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TMI Blog2016 (1) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 for the assessment year 2000-01, claiming following substantial questions of law:- "I. Whether, on the facts and in the circumstances of the case, the learned ITAT was right in law in confirming the order of the learned CIT(A) in deleting the addition of Rs. 19,36,019/- made by the Assessing Officer on account of late deposit of employees' contribution to PF disregarding the fact that the payments were made beyond the due dates and were therefore not allowable under section 36(1)(va) and were to be treated as income under section 2(24)(x) of the Income Tax Act, 1961, in contravention of the decision in the case of CIT vs. Pamwi Tissues Limited, 215 CTR 150 (Bom.)? II) Whether, on the facts and in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections 147/143(3) of the Act on 29.9.2006, Annexure A.I at an income of Rs. 1,16,15,649/-. The Assessing Officer made addition of Rs. 14,23,431/- on account of depreciation in respect of whole of the building as let out and addition of Rs. 19,36,019/- on account of late payment of employees' contribution to Provident Fund and Rs. 19,30,846/- on account of employer's contribution to EPF and FPF. The assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 13.9.2007, Annexure A.II, the appeal was partly allowed giving relief of Rs. 51,55,171/- to the assessee. The revenue went in appeal before the Tribunal. Vide order dated 19.6.2009, Annexure A.III, the Tribunal dismissed the appeal. Hence the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees' contribution to provident fund etc. within time whereas they laid claim for deductions in respect thereof from their income on the plea that liability to pay these amounts had occurred during the relevant previous year. After the insertion of Section 43B, the assessee was entitled to claim deduction on account of these payments only on actual payments even where the assessee had been following mercantile system of accountancy. The provision at that time comprised of only clauses (a) and (b) and Explanation which was later renumbered as Explanation 1. The two provisos before the Explanation to the Section were incorporated by Finance Act, 1987 effective from Ist April, 1988. The Finance Act, 1988 amended clause (a) with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first proviso came to be inserted). For the above reasons, we find no merit in this batch of civil appeals filed by the Department which are hereby dismissed with no order as to costs." In view of the above, the Tribunal was right in allowing the claim of the assessee in respect of payments made for ESI contributions and the same could not be disallowed under Section 43B of the Act. The question of law is, thus, answered against the Revenue and in favour of the assessee." In view of the above, the Tribunal was right in allowing the claim of the assessee. 6. As regards question No.III, the Assessing Officer disallowed Rs. 14,23,431/- on account of depreciation by taking the whole of the building as let out and income was assessed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered under the head income from house property, and therefore, the action of the AO in disallowing the depreciation on the rent building in these two orders is upheld. However, keeping in view the plea of the appellant that the total area in dispute for the purpose of Plot No.131 and 35 comes to 1,27,993 square feet i.e. 1/10th of the actual property involved, the depreciation should be disallowed only to the extent of 1/10th and not the entire depreciation, as the rest of the building is almost clearly the factory premises of the said rented building. Therefore, 1/10th of Rs. 12,09,031/- comes to Rs. 1,20,903/- and of Rs. 14,23,431/- comes to Rs. 1,42,343/- and these are disallowed accordingly and the balance disallowances are deleted i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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