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TMI Blog2012 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ised on 31.03.2009. 3. The grounds of appeal read as under :- "1. That on the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in law while confirming the following 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e oral statement that the services were rendered by this four relatives of the Directors, no other material is placed before us which reveal that any services were rendered by these persons 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 :- " Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities are not to wear blinkers to overlook or condone the passing off of public revenue to one's own kith and kin by subterfuge or clandestine or clever devices clothed in legalistic 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed." 8. We have heard both the sides on the issue and in the pleadings, the ld. AR has failed to show any provision in the Rules related to the depreciation wherein 100% depreciation 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund 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 retu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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