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2016 (2) TMI 828 - AT - Income TaxDisallowance on account of the alleged late payment of PF and ESIC dues - Held that:- The perusal of the details of employees PF reflect that for the month of January, 2008, sum of ₹ 2,18,226/- was due to be paid by 20.02.2008, but the same was deposited on 27.02.2008. Further, the said contribution to Employees’ PF for March, 2008 amounting to ₹ 1,96,794/- was due to be deposited by 20.04.2008, but was deposited by 29.04.2008, hence, the delay in making the aforesaid contribution is period of 7 and 9 days, respectively. In respect of Employees’ ESIC contribution for the month of December, 2007, sum of ₹ 1,452/- had to be contributed and the due date was 15.01.2008 and was paid on 06.08.2008. Admittedly, all these amounts have been paid before the due date of filing the return of income. In this regard, we place reliance on the ratio laid in CIT Vs. M/s. Alom Extrusions Limited reported in (2009 (11) TMI 27 - SUPREME COURT ) and following the said ratio, we hold that the assessee is entitled to the claim of deduction of ₹ 4,15,020/- i.e. the contribution to the Employees’ PF and ESCI, which has been deposited before the due date of filing the return of income - Decided in favour of assessee Disallowance of Bad debts u/s 2(24) (x) read with Section 36(va) - Held that:- The Hon’ble Supreme Court in TRF Ltd. Vs. CIT (2010 (2) TMI 211 - SUPREME COURT ) has laid down the proposition that where the assessee is of the view that the debt had become irrecoverable, it was enough if the bad debt is written off as irrecoverable in the accounts of the assessee. Undoubtedly, it is the bad debt written off, which are allowed as deduction under section 36(1)(vii) of the Act. The Assessing Officer had disallowed the claim of the assessee on the ground that the onus was upon the assessee to prove that the debts can no longer be collected and need to be written off. The CIT(A) was also of the view that only the debts which had become bad had to be written off. We find no merit in the observations of the authorities below in this regard. The year under appeal before us is assessment year 2008-09, the assessee has written off the sundry balances which were outstanding since financial year 2000-01, totaling ₹ 12,30,042/- and further outstanding since 2001-02 and 2002-03 amounting to ₹ 2,49,578/- and ₹ 1,15,923/- respectively. The claim of the assessee before the authorities below was that amounts could not be recovered from the respective parties, despite several efforts. Where the assessee has not been able to recover the amounts for such long period, the said debt has become bad in the hands of assessee and the same was written off in the books of account. Such writing off of bad debt is duly allowable as deduction in the hands of the assessee. Accordingly, we direct the Assessing Officer to delete the addition - Decided in favour of assessee Disallowance of travelling and conveyance expenses - Held that:- The assessee before us is a limited company and had booked expenditure of ₹ 11,24,461/- on account of vehicle expenses, in addition to the expenditure booked on account of travelling and conveyance expenditure. The Assessing Officer had disallowed 20% out of total expenditure under travelling, conveyance and vehicle totaling ₹ 20,38,691/- resulting in an addition of ₹ 4,07,738/-. However, the CIT(A) allowed the claim of the assessee in respect of travelling and conveyance expenses, but restricted the disallowance to 10% on vehicle expenses on the premise that it could not be concluded that the entire expenses had been incurred wholly and exclusively for the purpose of business. We find no merit in the aforesaid finding of CIT(A), where the assessee was a limited company and no disallowance could be made for nonbusiness purpose in the hands of limited company. Even otherwise, the assessee had paid the fringe benefit tax on the aforesaid expenditure booked as vehicle expenses and out of such business expenses on which FBT tax had been paid, no disallowance for personal use can be warranted. Accordingly, we allow the claim of the assessee. - Decided in favour of assessee
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