9911796707
TMI Blog2012 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the Income Tax Act/Rules and since assessee has failed to show any provision in the Rules related to 100% depreciation is justified on the mobile phones they can be allowed depreciation only at the rates applicable to plant and machinery - against assessee. Disallowance on account of provident fund being employees’ contribution paid before the due date of filing the return of income - Held that:- As decided in CIT vs. AIMIL Limited [2009 (12) TMI 38 (HC)]that as soon as employees' contribution towards PF or ESI is received by the assessee by way of deduction or otherwise from the salary/wages of the employees, it will be treated as 'income' at the hands of the assessee and on making deposit with the concerned authorities, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowances of expenses incurred wholly and exclusively for the business of the assessee company: 1. Out of Salary amounting Rs.1800000/- 2. Out of Depreciation on Mobile Phones amounting Rs.520393/- II. That on the facts and circumstances of the case the learned Commissioner of Income Tax(Appeals) has erred in law while making the unjustified addition to the returned income on account of Provident Fund being Employees Contribution amounting Rs.663966/- disregarding the Hon'ble Delhi High Court's ruling in the case of CIT vs P.M. Electronics Ltd. It is pertinent to submit that no expense has been claimed on this account while arriving at the returned income. III. The Appellant craves for grant of permission to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons to the assessee. Mrs. Ashu Kapil is paid the salary as paid similar to the director. No further material is available before us which corroborates the contention of the assessee made before AO. Similarly no material is placed in respect of services rendered by any other relatives of the directors to whom payments by way of salary is made. The expenses claimed u/s 37 are allowable provided the expenses are wholly and exclusively for the purpose of business. Hon ble Delhi High Court in the case of Siddho Mal Sons v. ITO 122 ITR 839 held as under :- The word wholly in s. 10(2)(xv) refers to the quantum of expenditure but the word exclusively refers to the motive, objective and purpose of the expenditure. An expenditure is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c jargon. Instead it is their duty to lift the veil of apparent legality and get to the truth or substance of a transaction to deal with it in accordance with law. It is only appropriate, indeed normal, that dealings involving transfer of funds to near and dear ones need to be looked into with care and caution and necessary inferences drawn if there are abnormalities attaching to such transactions. 7.1. It is also settled law that it is for the assessee to prove that the expenses are wholly and exclusively for the purpose of business. In the present case we find that except the oral submissions that the services were rendered by relatives of directors no other material is produced before us which suggest so. We, therefore, confirm the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation is justified on the mobile phones. It was also stated during the pleadings that none of the mobiles was costing less than Rs.5,000/-. Considering the totality of the facts and circumstances, we find that the CIT (A) was justified in confirming the action of the Assessing Officer for restricting the rate of depreciation @ 15%. Therefore, this ground of assessee s appeal also stands dismissed. 9. In the ground no.2, the issue involved is sustaining the disallowance on account of provident fund being employees contribution amounting to Rs.6,63,966/- paid before the due date of filing the return of income. 10. After hearing both the sides, we hold that this issue is covered in favour of the assessee by the decision of Hon'ble j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act as well as the ESI Act. Therefore, the Acts permit the employer to make the deposit with some delays, subject to the aforesaid sequences. Insofar as the IT Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed. CIT vs.Vinay Cement Ltd., (2007) 213 CTR (SC) 268, CIT vs. Dharmendra Sharma (2007) 213 CTR (Del) 609 : (2008) 297 ITR 320 (Del) and CIT vs. P.M. Electronics Ltd. (2008) 220 CTR (Del) 635 : (2008) 15 DTR (Del) 258 followed. Since the amount has been paid prior to the date of filing the return, keeping in view the aforesaid decision of Hon'ble jurisdictional High Court, we allow this ground of assessee s appeal. 11. Ground No.3 is general in nature and does not require ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
