessment - Addition on account of depreciation - Held that - reasons have been recorded on the basis of contents of balance sheet filed along with return of income. The assessment in this case was completed under Section 143(3) on 28-1- 2006 and the return was filed on 25-11-2003 originally. The case of the assessee does not fall under the exception clause provided under section 147(a), where the assessment can be reopened after four years, if the AO found that the assessee has not disclosed all the particulars of income completely and truly - This is not a case of the AO that the assessee has not disclosed fully and truly all materials facts in respect of income earned during the year - While computing the assessment, the block of assessment cannot be segregated - Following decision of Hindustan Lever Limited Vs. ACIT 2004 (2) TMI 41 - BOMBAY High Court - Decided against Revenue.
Issues:
1. Appeal by department against CIT(A) order regarding late payment of PF and ESIC contributions. 2. Appeal by assessee against reopening of assessment and disallowance of depreciation on motor cars. Issue 1: Appeal by department regarding late payment of PF and ESIC contributions The department appealed against the CIT(A) order concerning the late payment of Rs.11,85,253/- towards employees' and employers' contributions to PF and ESIC. The AO initially disallowed this amount as the contributions were not made within the prescribed time. However, the CIT(A) deleted the addition citing precedents where timely payment before filing the return exempted disallowance. Subsequently, a miscellaneous application was filed emphasizing that employees' contribution should not be added, and the Tribunal recalled its order. The Tribunal, after considering arguments, upheld the CIT(A)'s decision. It confirmed that the employees' contribution was paid before the return filing deadline, aligning with the Supreme Court's ruling in Alom Extrusions Ltd. case. The Tribunal also agreed with the CIT(A) on the remaining amount of Rs.4,67,016/-, stating that if paid within the grace period, the amount should be considered paid on time. The decision was in line with the Tribunal's previous ruling in the LKP Securities Ltd. case. Consequently, the appeal of the department was dismissed. Issue 2: Appeal by assessee against reopening of assessment and disallowance of depreciation on motor cars The assessee contested the reopening of assessment under Section 147/148 and the disallowance of Rs.2,94,298/- depreciation on motor cars. The assessee argued that the reassessment after four years lacked evidence of non-disclosure of material facts. Referring to the Sri Sakthi Textiles Ltd. case, it contended that the reassessment was legally flawed. On merit, the assessee asserted that no addition should be made for depreciation on motor cars as they were part of the block of assets. Regarding the PF and ESIC disallowance, the assessee reiterated arguments made during the department's appeal. The Tribunal found in favor of the assessee, ruling that the reassessment was unjustified as all relevant details were disclosed during the original assessment under Section 143(3). Citing the Hindustan Lever Limited case, the Tribunal held that reopening the assessment without new material after four years was unlawful. Consequently, the assessment was quashed. Additionally, the disallowed depreciation was deemed unwarranted as the assets were part of a block. The Tribunal deemed the PF and ESIC issue moot as it was addressed in the department's appeal. As a result, the department's appeal was dismissed, and the assessee's appeal was partially allowed. This detailed analysis of the judgment provides a comprehensive understanding of the issues raised, the arguments presented, and the Tribunal's decisions on each matter.
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