Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1918 - AT - Income TaxDisallowance of ESIC u/s 36(1)(va) r.w.s. 2(24)(x) - late payment of employee’s contribution towards ESIC - HELD THAT:- It is undisputed fact that the assessee has made late payment of employee’s contribution towards ESIC on 26th July, 2012. whereas the due date of payment of ESIC as per the relevant act for the purpose of ESIC is 21st April, 2012. The contention of the assessee that the ESI contribution was in the nature of labour expenses for the company since it was contributed by the assessee without any recovery from the labourers has no merit as the assessee has deposited the ESI out of the labour expenses which were payable to the employees. Therefore it is established from these facts that labour expenses which were to be paid to the labours have been deposited as contribution on the behalf of labours in the ESI. In view of the above facts and the detailed findings of the Ld.CIT(A) it is clear that the provisions of section 2(24) (x) r.w.s. 36(1)(va) are attracted to the case of the assessee. See GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (1) TMI 502 - GUJARAT HIGH COURT] - Decided against assessee. Disallowance u/s. 36(1)(iii) - AO not accepted the explanation of the assessee stating that the assessee has not given any specific reason and supporting evidences to substantiate that why the interest was not capitalized towards CWIP and no borrowed funds was utilized towards purchase of various items forming part of the CWIP as on 31st March, 2012 and computed interest @ 12% on the various items forming part of the CWIP and capitalized it u/s. 36(1)(iii) - HELD THAT:- As from the proviso to section 36(1)(iii) that any interest paid in respect of capital borrowed for acquisition of an asset, even for the extension of the existing business has to be capitalized till the date on which such asset was first put to use and the same cannot be allowed as deduction. However, for want of information and supporting evidences, the assessing officer capitalized the interest @12% on the various items forming part of CWIP. After considering the above facts and judicial findings, we consider it will be appropriate to restore this issue to the file of the assessing officer for deciding afresh after taking into consideration the exact date of additions to various items forming part of CWIP and after excluding the period when the capital asset actually put to use in the lights of the directions laid down in the above judicial pronouncements. Therefore, as directed, we restore this issue to the file of the assessing officer for deciding afresh after affording adequate opportunities to the assessee. Appeal of the assessee is partly allowed.
|