2021 (6) TMI 883 - AT - Income Tax

Claim of additional depreciation u/s 32 (1) (iia) - HELD THAT - As is brought to our notice that the issue of claim of additional depreciation under section 32 is recurring nature and we noticed that the respective assessing officers in assessment year 2012-13 and 2013-14 had disallowed the claim of additional depreciation and in those respective assessment years the issue was contested before coordinate benches of this tribunal and it was held in favour of the assessee 2019 (1) TMI 1899 - ITAT MUMBAI - Since this issue is already settled in favour of the assessee, we do not see any reason to interfere with the findings of Ld. CIT(A). Accordingly ground No. 1 raised by the revenue is dismissed. Delay in deposit of employees ESIC and labour welfare fund contribution - HELD THAT - In the case of the assessee, it is observed from Tax audit report submitted by the assessee that, it has received from its employees towards Employee Contribution fund within dates but deposited to the fund houses before filing ITR - As considered that Sec 43B applies to both employee and employer contributions and if the contributions are paid to the fund houses before filing ITR, no disallowance u/s 36(1)(va) is warranted. It is established that when the employee deposits both of its contribution and employees' contribution to the fund houses before the date of filing ITR, the entire amount will be allowed as deduction in the profit and loss account of the assessee u/s 43B - AO is thus directed to delete the addition made to the total income of the assessee u/s 36(1)(va) of the Act and allow the said addition u/s 43B - This ground of appeal is allowed.

Summary

Issues:
1. Claim of additional depreciation under section 32(1)(iia) of the Income Tax Act.
2. Delay in deposit of employees ESIC and labour welfare fund contribution.

Analysis:
Issue 1: Claim of additional depreciation under section 32(1)(iia) of the Income Tax Act
In this appeal, the Revenue challenged the deletion of additional depreciation amounting to &8377; 3,18,05,283 under section 32(1)(iia) of the Act. The Tribunal noted that similar issues had been decided in favor of the assessee in previous assessment years by coordinate benches. Referring to the decisions in ITA No 6360/mum/2017 and ITA No 7268/mum/2017, the Tribunal upheld the findings of the Ld. CIT(A) and dismissed the Revenue's appeal regarding the additional depreciation claim.

Issue 2: Delay in deposit of employees ESIC and labour welfare fund contribution
The second issue pertained to the delay in depositing employees' ESIC and labor welfare fund contributions. The Ld. CIT(A) examined the matter in detail, considering various case laws and judicial pronouncements. The Ld. CIT(A) referred to the decision in CIT vs. Ghatge Patil Transports Ltd. where it was held that contributions, whether by employees or employers, should be allowed if deposited before the due date of filing the return of income. The Tribunal agreed with the Ld. CIT(A) that there should be no distinction between employees' and employers' contributions for the purpose of deduction under section 43B of the Act. The Tribunal observed that the contributions were made before filing the return of income, and hence, no disallowance under section 36(1)(va) was warranted. Consequently, the Tribunal directed the AO to delete the addition of &8377; 18,116 made to the total income of the assessee under section 36(1)(va) and allow the said addition under section 43B of the Act.

In conclusion, the Tribunal dismissed the Revenue's appeal, considering the minimal amount involved and the slight delays in depositing the contributions. The Tribunal found the Ld. CIT(A)'s conclusions consistent with previous decisions and upheld the deletion of the addition in favor of the assessee.