2018 (8) TMI 1849 - AT - Income Tax

Disallowance towards PF and ESI contributions - contributions paid beyond due date specified in respective Acts but before due date for filing the return of income u/s. 139 - HELD THAT - This issue of whether the PF and ESI contributions should be allowed as deduction when paid beyond due date specified in the respective Acts but before the due date for filing return of income is decided in favour of the assessee in the case of Ghadge Patil 2014 (10) TMI 402 - BOMBAY HIGH COURT . CIT(A) following the said decision deleted the disallowance. In the circumstances we do not find any infirmity in the order passed by the Ld.CIT(A). Grounds raised by the Revenue on this issue are rejected. Disallowance of depreciation on motor car and interest on car loan - claim denied as the vehicle was registered in the name of the relative of the Director - HELD THAT - CIT(A) following the decision of the Apex Court in the case of Mysore Minerals Ltd. v. CIT 1999 (9) TMI 1 - SUPREME COURT and CIT v. Dilip Singh Sardarsingh Bagga 1992 (9) TMI 74 - BOMBAY HIGH COURT wherein it has been held that depreciation is allowable in the hands of the company even if the vehicle is registered in the name of its Directors allowed the claim of the assessee. Similarly the interest paid on car loan is allowable as deduction. Thus we do not find any infirmity in the order passed by the Ld.CIT(A). The additional ground raised by the Revenue is rejected.

Summary

Issues:
1. Disallowance of PF and ESI contributions.
2. Disallowance of depreciation on motor car.
3. Disallowance of interest on car loan.

Disallowance of PF and ESI contributions:
The Revenue filed an appeal against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2012-13. The appeal challenged the deletion of disallowance made towards PF and ESI contributions paid beyond the due date specified in the Acts but before the due date for filing the return of income. The Assessing Officer disallowed these contributions, but the Ld.CIT(A) deleted the disallowance based on the decision of the Jurisdictional High Court in the case of Ghadge Patil. The Tribunal upheld the Ld.CIT(A)'s decision, stating that contributions paid before the due date for filing the return of income are allowable deductions.

Disallowance of depreciation on motor car:
The Assessing Officer denied depreciation on a BMW car purchased by the assessee, registered in a Director's relative's name. The assessee claimed that the car was purchased through a loan, used for business purposes, and the company repaid the loan through EMIs. The Ld.CIT(A) allowed the depreciation based on the decisions of the Apex Court and the Jurisdictional High Court, stating that depreciation is allowable even if the vehicle is registered in the name of the company's Directors.

Disallowance of interest on car loan:
Similarly, the Assessing Officer denied the deduction of interest on the car loan. However, the Ld.CIT(A) allowed the claim based on the same decisions as in the case of depreciation. The Tribunal upheld the Ld.CIT(A)'s decision, stating that interest paid on the car loan is an allowable deduction in the hands of the company, finding no infirmity in the order passed by the Ld.CIT(A).

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the decisions of the Ld.CIT(A) regarding the disallowance of PF and ESI contributions, depreciation on the motor car, and interest on the car loan.